Tech on the Frontlines: Safeguarding Businesses Amid Growing Climate Risks

As climate shocks grow increasingly severe, many business leaders find themselves unprepared for the escalating threats to their day-to-day operations. To navigate these risks, it’s not enough to have a reactive strategy; business leaders need forward-thinking solutions that anticipate and mitigate the intensifying challenges ahead.

Proactively investing in climate risk planning and response is a prudent business decision,  According to the National Institute of Building Sciences, for every dollar spent on climate risk prevention, businesses recoup $4 to $11 in savings . With such a strong return on investment, the question for business leaders becomes: “Where should we focus our investments on climate risk prevention, and how can technology help us?” 

Technology and the rise of AI continue to transform industries globally, and leveraging both to address climate change and better prepare and respond to climate hazards. From predictive analytics, blockchain, and AI to smart infrastructure, a myriad of technological solutions enable businesses to proactively adapt, enhance resilience, and mitigate future risks in a rapidly changing world. 

Presented in two parts, this article outlines how advanced technologies are reshaping both climate risk planning and response, providing businesses with strategies to navigate and mitigate future threats. 

Planning  

Identifying climate risk : Predictive analytics leverages historical data, machine learning, and statistical algorithms to help businesses anticipate and prepare for future climate-related risks. By analyzing vast environmental datasets, predictive models can identify high-risk areas for events like hurricanes, enabling more efficient resource allocation and preventive measures. 

First Street, a Telesto Strategy partner, utilizes probabilistic modeling to quantify the likelihood of a significant climate hazard — such as floods, wildfires, and hurricanes— occurring at any address across the U.S. Using First Street’s model to examine past events, like recent Hurricane Debby, is incredibly valuable for predicting future risks. First Street’s recreation of the storm not only accurately predicted flood areas but also highlighted critical oversights in traditional assessments: 78% of affected properties were outside FEMA Flood Zones. With $9.7 billion of the total $12.3 billion in damages occurring in these unexpected areas, this model proves essential for refining flood risk evaluations and preparing for future hazards. 

Integrating into risk management frameworks: After identifying exposure to climate hazards and value at risk, businesses can employ tech solutions to develop a high-level business case and roadmap to mitigate risks. Moving beyond safety and compliance, climate risk awareness informs and drives key investment and management decisions.  

Faros, Telesto Strategy’s physical climate risk management solution, helps businesses design and implement an approach to integrate physical climate risk data into property-level roadmaps and enterprise risk management frameworks . This includes estimating adaptation cost for properties at risk, calculating ROI of each project, assessing feasibility of plans, and developing appropriate timelines and goals. By providing tailored, data-driven insights, Faros empowers businesses to make informed decisions that safeguard their assets and ensure long-term resilience in an unpredictable climate landscape. 

Responding  

Adapting in real-time: Advanced technologies such as AI, IoT, and blockchain are empowering businesses to respond in real-time to climate hazards. Early warning systems predict and alert companies about threats such as floods, hurricanes, and wildfires, allowing for timely evacuation of personnel, asset protection, and activation of emergency protocols. Recent studies have even emphasized the potential to improve early warning systems for landslides through IoT-based models. By detecting shifts in soil stability and sending real-time alerts, these systems could prevent significant damage and reduce the risk to both property and human life. 

Blockchain technology enhances supply chain sustainability and resilience by offering real-time, transparent tracking of materials and processes across all partners, ensuring traceability and reducing risks  throughout a supply chain. This visibility helps businesses quickly adapt to climate-driven disruptions, such as finding alternative suppliers or routes, maintaining operational continuity. By fostering collaboration and efficient resource management, blockchain enables companies to respond more effectively to environmental challenges, ensuring both sustainability and supply chain security. 

Hardening assets: Smart building technologies and resilient infrastructure designs help businesses withstand extreme weather conditions. Storm hardening involves strengthening or retrofitting infrastructure with design features to withstand extreme weather events like high winds, flooding, and debris. Businesses can then minimize damage and ensure that buildings or facilities continue operating with minimal downtime during and after storms.  

In July 2024, Hurricane Beryl caused more than $2.5 billion in wind damage alone. Businesses located in hurricane-prone areas may choose to invest in windows with impact-resistant glass, independent emergency power systems, potable water storage, flood barriers, and other supplies or systems that will improve climate resilience.  

As climate-related disasters grow in frequency and severity, businesses must take proactive steps to safeguard their operations and future-proof their assets. Leveraging advanced technologies such as predictive analytics, IoT-enabled systems, blockchain, and smart infrastructure is no longer optional—it’s essential for resilience in an increasingly unpredictable world. 

Now is the time for business leaders to act. Start by assessing your climate risks and identifying the areas where technology can have the most immediate impact. Consider consulting with experts in climate risk assessment, like First Street and Telesto Strategy, to integrate these technologies into your long-term strategy. By investing in these tools today, you’ll not only protect your assets and operations but also gain a competitive advantage in an era where resilience is key to success. 

Key takeaways: 

• Businesses must invest in forward-thinking climate risk strategies to mitigate future challenges. Proactive planning, informed by predictive analytics and data-driven insights, offers a strong return on investment, saving $4 to $11 for every dollar spent. 

• Leveraging technologies such as AI, IoT, blockchain, and smart infrastructure is essential for businesses to adapt in real-time, strengthen their assets, and maintain operational continuity in the face of escalating climate threats. 

• By assessing climate risks and integrating advanced technologies into long-term strategies, businesses not only protect their operations and assets but also position themselves for success in an increasingly volatile environment. 

Other Telesto resources:  

Further reading on climate risk includes how businesses can prepare and opportunities for businesses. Find additional information on how to get started with ESG, build topical familiarity with our ESG Glossary as well as Telesto’s ESG Maturity Model.