“Risk” is the Real Story: Framing Climate as a Business Imperative

Over the past year, the escalating frequency of climate disasters and extreme weather events has exposed businesses and communities to unprecedented risks. From billion-dollar hurricanes to devastating wildfires, climate-related disruptions are no longer distant threats, but immediate crises with profound financial consequences. Additionally, public and private climate action faces major political and ideological challenges as climate regulations are rolled back. Confusion around what ESG means and how it connects to the greater business value, coupled with politicized ‘anti-woke’ rhetoric, has led to heightened scrutiny of corporate sustainability initiatives, making it harder for businesses to justify climate investments.  

This uncertainty comes at a time when decisive climate action is more critical than ever. As the future of climate regulation remains unclear and public discourse becomes increasingly polarized, communicators play a pivotal role in reframing sustainability as a business imperative. By shifting the conversation from compliance to risk management and financial resilience, they can help executives and stakeholders see climate action as a strategic necessity. Insurers, experts in assessing and mitigating risk, offer a clear model for how businesses should approach climate threats: not as optional commitments but as essential safeguards for long-term stability and profitability. 

Addressing Risk Is a Business Imperative  

Climate risks matter to all stakeholders, investors, customers, and regulators, as they can directly impact everything from customer service to financial performance and long-term business viability. Clear, data-driven communication is essential to help stakeholders understand climate risks, align on management strategies, and support climate-smart business decisions. Communications professionals will be challenged to explain these dynamics, translating complex climate concepts into compelling narratives that can help maintain investor confidence and public trust.  

Climate change presents a vast array of risks that threaten companies’ operations, assets, and financial stability. The physical risks are all around us demonstrated by near-term disasters like hurricanes disrupt supply chains and damage infrastructure, as well as longer-term threats like rising sea levels can cause environmental damage. Operational risks typically refer to the second and third order effects of these same interruptions that make it difficult for businesses to maintain daily functions. These risks include supply chain interruptions, increased costs for raw materials due to resource scarcity, facility shutdowns from flooding or wildfires, workforce displacement, and infrastructure damage.   

Both the physical and operational risks described translate to increased costs, asset devaluation, and higher credit exposure, ultimately affecting a business’ financial stability and profitability. Communications professionals will need to frame these issues in financial terms that resonate with business leaders and stakeholders. This could mean proactively creating tailored messaging for investors and financial analysts emphasizing risk mitigation strategies to maintain long-term value or collaborating with internal teams to communicate the organization’s climate risk response framework and how the company is preparing for disruptions.  

Think Like an Insurer 

The role of climate advocates moving forward will be two-fold, advocating for responsible sustainability initiatives to the public while also giving expert counsel to executive leaders looking to cut through the noise and execute on their sustainability efforts. Adopting an insurer’s mindset, focusing on risk assessment, financial implications, and proactive mitigation, will strengthen climate messaging and help secure leadership buy-in. 

Mutual insurance company American Family Insurance Group is a leader in climate-related insurance investing in community resilience initiatives against the physical risks posed to properties that they cover. The company’s approach to communicating climate risk to shareholders emphasizes the proactive risk management and mitigation projects that they take on, with audience-centered storytelling, turning complex risks into digestible points for policyholders. They use brochures and other marketing assets to demonstrate how complex climate risk data impacts the underwriting process and leverages research from partner institutions to model the impacts extreme weather on their properties.  

This approach can be applied to any company. For example, a real estate developer could use similar strategies to communicate climate resilience efforts to investors, demonstrating how environmental risks influence site selection, construction methods, and long-term asset value. Companies in the retail or food space might use similar storytelling to explain how climate disruptions impact logistics within a supply chain and how they are responding to those risks through adaptive strategies. 

Leveraging External Insights for Smarter Climate Action 

Industries from financial services to retail must move beyond carbon metrics and ESG terminology, defining climate risks in terms of financial exposure, asset devaluation, and liability costs. Communicators across all departments and business functions will need to collaborate with business leaders to identify the most relevant risk metrics and strategically translate them into accessible, data-driven narratives. 

Much like insurers use communications to educate policyholders on key issues, corporate communicators must work alongside leadership teams to frame sustainability efforts as critical investments in operational resilience, asset protection, and competitive advantage. By leveraging trusted data sources, such as The Insurance Information Institute (III) and other expert organizations, companies can integrate authoritative insights into their messaging. From owned content and web pages to visual assets like infographics, businesses can use data strategically to help stakeholders make informed decisions, strengthening both credibility and impact. 

The Path Forward 

With the rollback of key regulations and many companies deprioritizing their sustainability programs, communicators face unique challenges in advocating for climate action. Despite the threat that ESG backlash poses to corporate climate action, many organizations have already achieved strong momentum in integrating sustainability into their operations, positioning it as a key business priority. This is demonstrated through a growing trend of sustainability roles becoming absorbed by leadership across departments.  

To drive success in the evolving ESG landscape, leaders must go beyond compliance and position sustainability as a strategic business opportunity that enhances strengthens stakeholder trust and creates a competitive edge. Communicators will be key partners in positioning climate action as a bottom-line issue, ensuring stakeholders understand how climate investments drive long-term resilience. This requires clearly articulating the risks climate change poses to their operations and financial health as they embed climate accountability across the organization.  By proactively assessing climate risks and adopting an insurer’s mindset, companies can better navigate uncertainty, sustain growth, and meet customer needs.  

By Marques Wilson

Photo by Yavuz Solgun via Pexels