Relationship between Climate Change and Business Risk: Strategies for Adaptation and Mitigation: Evidence from a Mediterranean Country

Abstract

Global corporate operations are facing significant challenges as a result of climate change. Businesses are exposed to a variety of dangers because of their effects, which might include anything from changing regulations to excessive weather. The objective of this research is to examine the connection between business risk and climate change, with a particular emphasis on the success of different adaptation and mitigation tactics used by Greek companies. A cross-sectional study was carried out among 345 enterprises in Greece using a quantitative research methodology. To investigate the relationship involving company risk management, adaptation, and mitigation plans with climate change risks, descriptive, correlational, and regression analyses are employed. Businesses are most distressed about the financial risks associated with climate change, followed by supply chain disruptions and physical hazards. Moreover, developing climate-resilient infrastructure and enhancing catastrophe preparedness have evolved into vital adaptation tactics. Also, converting to renewable energy sources is the most preferred approach to mitigation initiatives. Furthermore, the study demonstrated a significant positive correlation between climate change mitigation strategies and effective business risk management. Nevertheless, as perceived climate change risks increased, business risk management effectiveness decreased. The study suggests that Greek businesses are actively engaging in climate change risk management strategies that embrace both adaptation and mitigation strategies. Yet, the study recommends a continued focus on developing resilient infrastructure and collaborative efforts with local communities, governments, and NGOs. Businesses should also prioritize the shift to renewable energy sources to better mitigate their carbon emissions. This research contributes significantly to understanding how companies can strategically address the challenges of climate change. Furthermore, the study provides valuable insights into the dynamics of climate change adaptation and mitigation in a specific geographical area, thereby enhancing the global dialogue on climate resilience and sustainable business practices.