• Climate and nature risks are already driving supply chain disruption, insurance gaps, and rising capital costs across sectors
• Companies that integrate climate and nature into core strategy can protect enterprise value and unlock new commercial growth
• CFO grade transition planning is emerging as a governance and capital allocation priority for boards and investors
As climate volatility tightens supply chains and nature degradation reshapes risk profiles, companies that fail to embed transition planning into corporate strategy face mounting financial exposure and lost commercial opportunity. That is the central warning from the Council on Sustainability Transformation, a cross sector group convened by ERM, in a new white paper urging businesses to move decisively beyond siloed sustainability programs.
The paper, Aligning Climate, Nature, and Markets, argues that climate and nature considerations must be treated as core strategic inputs rather than peripheral reporting exercises. Without that shift, the Council warns, firms risk undermining long-term value creation just as markets, regulators, and capital providers sharpen their focus on transition readiness.
Climate And Nature Risks Are Now Financial Risks
The Council’s analysis reflects a growing consensus among investors and insurers that environmental degradation is no longer a distant concern. The paper notes that accelerating climate impacts and nature loss are already manifesting as supply-chain disruption, widening insurance protection gaps, and rising capital costs across multiple industries.
Rather than viewing these pressures solely as compliance challenges, the Council frames them as strategic inflection points. Companies that integrate climate and nature into enterprise-wide decision-making are better positioned to manage downside risk while identifying new sources of resilience and growth.
Sabine Hoefnagel, ERM’s Global Leader of Sustainability & Risk, said: “We are now at a point where climate and nature risks are material, accelerating, and already reshaping markets. However, this white paper sets out how those companies taking action to integrate climate and nature into their core strategies are not only mitigating risk, they are capturing new value while building the foundations for long-term growth.”
From Ambition To Action With CFO-Grade Discipline
A central theme of the paper is execution. The Council stresses that high-level climate or nature ambitions are insufficient unless translated into measurable, finance-aligned plans that shape capital allocation and operational priorities.
Its first recommendation calls on companies to identify and quantify material impacts, risks, and opportunities across climate and nature with CFO grade rigor. Tools such as scenario analysis, natural capital accounting, and true cost accounting are highlighted as mechanisms to inform investment decisions and strengthen business resilience.
This emphasis reflects rising expectations from boards and investors that sustainability considerations be integrated into mainstream financial planning rather than treated as parallel processes.
Local Action Anchored In Global Goals
The paper also challenges companies to bridge the gap between global climate commitments and local operational realities. It urges businesses to prioritize local action informed by global goals, grounding strategies in robust, site-specific data.
Short-term pressure points such as water scarcity, land use, and biodiversity loss are cited as immediate risks that demand targeted responses. Addressing these issues locally, the Council argues, is essential to maintaining operational continuity while supporting longer-term climate and nature objectives.
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Partnerships, Policy, And Market Shaping
Recognizing that no company can manage systemic climate and nature risks alone, the Council calls for external momentum building alongside internal action. Recommended steps include forging partnerships and coalitions to amplify impact, reduce shared risks, and unlock new sources of value across sectors.
The paper also highlights the importance of educating investors and engaging policymakers to help shape regulatory and market environments that support climate- and nature-aligned value creation. This reflects the growing role of corporate leadership in influencing the policy frameworks that govern transition pathways.
Hoefnagel emphasized the cost of inaction: “Leaders that invest in robust transition planning, align global ambition with local action, and work collectively with investors, policymakers, and peers will be far better positioned for the volatility ahead. As the paper makes clear, delay isn’t a neutral act, it’s a gamble that companies can’t afford to lose.”
A Broader Council Agenda On Resilience And Growth
This latest paper is the third in a series from the Council on Sustainability Transformation. The first focused on company-investor engagement as a catalyst for climate action, while the second addressed how business leaders can rethink sustainability strategies to build resilience and drive growth amid geopolitical, economic, and societal turbulence.
Taken together, the series reflects a shift in sustainability discourse from aspiration to execution, with transition planning increasingly viewed as a board level governance issue and a determinant of long-term competitiveness.
For executives, investors, and policymakers, the message is clear. Climate and nature integration is no longer optional or reputational. It is becoming a defining factor in risk management, capital access, and future growth in a rapidly changing global economy.
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