Preparing for climate risks and opportunities makes good business sense

When you’re faced with the day-to-day pressures of running a small business, it’s understandable that preparing for climate change may be pushed down your ‘to do’ list.

But Queensland is already experiencing the impacts of climate change. Average temperatures across the state are currently 1°C higher than they were 100 years ago. Recent decades have shown a clear warming trend, and these changes will only continue. And extreme weather events and natural disasters are now a regular part of Queensland business life.

Investing time in assessing and preparing for climate risks and opportunities makes good financial sense. Here are some possible risks to consider:

Damage to property and resources: One of the more obvious impacts of climate change is physical damage caused by more intense and frequent severe weather events like storms, cyclones, flooding, drought or wildfires. Businesses need to consider risks to the health and safety of their workforce and customers, as well as prepare for the increasing likelihood of damage to property, crops and other business assets. In addition, damage to transport, power and communication infrastructure – such as roads, powerlines and internet connection – can disrupt operations for extended periods.

Supply chain disruptions: We saw the impact the Covid pandemic had on global supply chains, and we can expect climate change to cause similar challenges.  Extreme weather events can disrupt road, rail and sea transport impacting inbound raw materials and outbound product or service deliveries causing delays and increased costs. There have already been examples of this around the world. In Australia, for example, flood-damaged roads affected banana supplies from Far North Queensland in early 2025 more so than damaged crops.

Higher insurance costs: The increasing severity and frequency of extreme weather events is driving the up the cost of insurance premiums – not just for people in disaster-prone areas but right across the country. And in some ‘high-risk’ areas, it’s possible property may become uninsurable. According to the Insurance Council of Australia, by May 2025 insured losses had reached almost $1.5 billion following two extreme weather events earlier in the year: the North Queensland floods and ex-Tropical Cyclone Alfred.

Increased regulation: Governments around the world are increasing regulation to address climate change. This may include increasing reporting and disclosure requirements and introducing emissions reduction mandates. Such regulations may require changes to your operations or increased costs to ensure compliance. Small businesses that are part of the supply chains of larger businesses may find they get more questions about their sustainability performance even if sustainability reporting legislation doesn’t apply to them directly.

Liability risks: Liability risks arise from a failure to mitigate, adapt to, disclose or comply with changing legal and regulatory expectations. This can include how businesses cater for climate change in their products or services. One example of litigation risk is greenwashing – regulators, such as the Australian Competition & Consumer Commission – are already holding businesses to account for overrepresenting the extent to which their practices are environmentally friendly, sustainable or ethical.

Reputational impacts: Growing customer preferences for sustainably made products and increasing investor and community scrutiny may mean that businesses that don’t adapt may be faced with decreased demand, higher capital costs or a reduction in capital availability. It may also be more difficult to attract the best talent, with a growing trend towards employees seeking employers who manage their environmental impacts.

The changing climate can also present opportunities for your business.

By embedding sustainability practices and building resilience into your business you can:

• Save business costs through driving resource efficiencies, such as reducing energy, water and waste bills
• Increase your competitive advantage by adapting to consumer preferences for responsibly produced goods and services
• Increase the value of your fixed assets by building-in features that will deliver resilience over the long term, for example energy efficient buildings
• Tap into new sources of finance such as government grants or ethical investors

So what can you do to prepare?

With so many factors to consider, it can be hard to know where to start.

Our new climate risk and adaptation module, available through our free ecoBiz program, features practical tools and resources designed to step you through the process.

Developed with climate experts and tailored to suit small and medium businesses, the module helps you identify, track and plan for climate risks and opportunities based on your location. It steps you through the process leaving you with a practical action plan tailored to your situation.

By being aware of the risks and opportunities for your business, you can make more informed decisions, secure your business’s competitiveness and thrive in a changing climate.