At this year’s annual meeting of the World Economic Forum in Davos, a new and troubling fault line emerged around the climate crisis. This was no longer a debate between “believers” and “deniers,” nor a dispute over science. It marked a political and business split between two fundamentally different views of the role climate considerations should play in economic decision-making. Israeli companies that fail to recognize this split in real time are likely to pay a heavy price.
The divide is not between those who accept climate science and those who reject it but between two business approaches. On one side stands much of global business, alongside European regulators, banks, investors, and insurance companies, treating climate change as a concrete financial and operational risk. As a result, climate risk is already being integrated into capital allocation, insurance pricing, infrastructure planning, supply-chain analysis, and corporate risk management. This is not ideology; it is business practice.
On the other side, parts of the political and business discourse in the United States are signaling a retreat from binding commitments: less regulation, greater emphasis on costs and energy security, and less willingness to place climate considerations at the core of decision-making. This is not a denial of reality but its relegation to the margins.
The consequences of this split
This is where the danger lies. Many companies interpret this split as an invitation to slow down: If some markets are more permissive, perhaps it is possible to postpone action or “wait and see.” That assumption is a serious management mistake.
In practice, Davos made one thing clear: Climate risk is already being priced. Insurance companies are reducing coverage or raising premiums in exposed areas. Banks and investors are factoring physical and climate exposure into credit pricing. Multinational customers are demanding resilience and robustness across supply chains. Companies that fail to prepare are not punished through public statements but quietly – through higher costs, tougher terms, and lost business opportunities.
For Israeli companies, this split is particularly acute. They operate at the intersection of tightening European regulation, shifting US markets, and global capital that continues to raise expectations. They cannot simply “choose a side” without paying a price.
Moreover, Israel itself is already demonstrating what happens when climate risk remains theoretical: floods that disrupt operations, heat waves that strain electricity infrastructure, and disruptions that increase costs and threaten operational continuity.
Politicizing climate action
In this environment, the most dangerous response is to politicize climate action. Companies that frame environmental, social, and governance (ESG) activity as a value statement, a passing trend, or a political position miss the point entirely. The climate does not “calm down” when political messages change. It continues to affect insurance, financing, and operations.
The trap is clear: Either companies adopt soothing rhetoric based on the assumption that regulation will soften, or they cling to symbolic commitments instead of building real management capability. In both cases, the cost comes too late to avoid.
The smarter alternative begins by removing climate from the political arena and placing it squarely in the boardroom. Climate is a business risk – full stop. From there, companies must focus on real exposure analysis, alignment with global business standards, and communication flexibility: one management strategy, expressed in different languages for different markets.
The message from Davos was unmistakable. The political split is real, but it does not make life easier for companies. On the contrary, it increases the risk for those who confuse political noise with responsible management. Companies that ignore the warning signs, or try to “thread the needle,” may discover that the climate did not wait for them – and neither did the markets.
The author is CEO of Good Vision, a corporate responsibility consultancy within the Fahn Kanne Group, and author of the book Corporate Responsibility 2.0.