When we talk about climate change, it’s often framed as an environmental issue. Polar bears on shrinking icebergs. Forests on fire. Oceans rising. While these images are real and urgent, they tell only part of the story. The other part — arguably the most important part — is what these environmental changes mean for people and society. Climate change is not just an environmental issue; it’s fundamentally a social issue.

Let’s start with the basics: What is climate risk? Climate risk refers to the threats posed by climate change to businesses, communities, and individuals. Companies traditionally manage risks like financial, operational, or regulatory threats. But climate risk introduces two key dimensions that can’t be ignored: physical risks and transition risks.

Physical risks are the direct consequences of climate events. Think of hurricanes, floods, wildfires, or heatwaves. These events disrupt businesses, destroy homes, and upend lives. For example, when a manufacturing facility floods, it’s not just inventory that’s lost; workers may also lose weeks of income, further exacerbating financial stress for families.

Transition risks, on the other hand, stem from societal changes in response to climate change. These include shifts in policy (like carbon taxes), technological advancements (such as the electrification of fleets), or evolving consumer expectations for sustainable products. Businesses must adapt, often at significant cost. And when they don’t, workers and communities can suffer.

Read more: California's climate legislation is coming — Are you ready?

Climate change as a social crisis

To see climate change solely as an environmental issue is to ignore its human toll. Climate disasters disproportionately impact the most vulnerable populations: those with the least resources to adapt or recover. Communities of color, low-income families, and those living in climate-sensitive regions often bear the brunt of climate impacts while contributing the least to the problem.

Consider the aftermath of Hurricane Katrina. Beyond the physical destruction, entire communities were displaced. Many residents — unable to afford relocation or rebuild — never returned to New Orleans, creating a vacuum of workers and dismantling social networks. These are the social ripple effects of climate disasters that persist long after the initial event.

Public health is another lens through which to view climate’s social impact. Rising temperatures lead to increased heat-related illnesses and deaths. Poor air quality exacerbates asthma, particularly in urban areas. Changing weather patterns enable the spread of mosquito-borne diseases to new regions. These impacts compound existing inequities, as those without access to healthcare or resources suffer the most.

The business perspective: Why this matters

For businesses, understanding climate change as a social issue isn’t just a moral imperative; it’s a strategic one. Companies rely on people and have a duty to factor in their wellbeing — employees, customers, and suppliers. When climate events disrupt these stakeholders, the ripple effects can be profound.

Take, for example, a company with a factory in a flood-prone area. If roads are washed out, employees may be unable to get to work. For those living paycheck to paycheck, this can lead to devastating impacts. For the business, it means lost productivity, possible staff turnover if workers are unable to return, and potentially damaged reputations if they’re perceived as neglecting their workforce.

Expanding the view outward, businesses must also consider how the social element of climate risk plays out with suppliers and customers. For example, a company that identifies risk of drought in its agricultural supply chain might work with smallholder farmers to improve soil quality by adding compost, which allows the soil to hold more moisture, for longer. As a result, during dry periods, these farmers become less likely to lose their crops and their income, and they have increased economic stability, while the company also benefits from a less volatile supply chain. 

Planning for these risks — and understanding the social dynamics at play—is essential to building resilience.

Read more: Materiality not morality — How to frame sustainability work in 2025

How SB 261 links to broader social issues

Climate change impacts the most vulnerable populations the hardest, so actively fostering an environment that allows people to thrive is an important part of a company's resilience and positive social impact strategy. 

For example, when workers are exposed to excessive heat for a prolonged time, it can create lasting health impacts as well as reduce productivity. Offering adequate cooling, hydration and rest, beyond the minimum health and safety standards required by law, places value on wellbeing, builds stronger and more resilient workplaces and communities. 

Read more: SB 261 — Turning climate risk into opportunity

Changing the narrative

Framing climate change as a social issue resonates with people in a way that purely environmental messaging often does not. This isn’t about saving penguins (important as that is); it’s about protecting your grandparents living in a flood zone, ensuring your children can breathe clean air, and safeguarding jobs and communities.

This perspective encourages businesses to move beyond just protecting physical assets. It asks them to prioritize their people. Start by asking: How will our employees be affected by a major climate event? How can we support them so they can support us in return? From there, consider concentric circles of impact: How will our suppliers, customers, and broader community be affected?

Taking action

Businesses can begin addressing climate risk by:

• Inventorying risks: Identify physical and transition risks across operations, employees, and value chains. For example, which facilities are most vulnerable to climate events? What patterns of disruption have already emerged?
• Engaging stakeholders: Include employees, suppliers, and community members in climate planning. Their insights can reveal blind spots and inspire innovative solutions.
• Using climate scenarios: Model future climate impacts under various scenarios to anticipate and prepare for risks.
• Finding opportunities: Climate resilience isn’t just about risk mitigation; it’s about adaptation and innovation. Identify new revenue streams or services that can thrive in a changing climate.

By reframing climate change as a social issue, we expand the scope of what’s at stake. This isn’t just about protecting ecosystems; it’s about safeguarding people, communities, and livelihoods. When businesses adopt this lens, they not only future-proof their operations but also contribute to a more equitable and resilient society.

Need help getting started? Reach out to our Head of Sustainability Strategy today.

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