Climate change, a relentless and escalating global crisis, is profoundly reshaping the fabric of corporate strategies and decision-making processes. Beyond the commonly discussed impacts on supply chains and asset valuations, a new dimension is emerging: the way companies select and manage their business partners. Recent research sheds light on a subtle yet significant transformation in how firms approach customer relationships, driven by the imperative to mitigate climate risks and enhance resilience.
Research grounded in nearly two decades of data from thousands of U.S.-listed enterprises reveals a decisive strategic pivot. Companies facing elevated climate-related risks are consciously diversifying their customer bases. Rather than concentrating revenue among a small number of major clients—a practice traditionally favored for stability and efficiency—they are deliberately broadening their customer portfolios. This shift, researchers argue, is not coincidental but a calculated response to the vulnerabilities introduced by climate hazards.
The study, published in the prestigious journal Business Strategy and the Environment, meticulously analyzes correlations between corporate exposure to climate risks and customer revenue concentration. It identifies a clear causative trend: firms that endure high exposure to extreme weather events, regulatory changes related to climate policy, or broader environmental disruptions are increasingly disincentivized from depending heavily on a handful of substantial buyers. Instead, they opt to spread sales more evenly among a wider spectrum of customers as a buffer against systemic shocks.
Particularly telling is the observed variance among firms distinguished by their levels of corporate social responsibility (CSR) performance, innovation intensity, and asset-heavy business models. These companies appear acutely aware that relying on a concentrated customer base can magnify the adverse impacts of climate events. Their sophisticated approach acknowledges that simultaneous climate shocks affecting both supplier and customer networks can create cascading vulnerabilities, exposing firms to amplified operational and financial risks.
Dr. Eric Boahen, Cluster Lead for Accounting, Finance, and Economics at the University of East London, emphasizes that climate risk has moved from an abstract future concern to an immediate strategic challenge. “Boards and executives are recalibrating their revenue dependencies, recognizing that customer concentration can be a latent risk factor magnified by climate-related disruptions,” he explains. Such insights underscore a paradigm shift: risk management now encompasses the intricate web of commercial relationships, beyond technological fixes or emissions targets.
The rigor of the study derives from an extensive empirical dataset encompassing nearly 4,800 firms over 17 years, lending robust credibility to its conclusions. This temporal and quantitative breadth enables a granular understanding of behavioral adaptations as firms confront the mounting reality of climate change impacts. The findings thus reflect not theoretical projections but real-world adaptations embedded in corporate strategy and risk management frameworks.
Implications for investors and financial institutions are profound. Customer concentration emerges as a critical yet often overlooked variable in climate risk assessments. Entities with diversified client portfolios may exhibit greater resilience to earnings volatility and are less susceptible to financing constraints triggered by climatic disruptions. This nuanced understanding equips capital allocators with refined tools to evaluate firms’ preparedness and robustness in an unstable environmental landscape.
For boards of directors and regulatory bodies, the research highlights governance considerations that extend beyond conventional environmental metrics. Persistent customer concentration in regions vulnerable to climate change may signify structural weaknesses in firms’ risk management architectures. Addressing this blind spot could become a focal point for enhancing corporate resilience and protecting stakeholder value in an era marked by increasing climatic uncertainty.
The study’s revelations challenge conventional wisdom that has historically prioritized efficiency and scale economies in customer relationships. Instead, a shift toward resilience and adaptability surfaces, framed by environmental exigencies. Firms are proactively incorporating climate risk vectors into their strategic calculus, acknowledging that the structure of commercial dependencies is as vital as operational or emissions-related factors.
Dr. Boahen articulates a critical takeaway: climate resilience transcends geographic asset positioning or carbon footprint metrics. It fundamentally encompasses the exposure embedded in a company’s network of commercial relationships. Customer concentration is now a lens through which climate vulnerability must be analyzed, offering a comprehensive vista of strategic risk and resilience.
This pioneering research, authored by Thi Thuy Trang Nguyen, Dr. Eric Boahen, and Dr. Cuong Nguyen, offers a timely and rigorous contribution to the intersection of environmental science, business strategy, and economic resilience. As climate change accelerates, these insights provide a roadmap for firms seeking sustainable growth while navigating an increasingly volatile global market.
Ultimately, this work underscores the intimate link between environmental risk factors and the structural dynamics of business ecosystems. By integrating these dimensions into broader strategic frameworks, companies can fortify themselves against the cascading shocks of climate variability, ensuring not only survival but competitive advantage in a climate-challenged future.
Subject of Research: Not applicable
Article Title: Climate Change Risks and Customer Concentration: Evidence From US-Listed Firms
News Publication Date: 9-Jan-2026
Web References: 10.1002/bse.70495
References: Climate Change Risks and Customer Concentration: Evidence from US-Listed Firms by Thi Thuy Trang Nguyen, Dr. Eric Boahen and Dr. Cuong Nguyen published in Business Strategy and the Environment
Image Credits: Not provided
Keywords: climate change, customer concentration, corporate strategy, climate risk, risk management, supply chain resilience, corporate social responsibility, innovation, financial risk, business ecosystems, environmental disruption, economic resilience
