How Schneider Electric Embeds Adaptation into Sustainability

As the world continues to deal with escalating floods, heatwaves and storms disrupting economies and supply chains, the question is no longer whether to adapt, but how fast.

Physical climate risks could erase as much as 5–10% of industrial companies’ annual EBITDA and drive up to an 18% loss in global GDP by 2050. The human costs are equally severe: an estimated 250,000 additional deaths per year could result from extreme weather. The new reality is clear – climate change is already here, and adaptation must take centre stage.

“As we accelerate efforts to limit global warming, mitigation remains absolutely critical,” says Esther Finidori, Chief Sustainability Officer at Schneider Electric. 

“We must keep cutting emissions and scaling clean technologies. But climate change is already shaping our reality, and adaptation is no longer optional.

 “At Schneider Electric, we’re embedding adaptation into our strategy to protect operations, strengthen supply chains, and unlock innovation. From risk identification to vulnerability reduction, real-time detection, and effective response, we’re building resilience that drives long-term growth. We also guide our customers to do the same with risk management and resilience strategies.

 “Why? Because mitigation and adaptation go hand in hand. Companies that act early avoid losses, secure continuity, and create new opportunities in a changing world.”

Understanding risk

Where mitigation tackles the causes of climate change, adaptation tackles its consequences. The Intergovernmental Panel on Climate Change (IPCC) defines climate physical risk through three interlinked factors: hazards, exposure and vulnerability.

Together, these form the backbone of a business’s climate risk profile. Effective risk management – grounded in data, scenario analysis and science – can turn this profile from a liability into a platform for innovation.

Schneider Electric’s adaptation strategy

As a global manufacturer and sustainability leader, Schneider Electric has embedded adaptation into its enterprise risk management framework, demonstrating how proactive climate resilience can simultaneously protect operations, strengthen supply chains and foster innovation.

By combining on-site audits with scientific data and scenario modelling, Schneider’s Environmental Risks team quantifies the material impact of climate hazards across its global network.

The company’s end-to-end resilience plan spans sourcing, manufacturing, and delivery. Supplier mapping identifies geographic vulnerabilities, while diversification plans – such as the Power of Two strategy – ensure alternative production sites for critical components. By 2025, 90% of critical offers will have dual manufacturing capabilities and all major distribution centres will be able to reroute 80% of flows within five days.

Predictive weather analytics give sites early warnings to activate continuity plans before disruptions occur. By mid-century, more than half of Schneider’s 521 sites may face high exposure to hazards – making these predictive and responsive systems decisive for operational security.

True adaptation extends beyond company walls. Schneider collaborates with suppliers, research institutions, and peers through the World Business Council for Sustainable Development (WBCSD), sharing insight on scalable, nature-based adaptation solutions.

Linking local action to global impact

Adaptation also provides opportunities to deliver tangible social and environmental value. Through the Livelihoods Carbon Funds, Schneider Electric has financed ecosystem restoration, agroforestry, and rural energy projects that enhance resilience for 1.5 million people across Senegal, Indonesia and France. Mangrove restoration and fuel-efficient cookstove initiatives are regenerating critical ecosystems while improving food security and livelihoods.

The business is also on track for all sites to deploy local biodiversity conservation and restoration programs by the end of 2025, further strengthening the interface between operational resilience and ecological stewardship.

The business case for climate resilience

Far from being a compliance exercise, robust adaptation planning is a financial imperative. Avoided losses, improved efficiencies and innovation gains can dramatically enhance long-term competitiveness. The World Economic Forum warns that overlooking physical climate risks is one of the most significant blind spots in corporate sustainability today.

Embedding adaptation into strategic planning – from investment and insurance decisions to supplier engagement – positions companies to thrive amid disruption. The leaders who act today will not only weather volatility but will shape the markets and technologies of tomorrow.