As concerns grow about the risks of a disorderly climate transition, business leaders worldwide view sustainability as a driver of competitiveness and resilience, says business organisation the World Business Council for Sustainable Development (WBCSD).

The WBCSD’s 'Business Breakthrough Barometer 2026' report shows that 68% of the more than 500 business leaders surveyed view a disorderly climate transition – defined as an unplanned and poorly coordinated transition – as more likely than a year ago, with 40% saying such a transition would significantly disrupt operations.

This growing concern is driven by intensifying physical climate impacts, climate policy volatility and reversals and geopolitical instability, which are driving rising costs and disrupting supply chains, the report says.

Further, 92% of business leaders expect sustainability to be a source of competitive advantage over the next five to ten years, with 89% of respondents maintaining or increasing investment in sustainability-linked initiatives.

Businesses are scaling-up investment in measures such as clean power, electrification, circularity and regenerative agriculture because these are the most cost competitive, secure and resilient options available.

Falling technology costs, exposure to fossil fuel price volatility, climate impacts and rising supply chain risks are shifting the economics decisively in their favour, the WBCSD says.

The report also shows that 47% of businesses report facing higher climate-related costs in the past year.

In North America, this figure rises to 94%, compared with 60% in East Asia and the Pacific and 39% in Europe and Central Asia.

However, only 15% of leaders believe their companies are fully prepared to manage a disorderly climate transition, the WBCSD says.

Therefore, 85% of business leaders are calling for strengthened and predictable climate policy without delay as the best route to manage risks and costs. They highlight the need for long-term policy frameworks, clean energy investment, supply-side incentives such as producer subsidies and the use of public procurement to accelerate implementation.

Additionally, 37% of senior business leaders say they would accept higher near-term costs to reduce their exposure to future risks, the report notes.

The report’s insights are intended to inform and support government decision-making, as an overwhelming majority of businesses, at 96%, now factor climate transition dynamics into their investment decisions.

Policy clarity and stability are emerging as the most important factor, cited by 56% of respondents, alongside access to enabling infrastructure and affordable clean energy, the report points out.

Further, without strengthened policy and delivery, 22% of business leaders warn that the most significant consequence of a disorderly transition would be inflation and higher prices for consumers, highlighting the economic risks of insufficient or uncoordinated action.

“The climate transition is under way and is increasingly accelerating as the economic, resilience and supply-chain security benefits of sustainability become ever stronger. However, there is a growing cloud on the horizon as climate impacts and policy volatility drive up costs and risks for businesses,” says WBCSD president and CEO Peter Bakker.

“The real challenge is whether and when governments will act decisively through policy strengthening, certainty and coordination,” he emphasises.

Stronger, predictable and coordinated policy is needed, or the risk of a more costly and disorderly climate transition will continue to rise.

Businesses are remaining steadfast in their sustainability efforts because they see it as essential to managing and avoiding the associated risks.

“As the focus on energy security rises, we’re seeing cost reductions in low-carbon technologies driving further demand. The next phase of the climate transition depends on replicating those conditions in the harder-to-abate sectors,” says Bain & Company partner Henning Huenteler.

“This year's barometer reveals disciplined selectivity in transition investments, not retreat. Capital is available, but investors want a clear roadmap, backed by solid commercial economics and policy support,” he says.

Bain & Company contributed to the report, alongside other businesses and business initiatives.