Embedding climate resilience into business strategy now a non-negotiable strategy

Johannesburg - South Africa’s manufacturing, mining and agricultural sectors risk losing global competitiveness unless they take decisive action to respond to economic and operational risks of climate change, warns Sashen Singh, Senior Manager: Sustainability, at Nedbank Commercial Banking. He says the stakes for South Africa and indeed the world are significant, and climate resilience is no longer a choice but a prerequisite for survival and competitiveness. He says severe weather events, floods and droughts which last year are estimated to have caused global losses of as much as $310 billion.

“The stakes for South Africa and the world are significant. Without decisive action, industries such as mining, manufacturing, and agriculture risk losing global competitiveness, with consequences beyond immediate profit margins. Industries such as wine and fruit exports, collectively generating billions for South Africa’s economy, must adapt or risk losing relevance in sustainability-driven markets. Businesses that lead with responsible practices in emissions reduction, waste management, and resource optimisation will emerge as industry leaders. Conversely, those that adapt stand to gain, strengthening their financial position and contributing to sustainable development,” Singh says.

Singh says the energy crisis in South Africa illustrates the cost of inaction. Record levels of load-shedding in 2023 resulted in economic losses of R1.2 trillion – a stark reminder of the need to transition toward renewable energy. These transitions offer more than energy stability; they align with global decarbonisation efforts and reduce long-term costs. Similarly, sustainable water management is critical for operations in sectors such as agriculture and manufacturing, which collectively underpin a significant portion of the country’s gross domestic product, he says.

In South Africa, where coal generates 80% of electricity, and less than 9% of water resources remain unallocated, businesses face mounting pressure to respond decisively to climate challenges. Resilience is no longer a choice but a prerequisite for survival and competitiveness.

Singh says identifying vulnerabilities is the foundation of climate resilience. Comprehensive risk assessments uncover weaknesses that threaten operations, from water insecurity in agriculture to risks from new regulatory regimes such as the EU’s Carbon Border Adjustment Mechanism (CBAM). CBAM’s tariffs on carbon-intensive goods present material risks to exporters reliant on fossil fuels. Businesses that fail to address these vulnerabilities risk disruption, declining competitiveness, and diminished contributions to economic stability.

“Balancing immediate operational demands with longer-term sustainability investments requires bold leadership and strategic clarity. Global studies highlight the substantial economic risks associated with inaction on climate change, with potential losses reaching trillions by mid-century. With its unique vulnerabilities, South Africa faces significant economic consequences without decisive adaptation strategies. Business leaders must embed resilience into their strategic frameworks, ensuring alignment across supply chains, operations, and governance. This integration demands a multi-faceted approach that marries immediate action with future-focused planning,” Singh says.

Singh says financing remains a critical enabler of climate resilience. South Africa’s R1.5 trillion funding gaps for its just energy transition underscores the scale of the challenge. Yet, innovative financial instruments such as green bonds offer viable solutions. With global issuance reaching a record $600 billion in 2024, green bonds are transforming sustainable finance. These instruments provide capital to fund projects with measurable environmental benefits, from renewable energy adoption to water conservation and ecosystem restoration.

For businesses, navigating the complexity of sustainable financing requires partnerships with financial institutions that offer expertise in sustainability-linked loans and advisory services. Accessing these instruments can enable the implementation of impactful climate strategies without destabilising financial health or operational continuity. However, the success of these tools depends on businesses embracing them strategically and with a clear vision for measurable outcomes.

“The opportunities presented by resilience extend beyond mitigation and risk management. Businesses that integrate sustainability into their core operations can innovate, capture new markets, and envision a sustainable future. This perspective requires a fundamental shift of seeing resilience not as an operational cost but as an investment in competitiveness, relevance, and leadership in an evolving global economy. The path forward demands urgency and coordination. As climate change transforms economies, businesses must move beyond anticipation to leadership. The real question is not if they can act, but if they are prepared to lead,” concludes Singh.