Global Trends in Climate Risk Management: A 2025 Reality Check

The landscape of climate risk management is undergoing its most significant transformation yet. As companies face intensifying physical impacts and mounting regulatory pressure, the traditional approach of treating climate as a mere reporting exercise is no longer sufficient.

Recent analysis from WRI reveals a troubling disconnect: while companies acknowledge climate risks, they struggle to translate this awareness into meaningful action. The challenge isn't just about understanding climate risks - it's about integrating them into core business strategy and financial planning.

This gap between awareness and action is particularly evident in how organizations approach climate scenario analysis. The latest TCFD status report shows that while companies might assess potential climate futures, they often fail to connect these scenarios to concrete financial implications or strategic decisions. This disconnection becomes more concerning as we see the real-world impacts of climate change accelerating

New regulations, particularly ESRS in Europe, are pushing companies to bridge this gap. Organizations must now demonstrate not just that they understand their climate risks, but that they have concrete plans to manage them. This means developing comprehensive approaches to both physical and transition risks, understanding potential financial impacts, and creating actionable strategies for building resilience.

The next three years represent a critical window. Companies that use this time to develop robust climate risk management capabilities will be better positioned not just for compliance, but for long-term business resilience. Those that continue to treat climate risk as a reporting exercise risk falling behind as both regulations and physical impacts intensify.

Looking ahead, successful companies will be those that move beyond viewing climate risk through a narrow compliance lens. They'll be the ones that integrate climate considerations into their core strategy, understanding that effective climate risk management isn't just about managing threats - it's about positioning for success in a changing world.

Contact OCO Risk to learn how we can help you navigate this complex landscape and turn climate risk management into a strategic advantage.

How OCO Risk can help

By understanding and actively managing climate risks, companies can not only meet regulatory requirements but also build more resilient business models ready for a changing climate. Our team of climate risk experts can help you navigate the complexities of climate resilience.

Whether you're just starting your climate journey or looking to enhance your existing approach, reach out at [email protected] to learn how we can support your organization's climate resilience strategy.

Pragmatic data collection

We focus on what matters most - helping you identify and collect the essential data points needed for ESRS compliance without overwhelming your teams.

Scenario analysis made simple

We provide pre-analysed scenarios tailored to your industry, making it easier to assess both physical and transition risks.

Our approach includes:

• Physical risk analysis leveraging best-in-class third party data to fully capture assets exposure to climate change
• Stakeholder engagement workshops to validate scenario analysis outputs and outcomes
• CSRD-ready results to streamline reporting efforts and pre-established ERM integration processes

Financial impact assessment

We help you translate climate risks into financial terms, focusing on the specific metrics required by ESRS E1-9.

Including:

• Assets at physical and transition risk.
• Revenue exposure to climate risks.
• Potential liabilities from transition risks.

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