How are EU firms adapting to climate change?

More than two-thirds of EU firms surveyed said they were feeling the impact of climate change, and had taken a financial hit from climate events such as droughts, flooding, wildfires and storms. More than one-fifth of firms said climate events were a “major impact” on their business. Southern European companies, particularly in Portugal, Spain and Romania, report more frequently that they are feeling the impact of extreme weather and other climate change effects.

While EU businesses are struggling with the direct consequences of climate change, only about half of them are investing to adapt to its consequences. The good news is that the share of firms investing in adaption has grown steadily in recent years, in Europe and in the United States. Large companies are more likely than smaller ones to invest in adaptation, 62% vs. 44%. Adaptation takes many forms, such as buying insurance to protect against climate-related losses. About one-quarter of EU and US businesses have bought insurance to protect themselves against climate events.

EU firms are increasingly aware of the green transition and are actively investing in it. Among EU firms, 36% view the transition to stricter climate standards and regulations as a risk over the next five years, compared with 27% of companies that see it as an opportunity to develop green products and innovative technological solutions. Large firms are more likely than small businesses to view the transition positively. A smaller share of US firms says the transition poses a risk than EU ones (27% vs. 36%).

Around 90% of EU and US firms have taken measures to reduce greenhouse gas emissions. Companies on both sides of the Atlantic are investing in climate and environmental measures like reducing waste, recycling and consuming less energy. But EU firms are more likely than their US peers to have invested in sustainable transport and renewable energy generation. In Finland, 99% of firms have taken to reduce emissions, while that number drops to 69% in Cyprus.

About half of firms surveyed in the European Union and in the United States invested in energy efficiency in 2024, as the best way to reduce energy costs is to consume less energy. In the European Union, large firms (62%) and manufacturing firms (56%), which are more energy-intensive, lead the way. There are big differences between EU regions, however. In wealthy northern countries such as Finland, Belgium, the Netherlands and Denmark, about 60% to 70% of firms invested in energy efficiency, compared with only 38% in Greece and 33% in Lithuania.