Climate change: From risk to resilience

For decades, Bangladeshi businesses have demonstrated extraordinary resilience. They have overcome political uncertainty, global financial shocks, the Covid-19 pandemic, supply chain disruptions and natural disasters. Every crisis has tested the entrepreneurial spirit, and every time businesses have found a way forward. Yet today, a new challenge is emerging that may reshape the country’s economic future more than any previous crisis: climate change. Unlike past shocks, it is slower, deeper and potentially more disruptive. The question is no longer whether climate change will affect businesses, but which businesses will be prepared and which will be left behind.

Since early 2026, global geopolitical tensions have disrupted energy supplies, causing electricity shortages and prolonged load-shedding in many parts of Bangladesh. Industrial production slowed, factories struggled to meet export deadlines, and the country’s vital ready-made garment sector faced operational disruptions. At the same time, record-breaking heatwaves pushed workplace temperatures to dangerous levels, reducing productivity and increasing health-related absences.

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According to the World Bank, Bangladesh’s maximum temperature has risen by about 1.1°C since 1980, while the “feels-like” temperature has increased by 4.5°C. In 2024, heat-related illnesses and declining productivity caused the loss of nearly 250 million workdays, costing the economy an estimated US$1.78 billion, or around 0.4 percent of GDP. Dhaka has become one of the world’s fastest-warming cities, making urban businesses increasingly vulnerable.

A major threat is declining labour productivity. Bangladesh relies heavily on physically demanding work in manufacturing, construction, agriculture and logistics. The International Labour Organization estimates that by 2030, heat stress could reduce global working hours by more than 2 percent. For Bangladesh, this means lower production, delayed deliveries and reduced competitiveness.

Energy uncertainty is another growing challenge. Repeated power shortages interrupt manufacturing, increase dependence on costly diesel generators and reduce industrial efficiency. Businesses without reliable energy supplies risk losing export orders as global buyers increasingly demand dependable production with lower carbon footprints.

Floods, cyclones, excessive rainfall and extreme temperatures are also disrupting transport and logistics. Delayed raw material shipments can quickly become missed export deadlines, affecting suppliers, manufacturers and exporters across the value chain.

Meanwhile, major export markets are introducing stricter environmental standards and carbon-related trade measures. Businesses that fail to reduce emissions, improve energy efficiency and adopt sustainable manufacturing risk losing access to premium markets. Research warns that climate change could put nearly $65 billion in export earnings and around one million jobs at risk by 2030 across key apparel-producing countries, including Bangladesh.

Bangladesh can turn climate risk into an opportunity by investing in renewable energy, energy-efficient manufacturing, green buildings and climate-smart technologies. Rooftop solar, battery storage, smart energy management, waste recycling and water-efficient production can lower costs while improving energy security.

Digital technologies, including artificial intelligence, automation and predictive climate analytics, can help businesses optimise energy use, forecast risks and improve efficiency. Protecting employees through better ventilation, cooling systems, flexible work schedules and healthier workplaces should also be recognised as an investment in productivity.

Financial institutions should support this transition through green financing, sustainability-linked loans and climate-risk assessment, while government investment in renewable energy, resilient infrastructure, smart urban planning and modern public transport will strengthen the business ecosystem.

The climate transition will reward businesses that invest in resilience, sustainability and innovation. Those who treat climate adaptation as an investment rather than a cost will build stronger brands, earn greater customer trust and secure lasting competitive advantage. Those who delay may find the cost of inaction far greater than the cost of preparation. Climate resilience will not merely protect success; it will define it.

The writer is a senior banker.