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Adapting to emerging risks: climate change and cyber threats
ArticleJanuary 1, 1
The new age of business risk: climate change and cyber threats
The landscape of emerging business risks is rapidly evolving, with climate change and cyber threats rising as two of the most significant challenges for modern organisations.
In the last decade, the cyber threat landscape has changed drastically. Our increased ‘hyperconnectivity’, the widespread adoption of cloud computing and the increasing popularity of remote working have meant organisations are facing new angles of attack. Additionally, malicious software is becoming more sophisticated — and accessible — than ever.
Organisations are also increasingly dependent on digital systems, meaning threats aren’t just limited to hostile attacks. Buggy code, overreliance on external technology providers and faulty hardware can all send operations grinding to a sudden halt. This all means that building a robust cybersecurity framework has become a critical part of building overall resilience.
At the same time, climate change presents substantial risks that threaten operational continuity and demand urgent adaptation strategies. Floods can destroy stock. Storms can disrupt supply chains. Changing weather patterns can render whole regions uninhabitable.
What were once low likelihood, high impact events are increasing in frequency across a rapidly changing backdrop of geo-political and environmental instability. A proactive adoption of the basics in cyber and environmental risk management can defend against or reduce the impact of such events far better than a need to ‘clean up’ the enormous disruption of such incidents.
Traditional risk management strategies, often reactive and siloed, struggle to address the complexities of climate resilience risks and cyber vulnerabilities effectively. Addressing these emerging business risks requires a shift toward a proactive and resilient approach, where risk mitigation strategies are integrated into every layer of operations. When executed successfully, these strategies mean organisations won’t just be better defended from threats, they’ll also be more able to secure long-term stability and benefit from operational sustainability.
How emerging risks are impacting business insurance and compliance
The rise of climate and cyber risks has had a marked impact on organisations’ insurance and compliance requirements. As climate related and digital threats intensify, insurance providers are reassessing policies and premiums to reflect the increased risks. Companies operating in climate-sensitive industries, for example, may see higher premiums for property insurance due to potential climate related damage. Likewise, insurance for cyber coverage now factors in digital infrastructure, cyber risk management protocols and history of data breaches, leading to complex assessments that impact policy terms.
Regulatory requirements are also shifting drastically to address the threats posed by these emerging risks. The EU’s Digital Operational Resilience Act (DORA) is just one example of this. Focusing on building resilience and minimising disruption in the financial services industry, its stringent requirements are already causing major shifts in how organisations approach their cyber resilience posture.
Adapting to these new insurance and compliance landscapes requires proactive risk assessment. Regular risk evaluations for climate and cyber threats help organisations anticipate challenges and maintain compliance. By aligning their operations to these risk mitigation strategies, companies can support their eligibility for comprehensive insurance coverage and maintain favourable terms, while addressing sustainability challenges and cybersecurity obligations.
Why a proactive approach to climate resilience is essential
To navigate climate resilience risks, organisations must adopt a proactive stance on climate resilience. Climate resilience refers to an organisation’s ability to anticipate, prepare, adapt and respond to environmental disruptions.
The impact of these changes can take a number of forms. With both extreme weather events and changes to historic weather patterns on the rise, there’s a host of physical impacts to be accounted for. There are also regulatory changes around emissions to be considered. With both national and international bodies implementing legislation, this change will come from a wide variety of sources. This all means that climate risks can and will affect operational stability — making forward thinking a necessity.
Additionally, energy-efficient technologies and waste reduction practices contribute to both resilience and sustainability challenges by lowering costs and improving environmental performance. By embedding climate resilience into the business model, organisations can support both their environmental and financial goals.
Strengthening cybersecurity to safeguard your business
In today’s hyperconnected world, cybersecurity for businesses is more than just a niche defensive measure — it’s foundational to effective risk management and resilience. Cyber threats, ranging from business email compromise to ransomware, pose severe risks to business continuity and customer trust. If that wasn’t concerning enough, the threat is also steadily growing in severity, impact and the targeted nature of some compromises.
With software and technical support now available for purchase as a service, cybercrime is no longer the exclusive domain of tech-savvy hackers. Instead, many traditional criminal organisations are now branching out: tempted by the promise of large ransomware payouts and a veil of anonymity.
To strengthen cybersecurity, organisations should begin with thorough risk assessments to identify vulnerabilities. Regular audits of the basics, alongside an understanding of an organisation’s ‘crown jewel’ assets and an exercised response plan are essential practices that support a robust cybersecurity framework.
Employee training also plays a crucial role, as human error remains one of the most common points of failure in cybersecurity. Malicious actors don’t just leverage software to wreak havoc. Many are also adept at social engineering: psychologically manipulating people into performing harmful actions. Empowering your colleagues with training is a powerful way to counter this threat.
Working with experts to tackle climate and cyber challenges
Managing emerging business risks like climate and cyber are vital to maintaining a healthy organisation, today and tomorrow. However, they’re also fields that require specialised knowledge, deep industry expertise and data-led strategy to effectively tackle.
By partnering with Zurich Resilience Solutions (ZRS), your organisation benefits from access to a network of over 750 specialist Risk Engineers with deep experience in relevant industries and unmatched access to risk insurance data.
We offer a comprehensive suite of services that includes Property, Liability, Health & Safety, Energy, Motor, Climate, Cyber and Enterprise Risk Management to help you understand risk, build resilience and seize opportunity. Together, we’ll deliver tailored risk assessments, data-led insights and practical strategies to fortify your operations against these emerging threats.
Our goal? To manage the risks you know, and create a plan for those you don’t — giving you the confidence and assurance that you’re prepared for every eventuality.