As if the usual combination of political arguments, economic uncertainty and geopolitical crises wasn’t enough, much of the continent has spent the last year dealing with an extraordinary spate of extreme temperatures, droughts, wildfires, storms and floods. This has even included countries like the UK and Sweden, which had been less vulnerable to extreme weather in recent years.
While certain voices continue to rally against climate change, there’s a growing realisation for many that countries will need to adapt to changing temperatures and extreme weather, and do so quickly. For businesses in Europe, this poses a range of challenges: from supply chains, to protecting physical premises, to whether they may have to change the countries they are based in altogether.
Where the wildfires are
While fires have been raging through much of the summer, the worst of them seem to have happened in July and August. Multiple major fires have swept through popular tourist regions in France, Greece, Croatia, Spain and Germany, forcing evacuations during the busiest part of the holiday season. Thousands of people have been displaced, with homes and businesses being damaged and destroyed, and around 20 deaths being reported.
The immediate human cost is obviously the most important consideration. But there is an increasingly significant economic question alongside it. Amidst a seemingly endless economic crisis, and concerns about the long-term viability of AI investments, climate change is costing countries billions in lost economic output, property and environmental damage, and firefighting resources.
Related article: Guide to doing business in Europe
What a changing climate means for European businesses will vary considerably depending on where a business operates, and what it does. For some, it’s a genuinely existential threat, while for others it might be manageable with enough investment, or even present opportunities. What’s clear is that adaptation is going to become an increasingly important part of running almost any company in Europe—and indeed anywhere else in the world.
Why European summers are becoming a struggle
Europe is warming faster than any other continent, and the consequences are becoming harder to dismiss as occasional bad weather. Heatwaves, floods and droughts are all becoming more frequent and severe, with extreme weather events causing around €738 billion in economic losses between 1980 and 2023. Less than a third of non-human losses were insured, making it difficult for individuals and businesses to recover.
The problem for businesses is that these events rarely just affect one part of the economy. Recent wildfires in tourist regions have closed hotels, damaged roads, and interrupted electricity supplies. The very possibility of wildfires is likely to discourage more and more tourists from visiting entire regions. Droughts meanwhile can reduce agricultural production, increase food prices, and put pressure on businesses that depend on farming, while heatwaves inevitably reduce productivity, and impact on outdoor work.
This year's fires demonstrate how quickly these effects can spread. France has had to provide financial assistance to areas affected by wildfires, while Greece, Croatia and Spain have all faced significant disruption to tourism during what should be their peak season. It’s hard to see this as anything but the opening salvo of an increasingly hotter future—and a warning to businesses to find a way to mitigate it.
The industries feeling the heat
There are a few obvious victims of rising temperatures. For agriculture, for instance, this year's conditions have been particularly punishing. France’s maize harvest is expected to be around 35% lower than in 2025, while Italy has seen around 60% of farmland affected by drought, with losses to crops like rice, maize and soya estimated at more than €3 billion.
Perhaps more pertinently for expats, wine is also running dry. Spain is expecting a significant fall in wine production. Champagne's 2026 harvest began on 12th August, the earliest official start on record, after heat and drought accelerated grape ripening. More than just pushing the dates forward, producers are concerned that higher temperatures are reducing the grapes’ acidity, and changing the characteristics that make champagne, well, champagne.
Tourism also faces an interesting dilemma. For some, this could prove existential: ski resorts might be slightly less appealing if there isn’t any snow. For others, it might see a shifting of the traditional holiday season. While schools are bound to strict summer holidays for now, people without children may increasingly look to holiday off-season, and visit traditional destinations in cooler periods. For those already in hot countries, meanwhile, cooler climates might offer a bit of welcome relief.
Looking on the bright side
None of this is without its opportunities. The warming climate may be a net negative, but it’s been a serious boon for British wine businesses. The UK has seen a rapid expansion in vineyards, particularly in southern England, with 2025 producing the earliest and ripest grape harvest ever recorded in the British Isles. Champagne producers have already invested in southern England, where the combination of chalky soils and a warming climate has created increasingly attractive conditions for sparkling wine in particular.
It isn’t just wine producers in England who could be celebrating. New opportunities could be as basic as an HVAC company or insurance provider, to businesses creating irrigation and water-management technology, or materials and systems designed to resist extreme temperatures, and protect people or wildlife. The European Environment Agency's research into climate-resilient agriculture has already spotlighted this, pointing to opportunities in technologies and farming practices that can make production more resilient and make Europe more self-sufficient.
Related article: The best country to start a business in Europe
As hinted at above, tourism could also adapt. Businesses may see a better distribution of holidaymakers across the year, rather than the usual massive spike in the summer. Cooler destinations (and those benefitting from more desirable temperatures) could also see increased tourist numbers, from the UK and Ireland to areas such as Scandinavia and the Baltic nations.
Despite this, few will be welcoming extreme temperatures as a boon to business. The reality is that even those areas where there could be some benefits will also see costs. Countries that traditionally haven’t seen high temperatures are struggling with the sudden need to adapt infrastructure, and roll out heat pumps and air conditioning. Tourist infrastructure may also take years to upgrade, with the UK in particular already struggling for airport capacity.
Emerging from adaptation
For most businesses, it seems like now is the time for contingency planning. While not everyone has to worry about wildfires, the widespread disruption caused by high temperatures and extreme weather is likely to have knock-on effects in even unexpected areas. Logistics is an obvious example, but it could also affect the availability of certain resources, demand for certain products or services, or the safety and productivity of your workplace.
In the workplace, that could mean a number of changes. Businesses might have to look at installing better cooling systems, improving drainage, or protecting buildings from flooding and fires. Hosting your own servers might become less economical, while you might even have to review your insurance arrangements, and have a plan for staff to either work from home, or work from a backup workplace recovery facility.
There’s also a case for businesses to collaborate. Take tourism: everyone in a region is competing to some extent, but you also have a shared interest in maintaining infrastructure like roads, water supplies, and emergency services, as well as the attractiveness of the area and the availability of certain facilities for visitors. While some of that is down to local and national government, businesses can help to fundraise, increase awareness of climate issues, and help to create resources and fund projects that help tourists beat the heat.
One of the biggest mistakes businesses could make is treating climate change as a uniform problem. Different parts of Europe will face different dilemmas when it comes to climate change, and at different points. Southern Europe could face more severe droughts and heat risks, while northern Europe might see more combinations of warming, flooding and changes in rainfall.
All of this means businesses need to look at their own circumstances, rather than relying on broad predictions about what climate change will mean. For some, that might mean building more resilience, while for others it could create new opportunities. What’s certain is that businesses in Europe aren’t going anywhere, and innovation isn’t either.
