Watch this video for a quick introduction to managing climate risks and why it’s a priority for leaders in infrastructure, transport, and local government sectors.

In its 2025 Global Risks Report, the World Economic Forum highlights that climate-related risks dominate the top concerns for the next decade, with extreme weather events, biodiversity loss, critical changes to Earth systems, and natural resource shortages taking centre stage. For sectors like infrastructure and transport, the message is clear: climate risks are not just future possibilities—they are immediate challenges that demand urgent attention.

In fact, 8 out of 10 companies in the ASX100 acknowledge climate change as a risk to their business, according to KPMG’s 2024 Australian Sustainability Reporting Trends report. This statistic underscores the growing recognition of climate risks across industries and the need for robust strategies to manage them effectively.

Climate change is already disrupting supply chains, damaging critical assets, and increasing operational costs. For leaders in infrastructure, transport, and public services, managing climate risks is as important as reducing emissions. But here’s the silver lining: managing these risks doesn’t just protect your organisation—it also creates opportunities for innovation and sustainability.

This blog post builds on the previous ones in our series, where we introduced the carbon foundations needed for emissions tracking and the balancing act of net zero. Now, we focus on understanding and addressing climate risks—both physical and transition risks—to ensure your organisation is resilient and prepared for the challenges ahead.

Whether you’re responsible for managing public infrastructure, overseeing transport systems, or delivering public services, this post provides practical guidance to identify, assess, and manage climate risks as part of your net zero strategy.

The two types of climate risks

Physical risks

Physical risks arise from the direct impacts of climate change, such as extreme weather events, rising temperatures, and sea-level rise.

Examples for transport and infrastructure:

• Flooding damaging roadways and bridges.
• Extreme heat causing rail tracks to buckle.
• Increased maintenance costs due to more frequent storms.

Transition risks

Transition risks are associated with the shift to a low-carbon economy, including policy changes, technological advancements, and market dynamics. However, these risks also open opportunities for innovation, such as adopting cleaner technologies or developing sustainable construction practices.

Examples for transport and infrastructure:

• Stricter vehicle emissions standards requiring fleet upgrades.
• Rising carbon prices increasing operating costs.
• Shifting market demand for low-carbon construction materials.

Opportunities

Proactively addressing climate risks not only safeguards your organisation but also opens the door to new possibilities—driving innovation, enhancing resilience, and creating value.

Examples for transport and infrastructure:

• Using recycled and/or low-carbon construction materials
• Transitioning to electric vehicles, and installing solar and batteries
• Investing in flood and heat-resistant infrastructure
• Developing urban greening

Let’s look at how one regional council in Australia tackled climate risks in transport infrastructure, turning challenges into opportunities for resilience.

Case example – building climate resilience in transport infrastructure

In recent years, a regional council in Australia faced increasing disruptions due to severe weather events affecting its transport infrastructure. Flooding frequently damaged critical roads and bridges, cutting off access for local communities and businesses. These events highlighted the urgent need to manage physical climate risks proactively.

Challenges

• Flood vulnerability: Key transport routes were regularly inundated, leading to closures and expensive repairs.
• Economic disruption: Prolonged road closures disrupted supply chains and access to essential services, impacting local economies and community wellbeing.
• Safety risks: Flooded and damaged roads posed significant safety concerns for motorists and transport operators.

Actions taken

1. Climate risk assessment
   • The council conducted a detailed risk assessment to identify flood-prone areas and forecast the potential impacts of climate change on local infrastructure.
   • Scenario analysis was used to predict the likelihood of extreme weather events over the next 20 years.
2. Infrastructure upgrades
   • Vulnerable sections of roads and bridges were elevated to mitigate flooding risks.
   • Drainage systems were enhanced to improve water flow during heavy rainfall.
   • Heat-resistant materials were incorporated into road construction to withstand rising temperatures.
3. Community engagement
   • The council engaged local stakeholders, including residents and businesses, to ensure the upgrades addressed community needs and concerns.
   • Regular updates were provided to build trust and transparency about the climate adaptation initiatives.
4. Strategic investment
   • Funding was secured from state and federal grants to support the upgrades, ensuring the project could address both immediate vulnerabilities and future risks.

Outcomes

• Reduced disruptions: The upgrades significantly reduced road closures during adverse weather events, maintaining connectivity for communities and businesses.
• Enhanced safety: Improved infrastructure reduced the risk of accidents and damage during extreme weather conditions.
• Economic resilience: By ensuring consistent transport access, the council supported economic activities vital to the region, including agriculture and logistics.

Assessing climate risks and opportunities

To build resilience and unlock new opportunities, organisations must identify and evaluate the risks they face, as well as their potential opportunities or benefits . Here’s how to approach this:

1️⃣ Identify risks and opportunities

• Map out potential physical and transition risks across your operations and supply chain.
• At the same time, identify areas where addressing risks could lead to efficiency gains, innovation, or other advantages.
• Engage stakeholders, including suppliers, to gain a holistic view of your organisation’s climate risks and opportunities.

2️⃣ Evaluate likelihood and impact

• Assess the likelihood and potential impact of each risk and opportunity.
• For risks: Consider their potential to disrupt operations, finances, or to damage reputation.
• For opportunities: Drawing on the above example, evaluate how actions like route optimisation, renewable energy integration, or sustainable product offerings could deliver value.
• Use tools like scenario analysis to explore how different climate scenarios could affect your risks and opportunities.

3️⃣ Prioritise focus areas

• Focus on risks with the greatest potential negative impact, such as disruptions to critical infrastructure or rising costs.
• Similarly, prioritise opportunities that align with your strategic goals, such as implementing energy-efficient technologies or developing carbon-neutral services.

By assessing both risks and opportunities, you can craft a climate strategy that addresses vulnerabilities while driving innovation and sustainability.

Embedding climate risk management into strategy

Once risks are identified, integrate them into your broader organisational strategy:

Governance and oversight

• Assign accountability for climate risk management at the board and executive levels.
• Ensure climate risks are part of your organisation’s risk management framework.

Action plans

• Develop mitigation plans for high-priority risks, such as upgrading infrastructure to withstand extreme weather or transitioning to low-carbon technologies.

Monitoring and reporting

• Regularly review climate risks and update your strategy as new information becomes available.
• Align reporting with frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) or AASB S2/ASRS.

For more information on how to assess and manage climate risks, visit our page on climate risks and opportunities. We offer practical guidance to help you navigate the complexities of building climate resilience into your organisation.

More on AASB S2/ASRS

For those interested in learning more about AASB S2, we offer a free course covering everything you need to know about these standards and how they apply to your organisation. Understanding AASB S2 is crucial for aligning your net zero efforts with emerging regulations and avoiding greenwashing.

Next up: Crafting your climate strategy

Now that you understand how to identify and manage climate risks, the next step is to turn these insights into a clear, actionable climate strategy. In the next post, we’ll explore how to develop a comprehensive strategy that aligns with your organisation’s goals and values. From setting ambitious yet achievable targets to prioritising high-impact initiatives, we’ll guide you through the process of turning climate risks into opportunities for innovation and resilience.

Stay tuned as we continue to build your roadmap to net zero.

Need expert guidance?

Managing climate risks is a complex but critical part of your net zero journey. From conducting detailed risk assessments to integrating climate resilience into your organisational strategy, having the right expertise can make all the difference.

At 100% Renewables, we help organisations like yours identify, assess, and manage climate risks while aligning with best practices such as the Task Force on Climate-related Financial Disclosures (TCFD) and AASB S2. Whether you need support with scenario analysis, prioritising risks, or embedding climate considerations into governance, we’re here to guide you every step of the way.

Contact us today to learn how we can help your organisation build resilience, meet stakeholder expectations, and drive long-term success.