Climate risk is moving from a theoretical concern to a boardroom issue with real financial consequences. However, despite mounting evidence and intensifying regulations, new data suggests that many global businesses are still failing to take it seriously. A recent study by the Association of International Certified Professional Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) reveals a stark contrast between how companies in the EU and those elsewhere are responding to climate threats. While European businesses are accelerating investment in climate governance and disclosure, many of their international peers remain dangerously underprepared.
EU regulation driving real action
The authors of the study believe that much of the divide between EU and non-EU businesses in how they perceive and respond to climate risk can be traced to the regulatory environment in Europe. In particular, the implementation of the Corporate Sustainability Reporting Directive (CSRD) and its supporting European Sustainability Reporting Standards (ESRS).
Although the Omnibus Simplification Package was introduced to narrow the scope of CSRD applicability and ease certain reporting requirements, the broader direction of travel remains unchanged. In other words, the CSRD will still apply to at least 7,000 large firms in its initial phase and will expand to cover even more companies in the years to come.
The AICPA and CIMA study reveals that around 50 percent of EU-headquartered or operating organisations have now designed and implemented systematic risk management processes and established management-level climate risk committees. These governance structures are instrumental in ensuring climate risk is integrated into broader business and financial decision-making.
By contrast, fewer than one in five organisations outside the EU have put similar processes in place. Only 28 percent of non-EU companies even believe that investors are demanding more climate-related data and action, highlighting a significant misjudgment of shifting expectations across capital markets and regulatory landscapes.
Climate risks rising, but still underestimated globally
The findings echo concerns raised in the World Economic Forum’s (WEF) Global Risks Report 2025. This report identified extreme weather events and ecosystem collapse as two of the most pressing global risks for the next decade. Despite this, many businesses around the world continue to treat environmental risk management as a peripheral issue.
Similarly, the WEF found that climate- and nature-related challenges did not feature in the top ten business priorities where executives expected to see the greatest benefits from action over the next two years. This inertia comes despite a projected 7 percent hit to global corporate earnings by 2035 due to climate risks. Alarmingly, the WEF warns that firms unprepared for climate disruption could face losses comparable to those experienced during the COVID-19 pandemic.
Protect business value with sustainability training tailored to today’s climate risks
A business case too strong to ignore
What the EU-led approach demonstrates is that sustainability isn’t a cost but an investment in resilience, compliance, and long-term value creation. Companies taking early, structured action are already reaping reputational and operational benefits, while positioning themselves for the low-carbon economy that’s rapidly emerging. The lag outside of Europe also reveals a deeper issue: a global capability gap.
Companies must build the internal skills, systems, and leadership capacity to act. This means building the skills to manage climate risks as part of overall business planning – connecting sustainability with finance and helping teams turn climate data into clear business decisions. Ultimately, organisations that fail to do so will find themselves exposed to physical and transitional risks but also to declining investor confidence, regulatory goodwill, and customer loyalty.
Conclusion – the urgent need to build capability
What’s becoming increasingly clear is that sustainability isn’t a cost centre but a value driver. Businesses that embed sustainability into their core strategy are not only better prepared for regulatory demands but are also unlocking new market opportunities, cost reductions, and investor trust.
Early movers are already reporting measurable gains. From reduced energy bills and increased operational efficiency to brand differentiation and access to green finance, the return on sustainability investments is clear. According to multiple industry studies, companies with strong ESG performance often outperform their peers in profitability, risk mitigation, and long-term growth.
In saying that, ambition without capability won’t move the needle. Whether you’re in finance, operations, or leadership, understanding and acting on climate risk is key to future-proofing your business. Organisations that invest in corporate sustainability training today will lead tomorrow. On the other hand, those who delay may not only be behind the curve but out of the game altogether.
