Climate volatility is no longer a scenario; it’s a measurable reality. In 2024, Europe recorded its hottest year ever, with droughts affecting over 60% of agricultural land. The first half of this year has already been far too dry, especially in Central and Northern Europe. And yet, economic planning still treats extreme weather as an exception rather than the emerging norm.
The European Central Bank now warns drought alone could reduce Eurozone output by up to 15% over the coming years. And it won’t hit evenly. The impact will concentrate in infrastructure, agriculture, logistics, and urban systems. In other words: everything economies rely on to function under stress. As a decision-maker, you’re likely already seeing the cracks. Cost volatility. Supply disruptions. Talent leaving risk-exposed regions.
But the question is not whether these effects are real. The question is: how do we lead structurally through them?
Why drought isn't just about water
Heat, dryness, and resource scarcity affect systems, not just operations. Yet many organisations still treat climate risk as a compliance issue or sustainability topic. The result? Underprepared infrastructure. Isolated crisis response. And capital planning that assumes the past is still the baseline.
Common Organisational Failures in Climate Risk Strategy:
- Risk framed as “exceptional”. Despite three years of record drought in parts of Europe, many investment models still treat climate volatility as an outlier, not an operating norm.
- Infrastructure without resilience logic. Roads, grids, warehouses, plants - most were built on historical weather data, not future risk profiles.
- Fragmented ownership. Climate adaptation often falls between sustainability, operations, and public affairs—with no clear accountability at the system level.
- Strategic inertia. Climate risks are known but not integrated. Strategy stays static, while real-world dynamics shift fast.
The wrong question: "How do we protect our assets from drought?" The better one: "How do we rethink system value when climate volatility becomes permanent?"
Climate as a structural variable
Drought doesn't just dry up crops or strain water supply. It alters how value is created, protected, and lost. Energy systems falter. Urban mobility breaks down. Cooling costs surge. Labour productivity drops. And political pressure rises.
These are not climate events. They are operational conditions. If organisations treat them as “weather shocks,” they will miss what’s actually changing: the system logic itself.
Key questions leaders need to ask:
- Which parts of our business model assume stable environmental conditions?
- How would asset valuation change if water stress became the norm?
- Where do we rely on third-party infrastructure with low climate resilience?
- Who owns the climate narrative in our executive team?
From exception management to systems leadership
Responding to drought isn’t just about technical adaptation. It’s about governance, priority-setting, and capital allocation. The organisations that move first won't just be better prepared; they'll lead the terms of resilience.
A real example:
A European energy provider recently restructured its regional investment model after three years of grid instability during summer droughts. Instead of treating outages as isolated risk events, the company reclassified drought exposure as a systemic input into network design, maintenance cycles, and rate modelling. The result: faster regulatory clearance, lower insurance costs, and new investor confidence.
The Three Levers for Structural Climate Strategy
Systemic Clarity
Not "Where are our water-saving measures?", but: "Where are the structural weak points in our operating model under prolonged climate stress?"
Strategic Ownership
Who drives the climate risk agenda? Who translates volatility into investment logic? Clear governance turns fragmented awareness into actionable direction.
Capital Alignment
Capital follows strategy. And when climate risk is structurally embedded, capital becomes a driver of resilience—not just a cost of adaptation. If climate isn't embedded in your planning logic, it won't be priced in. Leading organisations adjust their capex portfolios, supplier terms, and infrastructure decisions accordingly.
Our Approach: Making Climate a Structural Priority
We work with leadership teams navigating structural climate risk. Not to create ESG reports. But to build future-fit systems.
Specifically, we support organisations with:
- Translating regional climate risk into organisational exposure profiles and investment signals
- Identifying system-critical vulnerabilities in infrastructure, operations, and governance
- Building forward-looking capital and scenario models that reflect climate-adjusted assumptions
- Designing internal ownership structures and decision architectures for climate resilience
Book a Climate Strategy Call
We help leadership teams move beyond treating climate as merely a compliance issue and start recognizing it as a structural priority, especially in the context of Green Technologies.
In this 30-minute call, we’ll help you:
- Identify where your current strategy may assume outdated climate conditions
- Discuss how drought and volatility could reshape your sector’s operating logic
- Explore first steps for integrating resilience into governance and capital planning
This is not a sales pitch. It’s a strategic conversation for leaders navigating uncertainty.
Let’s talk about what resilience really looks like for your context.