Climate Resilience: The Hidden Advantage for Small Firms and Global Supply Chains

This post originally Appeared on European Business Insights: https://www.europeanbusinessreview.com/climate-resilience-the-hidden-advantage-for-small-firms-and-global-supply-chains/

Climate change is disrupting businesses everywhere—wiping out supply chains, shuttering SMEs, and threatening global markets. Yet resilience is the hidden advantage. Companies that act now—strengthening operations, suppliers, and communities—won’t just survive the next disaster; they’ll capture market share, secure capital, and lead in the climate-defined economy.

Climate Change: The Defining Business Trend

When executives talk about the “future of business,” they often highlight digital transformation, artificial intelligence, or breakthrough technologies. These are indeed transformative. Yet beneath them lies a force that shapes markets, technologies, and societies alike: climate change.

A 2024 report by The European Investment Bank found that 66% of surveyed global companies experienced climate-related disruptions to their operations, but only 22% had a climate resilience strategy. In Europe alone, extreme events such as heatwaves, floods and storms cost the continent approximately €145 billion in economic losses over the decade to 2022.

Climate disruption is not just another risk on a long list. It is the defining business trend of our era—a force multiplier that intensifies other risks and touches every geography and sector. Floods and droughts threaten logistics networks; wildfires and heatwaves disrupt workforce health; storms cut supply chains and halt production. From corner bakeries to multinational corporations, no enterprise is insulated.

From Survival to Competitive Advantage

Small enterprises employ over two thirds of Europe’s workforce and account for a over half of GDP. Yet they are among the most vulnerable. Research from the United States showed that 40% of small businesses never reopen after a disaster. These figures may be American, but the reality is global: SMEs everywhere sit on the frontlines of climate disruption.

But resilience is not only about survival. Businesses that prepare—by elevating critical equipment, training staff, digitizing insurance records, diversifying suppliers, or rehearsing continuity plans—are the ones that reopen first. In doing so, they capture market share while competitors falter. They also strengthen their case with insurers, lenders, and customers. What begins as a defensive act becomes a competitive advantage.

The Corporate Supply Chain Challenge

For large companies, climate disruption poses a different but potentially existential threat. It is not only their own facilities at risk, but also the far-flung networks of suppliers that provide critical goods and services.

The World Economic Forum’s Global Risks Report 2025 identifies extreme weather as the world’s second most urgent risk today, and the number one risk of the decade ahead. Supply chain chokepoints—from droughts in Chile’s copper mines to low water levels on the Rhine River—show how disruptions in one region can cascade through global production systems. When Hurricane Helene damaged quartz facilities in North Carolina in 2024, semiconductor manufacturing was threatened worldwide.

The lesson is clear: resilience cannot be confined to headquarters. Large companies must help strengthen the small suppliers who anchor their value chains. If these SMEs collapse under climate stress, the corporates they serve will face stranded assets, lost revenue, and reputational damage.

Building Resilience in Parallel

Resilience must therefore be pursued on two tracks—small businesses protecting themselves, and large corporations investing in their supply chains.

For small businesses, the most effective strategies begin with identifying local climate risks and prioritizing those most likely to cause severe disruption. Action must follow quickly, whether that means retrofitting properties against floods, securing safe working conditions during heatwaves, or setting up alternative suppliers for critical inventory. Organizing information is another underappreciated discipline: having insurance documents, vendor contracts, and emergency contacts in cloud-based systems allows for quicker recovery when disaster strikes. And businesses that rehearse their response plans—through drills or tabletop exercises—recover more confidently and maintain customer trust.

For large companies, resilience begins with visibility. Few firms have clear insight into their Tier 2 or Tier 3 suppliers, yet these are often where vulnerabilities lie. Mapping supplier locations against climate hazard data uncovers weak links that might otherwise remain hidden until disaster arrives. From there, resilience requires partnership. The most effective corporates do not impose one-size-fits-all requirements; instead, they co-design solutions with suppliers, listening first to their needs.

Some companies are already demonstrating what this looks like in practice. Nespresso has worked with TechnoServe to provide drought resilience support to coffee farmers in Ethiopia and Kenya, distributing over a million shade trees to improve yields in hotter conditions. PepsiCo has financed simple irrigation systems for smallholder farmers, reducing drought risk while securing its own supply of ingredients. AB InBev has partnered with The Nature Conservancy and WWF to restore upstream watersheds, protecting barley supplies while improving water security for local communities. And H&M has aligned its payment terms with resilience goals, giving suppliers the financial breathing room to adapt to seasonal climate risks.

These examples illustrate a new paradigm: resilience as shared value. By financing adaptation, providing technical capacity, or reforming sourcing terms, corporates ensure continuity in their own operations while strengthening the communities and suppliers they depend on.

The Business Case for Resilience

For skeptics, the question remains: why invest in resilience now? The answer lies in both economics and expectations.

On the economics side, studies consistently show resilience pays off. The UN Office for Disaster risk reduction estimates that every dollar spent on resilient construction saves four dollars in recovery costs. Insurers and investors increasingly reward firms that can demonstrate adaptation measures. And companies that bounce back quickly from shocks protect revenue, capture market share, and reassure stakeholders.

On the expectations side, resilience has become part of a company’s social license to operate. Communities and customers expect firms to safeguard workers and neighbors. Investors are pressing for ISSB-aligned disclosures of supply chain risks. Regulators are increasingly attentive to stranded assets.

Climate resilience is no longer a “nice to have.” It is a boardroom imperative central to competitiveness and long-term growth.

From SMEs to Multinationals: Interdependence in Resilience

The reality is clear: SMEs cannot build resilience in isolation, and large companies cannot thrive without resilient suppliers.

A family-owned shop may elevate its utilities to stay dry during floods, but it relies on fair insurance terms, timely financing, and accessible resources. A global food and beverage company may secure water efficiency in its plants, but unless its smallholder farmers adapt to drought, production is at risk.

Resilience is therefore not an individual asset but a collective dividend—shared across value chains, industries, and economies.

First-mover Advantage Through Resilience

The 2020s are already the most expensive decade on record for climate disasters. With warming locked in, disruption will intensify. The businesses that succeed will be those that see resilience not as compliance or philanthropy, but as strategy.

For small businesses, resilience means clear-eyed risk assessment, practical action, disciplined information management, and readiness to recover. For large companies, it means mapping supply chains, listening to suppliers, sharing capital, and embedding resilience into sourcing and disclosure practices.

From the smallest storefront to the largest multinational, climate resilience is the hidden advantage that will separate the companies that merely endure from those that thrive in the climate-defined future.

About the Author

Joyce Coffee is president of Climate Resilience Consulting and a leading global expert on climate adaptation strategy, advising companies, nonprofits and governments worldwide on building resilience in markets and communities. She is also co-author of The Resilience Advantage: A Small Business Guide to Preparing for Floods, Heatwaves, Wildfires, and Other Climate Disasters.