A comprehensive new study from the Capgemini Research Institute paints a troubling picture of corporate climate readiness, revealing that while executives increasingly recognize climate change as a material business threat, most organizations lack the fundamental capabilities to measure, manage, and adapt to its impacts.
The fifth edition of the annual A World in Balance report, titled "The Resilience Reset," surveyed 2,100 senior executives from 701 major organizations across 13 countries, alongside 6,500 consumers globally. The findings expose a widening chasm between sustainability rhetoric and execution at a time when climate disruption is already disrupting supply chains, driving up costs, and threatening operational continuity.
Climate Impacts Already Biting
The research confirms that climate change is no longer a future risk—it is a present-day operational crisis. Nearly nine in ten organizations (87%) report climate-related supply chain disruptions, while 84% have experienced raw material scarcity and 82% face increased operating costs due to climate impacts.
The report documents a litany of climate-driven business interruptions in 2025 and 2026 alone: severe winter storms in Chile disrupted copper mining operations; extreme cold forced petrochemical shutdowns across Texas and Louisiana; Super Typhoon Ragasa disrupted iPhone production in Shenzhen; and extreme heat caused operational disruptions at container terminals in Rotterdam. In Europe, water levels on the Rhine river—one of the continent's most important commercial waterways—fell to their lowest levels in nearly 150 years, threatening the transport of fuel, chemicals, and industrial goods.
"Extreme weather is making resilience a more urgent operational issue, from overheating risks in hospital estates to potential disruption of supply chains," said Kawun Williams, Head of Sustainability at University Hospitals of Birmingham NHS Foundation Trust, in the report. "The challenge is to move from reacting to climate impacts to treating adaptation as a strategic priority."
The Measurement Gap
Despite these tangible impacts, the research reveals a striking failure to quantify climate-related financial exposure. Only 15% of organizations have fully quantified the financial impact of climate-related disruptions on their business, while 35% have not quantified it at all. A further 40% have done so only partially.
The governance and analytical capabilities needed to operationalize adaptation remain largely absent. Just 38% of executives say their organization has established dedicated governance and accountability structures for adaptation. Only 27% have assessed climate risks across their extended value chain, including suppliers and logistics networks. And merely 28% have deployed climate risk analytics tools or platforms.
"Mitigation alone is no longer sufficient," said Vincent Charpiot, Executive Vice President and Head of Group Sustainability Accelerator at Capgemini. "As climate risks intensify, and challenges such as energy volatility, resource constraints, water scarcity, and supply chain disruptions become more pronounced, organizations must adapt to a new reality by embedding resilience into their operations, infrastructure, products, and value chains."
Water: The Emerging Strategic Risk
The report identifies water scarcity as an underappreciated but rapidly escalating business constraint. Sixty-one percent of executives believe water scarcity will become a greater constraint on business growth than energy availability over the next five years. Nine in ten executives (90%) now consider water scarcity and availability to be organizational risks, with 55% viewing water as either a strategic risk or board-level priority.
The financial stakes are enormous. The World Resources Institute estimates that by 2050, regions facing high water stress will generate around one-third of global GDP—approximately $70 trillion. Since 1970, water-related disasters have already caused more than $4 trillion in economic losses.
Yet corporate action on water remains inadequate. Fewer than half of executives report that their organization is proactively adapting operations in water-stressed regions (42%), strengthening water stewardship (37%), or using AI to address growing water-related risks (35%). Only 53% have implemented a water stewardship program.
"Water is as important as carbon or the other key environmental realms," said Amit Vyas, VP of Environmental Sustainability at Cox Enterprises, in the report. "For us, water isn't a standalone issue. It is fundamental to business resilience and long-term value creation."
The Execution Gap Widens
Perhaps most damning is the finding that despite continued investment, sustainability execution is actually deteriorating. The report's sustainability maturity index declined for the second consecutive year, falling from 111 in 2025 to 105 in 2026.
The execution gap is most visible in net-zero programs. Two-thirds of organizations (66%) acknowledge that aligning aspirational sustainability efforts with science-based targets is challenging. The portion of organizations falling behind on their net-zero goals increased dramatically from 1% in 2025 to 11% in 2026, while 29% have postponed their net-zero objectives—up from just 8% a year ago.
"Fragmented data, limited visibility across value chains, and a growing dependence on external stakeholders are making sustainability initiatives harder to deliver at scale," the report states.
The research reveals a significant shift in how organizations frame sustainability. Rather than focusing primarily on emissions reduction and compliance reporting, companies are increasingly prioritizing resilience, adaptation, and resource security. Nearly two-thirds of executives (64%) identify energy and critical-resource security as key drivers of sustainability investment, while 71% say securing access to critical resources now influences sustainability decisions more than emissions-reduction targets alone.
"Sustainability now focuses on resource efficiency, resilience, and supply chain security," said Francesco Pomponi, Professor of Sustainability and Environment at the University of York. "We are bridging a past carbon-focused approach and a future resilience-driven one."
This shift is reflected in investment priorities. Organizations are increasing sustainability investments in energy security (67%), supply chain localization and regionalization (66%), supplier diversification (56%), and energy efficiency (55%).
AI: Solution and Problem
The report identifies artificial intelligence as both a powerful enabler of sustainability execution and a growing environmental concern. Nearly half of executives (46%) say AI has significantly increased greenhouse gas emissions, while 70% report that AI's sustainability implications are discussed in the boardroom.
Yet concern about AI's environmental impact appears to outpace organizations' ability to measure it. Only 38% measure the energy consumption of AI systems; 34% measure AI-related carbon emissions; and just 25% disclose AI-related water usage.
Nevertheless, 71% of executives believe the benefits of generative AI outweigh its environmental impacts, up from 57% in 2025. Sixty-four percent say their organization is already using AI to advance sustainability initiatives, with applications including supply chain optimization (61%), energy efficiency (52%), and sustainability reporting (50%).
A Call for Fundamental Change
The report concludes with targeted recommendations, urging organizations to shift sustainability "from a compliance and reporting exercise to a source of resilience and business value." It calls for building resilience against climate-related disruptions, strengthening resource security, leveraging climate technology, and establishing a "sustainable AI control plane" to govern AI systems at scale.
"Sustainability is entering a new era," said Cyril Garcia, Group Executive Board Member and Head of Global Sustainability Services and Corporate Responsibility at Capgemini. "Organizations must move beyond compliance and reporting to build resilience, secure critical resources, create long-term business value, and ultimately preserve their sovereignty."
For a business community that has spent years celebrating sustainability commitments while failing to build the operational capabilities to deliver them, the message is clear: the era of easy climate rhetoric is over. The resilience reset is here—and most organizations are not ready.
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