Facing the storm: Developing corporate adaptation and resilience action plans amid climate uncertainty

Abstract

Abstract Climate hazards disrupt global value chains and business operations, leading to €52 billion in losses for the European Union in 2022 alone. In response to this escalating crisis, there is a need for corporate climate adaptation and resilience strategies (henceforth: CCAR) to effectively integrate climate risk challenges into strategic planning. Despite this urgency, there is a shortfall of research synthesising the drivers, strategies, and outcomes of corporate adaptation and resilience. Our study addresses this gap by conducting a systematic literature review to elucidate the academic status quo. From an initial dataset of over 3000 publications, we narrowed the sample to 66 papers, which specifically focus on these topics in the private sector. Grounded in this comprehensive review and regulatory observations, we delineate a CCAR typology to define the key elements required for a corporate approach to physical climate risks. This typology is translated into an actionable business adaptation framework, offering a clear path to begin the adaptation journey. Our in-depth content analysis contributes to the existing literature by identifying two main themes and several gaps: Current research covers the drivers, detailing why companies embark on such initiatives. Another stream focuses on how companies adapt, examining strategies to overcome these climate risks. However, work on the effectiveness and outcomes thereof is scarce. Consequently, our study delineates six trajectories for future research, the outcomes of which can serve as catalysts for advancing future CCAR efforts.