Top climate risks for companies by industry and region

Climate change doesn’t affect all businesses equally. The way climate risks manifest depends heavily on where a company operates – and what it does. Physical risks like storms, floods, or heatwaves vary drastically by geography, while transition risks – such as regulatory pressure or changing market expectations – hit industries in sector-specific ways. Businesses that understand these specific exposures can prioritize resources more effectively and design resilience strategies that are both proactive and pragmatic.

This article outlines key regional climate risk profiles and highlights how climate change uniquely affects seven major industries. Together, these insights form the basis for data-driven risk management and long-term ESG strategy.
 

Regional Climate Risk Profiles
 

Coastal and Low-Lying Areas

Coastal and low-lying regions are particularly vulnerable to rising sea levels, increased flooding, and storm surges. These risks can lead to major economic disruptions, particularly in urban areas. Countries such as the Netherlands and parts of Northern Germany are already facing these challenges and have invested heavily in advanced flood protection systems.

Northern and Polar Regions

Warming temperatures in northern and polar regions are causing permafrost melt and ecosystem disruption. While these changes pose serious environmental risks, they also create economic opportunities such as new shipping routes and access to previously untapped natural resources. Scandinavia and regions of Russia illustrate the complexity of these emerging climate dynamics.

Arid and Semi-Arid Regions

Southern European countries such as Spain, Portugal, and parts of Italy are increasingly affected by drought, heatwaves, and water scarcity. These climate conditions place immense pressure on agriculture, water-intensive industries, and energy production. The rising frequency of extreme heat events challenges both productivity and public health.

Emerging Markets

Emerging markets are often exposed to multiple climate risks simultaneously. These challenges are intensified by limited adaptive capacity, less developed infrastructure, and weaker regulatory environments. At the same time, these regions present high-impact opportunities for climate-resilient infrastructure, green innovation, and sustainable growth investments.

Sector-Specific Climate Risk Profiles
 

Agriculture and Food Production

This sector is highly sensitive to changing weather conditions such as irregular rainfall, droughts, and rising temperatures. These factors can severely affect crop yields, soil health, and livestock welfare. In addition, agricultural businesses face growing transition risks related to stricter environmental regulations and increasing demand for low-impact food products.

Energy and Utilities

Energy infrastructure is directly threatened by extreme weather events, including storms and flooding. At the same time, the sector is undergoing a fundamental transformation driven by the global shift toward renewable energy and decarbonization. Companies must adapt their business models and investments to meet new regulatory and market demands.

Manufacturing

Manufacturers face climate risks through supply chain disruptions, physical damage to production facilities, and exposure to carbon pricing. New compliance requirements and customer expectations are forcing operational adjustments, especially around energy use and emissions management.

Financial Services

Financial institutions are less exposed to physical climate impacts, but they carry significant transition risks through their investment and lending portfolios. Regulatory bodies now require banks and insurers to analyze climate-related risks across their assets, including stress testing and disclosure requirements.

Transportation and Logistics

This industry is especially vulnerable to extreme weather events that disrupt transportation routes, delay deliveries, and damage infrastructure. Transition risks are also rising as new emissions standards and consumer preferences push for cleaner, more sustainable mobility solutions.

Insurance

The insurance industry faces growing claims related to climate-induced natural disasters, which affect profitability and require the overhaul of traditional risk models. Insurers are also under increasing pressure to disclose climate-related risks and align underwriting policies with global decarbonization goals.

Real Estate and Construction

Real estate assets are increasingly exposed to flooding, heat stress, and storms, all of which can reduce property values and raise maintenance and insurance costs. Developers and property managers must also respond to evolving building codes, ESG disclosure mandates, and rising market demand for sustainable, climate-resilient buildings.

Software-based solutions with Envoria

Envoria offers a SaaS platform that helps companies systematically assess, document, and manage climate risks across projects and portfolios. The software supports:

• Location-specific risk analysis for single projects or entire portfolios
• Integration of IPCC climate scenarios and external data sources
• Automated recommendations for adaptation measures
• Standard-compliant reporting aligned with CSRD, the EU Taxonomy, and TCFD
• Scalable assessments that can be reused and updated with ease

With Envoria's Climate Risk Assessment software, companies can carry out over 10,000 climate risk assessments – efficiently, reliably, and audit-ready.
 

Conclusion: Climate risks require a dual-lens strategy

Understanding climate risk through the lens of geography and industry is essential for meaningful action. Companies that adopt a localized and sector-specific approach are better equipped to anticipate threats, seize opportunities, and embed climate resilience into their long-term strategy. By integrating ESG data with operational and financial insights, businesses can move from reactive compliance to proactive transformation.