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High-impact operationalization –
Putting climate adaptation strategy
into practice

Your challenge

Translating adaptation strategy into action remains a complex task for many financial institutions. Despite growing awareness, operationalization often lacks clarity, consistency and ownership.

Key challenges include recognizing the complexity of climate change and adaptation for specific internal stakeholders and how the topic connects with their roles and responsibilities; identifying and implementing effective adaptation measures, such as by providing appropriate incentives to counterparties; and monitoring implemented measures.

Without a clear operating model inspired by the defined strategic adaptation ambitions, institutions risk treating adaptation as a standalone effort, rather than a lever for long-term value creation.

EY’s perspective

To put a climate adaptation strategy into practice, financial institutions should embed it across key operational actions, drawing inspiration from the evolving regulatory environment while leveraging broader operational levers.

Although regulatory frameworks such as the EU Taxonomy and FINMA Circular 2026/1 offer valuable guidance on integrating adaptation into lending, product design, stakeholder advisory and reporting methodologies, institutions can go further by implementing mechanisms that incentivize adaptation actions among clients, investees and policyholders.

In a nutshell, an effective implementation approach works best by adopting a three-phase structure: first start by conducting a risk assessment, then define a corresponding adaptation strategy and thirdly translate it into a concrete action plan. Underpinned by updated targets, policies and governance structures, this multi-layered approach can ensure alignment with other internal strategic objectives, with the added benefit of mirroring the disclosure structure required under the CSRD for each material ESG topic.

Embedding adaptation into core business processes – supported by tools, technologies and employee engagement – organizations ensure that measures are not relegated to isolated initiatives but rather contribute to long-term resilience, strategic value creation and transparent climate reporting.

Shifting beyond compliance to a strategic approach, leveraging risk analysis and embedding adaptation into existing processes offers a major competitive advantage.

Tetiana Moens, Manager, Climate Change and Sustainability Services, EY Switzerland

Our recommendations

Design a target operating model to implement the defined adaptation strategy.
Leverage technologies and tools to enhance operational effectiveness.
Implement adaptation measures following the CSRD staged narrative – starting from the materiality assessment of adaptation, then integrating it into the overall strategy and culminating in the design and execution of concrete actions.

Examples of climate adaptation across financial institutions