Corporate Climate Adaptation Disclosures: Components and Priorities

The climate crisis poses an existential threat to business and industry activities. Despite global climate disclosure standards like Global Reporting Initiative (GRI), IFRS S2 Climate-related disclosures and European Sustainability Reporting Standards (ESRS), corporations continue to struggle to identify and prioritize their climate adaptation measures and efforts, due to the limitations of adaptation-related items in the current ESG and sustainability disclosure framework. To address this challenge, we developed a novel Corporate Climate Adaptation-related Disclosure Framework, consisting of two overarching dimensions – Corporate Climate Vulnerability (CCV) and Corporate Climate Adaptive Capacity (CCAC) – and four mid-level components – Exposure, Sensitivity, Readiness and Responsiveness via Living Lab approach. Then, we examine the perceptions and priorities of the framework components among 30 ESG practitioners from South Korean corporations via Analytic Hierarchy Process (AHP). Our initial findings indicate the importance of physical/transition risks, infrastructure sensitivity, adaptation strategy, governance etc. We expect our findings to contribute to corporate practice by guiding companies to prioritize resource allocation to strengthen climate resilience, while simultaneously offering investors a robust model to assess financial stability and business continuity under climate-related risk. Furthermore, this research provides empirical evidence for policymakers, including Korea Sustainability Standards Board (KSSB), to further develop climate adaptation-related items or guidelines. Ultimately, this study aims to contribute to the global sustainability landscape by materializing the abstract concept of corporate climate adaptation into a concrete, data-driven management framework that enhances corporate transparency and risk management.