Impacts to Enabling Functions
Understand how climate and nature risks are impacting enabling functions and explore what actions businesses are already taking to respond.
Enabling functions underpin the governance, direction, and operational integrity of the organisation, including finance, legal, human resources, strategy, design, and governance. These functions ensure that core business activities are supported by robust decision-making, risk management, capital allocation, and regulatory compliance.
Technology & Data Security
Digital infrastructure, including data centres, cloud systems, and IT networks, may be exposed to extreme weather events such as flooding, heatwaves, and storms, which can disrupt power supply and system availability. Enabling functions are highly dependent on real-time, accurate data, and integrated systems. Limited redundancy, reliance on centralised platforms, and tight coupling between systems increase vulnerability to disruption.Â
Data or system failures can disrupt financial reporting, compliance processes, workforce management, and strategic planning simultaneously, leading to organisation-wide decision-making breakdowns.Â
Compliance & Legal
Indirect exposure arises from climate impacts triggering regulatory change, enforcement actions, or legal claims. Organisations with complex global operations, fragmented compliance systems, or limited regulatory expertise are more sensitive to evolving requirements.
Non-compliance in one area (e.g., emissions reporting or supply chain due diligence) can lead to broader legal and reputational consequences across markets.
Human Resources
Workforces are exposed to heat stress, extreme weather events, and environmental degradation, affecting health and safety. Roles requiring physical presence, high cognitive performance, or specialised skills are particularly sensitive to environmental stress and disruption.
Workforce disruption can affect multiple business functions simultaneously, reducing productivity, and organisational resilience.
Financial & Capital Allocation
Climate impacts on assets, supply chains, and markets indirectly affect financial performance and capital requirements. Organisations with high exposure to climate-sensitive assets, sectors, or geographies are more vulnerable to financial volatility.
Financial stress in one area can constrain investment across the business, limiting resilience and adaptation capacity.
Strategy & Alignment
Indirect exposure arises from shifting market conditions, stakeholder expectations, and environmental constraints. Organisations with rigid strategies, slow decision-making processes, or limited climate integration are more sensitive to disruption.
Strategic misalignment can affect all business functions, leading to inefficiencies, missed opportunities, and competitive decline.
Understanding how Enabling Functions are disrupted
Exposure: Where governance and decision-making systems are linked to risk
Exposure for enabling functions is about where critical systems, expertise, governance processes, and decision-making structures are located, and whether those are likely to be disrupted by climate or nature risks. These functions may not be directly affected by events such as floods, heatwaves, or storms, but can still be significantly disrupted if the systems, infrastructure, people, or regulatory environments they depend on are affected.
Understanding exposure helps organisations identify where disruption to governance, oversight and decision-making is most likely to begin.
Sensitivity: Why enabling functions can be difficult to stabilise under pressure
Enabling functions are highly sensitive because they depend on stable systems, reliable data flows, clear governance structures, predictable regulatory environments, and a healthy, available workforce. When these conditions are disrupted, impacts can spread quickly across the organisation.
Impacts are rarely immediate failures. Instead, organisations may experience degraded data quality, slower or less effective decision-making, rising compliance costs, reduced workforce productivity, or increasing financial pressure before more severe disruption occurs.
Systemic amplification: How disruption spread across the organisation
Disruption in enabling functions rarely stays contained. Because these functions underpin governance and coordination across the business, a shock in one area can quickly cascade into others.
Disruptions to governance, data, people, finance, or strategy can interact and reinforce each other, turning isolated risks into organisation-wide challenges.
Adaptive Capacity: How to strengthen enabling functions
Climate and nature risks place growing pressure on the systems that guide organisational decisions, allocate resources, and ensure compliance. The goal is to strengthen the resilience of these enabling functions so that they can continue to support the business under changing conditions.
Organisations are already taking practical steps to build adaptive capacity. For example, they are:
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Strengthening technology and data resilience by diversifying infrastructure, improving cybersecurity, increasing redundancy, and ensuring critical systems can continue operating during disruption.
- Enhancing compliance and legal capability by strengthening governance frameworks, improving monitoring systems, and staying ahead of evolving climate, environmental, and disclosure requirements.
- Supporting the workforce by improving health and safety measures, increasing flexibility in where and how people work, investing in skills related to climate and sustainability, and planning for disruption.
- Building financial resilience by stress-testing portfolios, integrating climate risks into investment decisions, securing access to sustainable finance, and maintaining flexibility in capital allocation.
- Embedding climate and nature considerations into strategy by improving data and scenario analysis, aligning governance processes, and ensuring that long-term planning reflects changing environmental and market conditions.
These actions help ensure that enabling functions remain robust, responsive, and able to guide the organisation through increasing uncertainty.
