The true magnitude of climate change is no longer abstract, distant, or drowned. But, a lived reality. The European Union’s annual report by the Copernicus Climate Change Service underscores this stark reality. Released in January 2026, the report touches on the state of the global climate, records 2025 as the third-warmest year on record globally and in Europe. In addition, it records the 2023-2025 period as the first three-year average exceeding 1.5°C above pre-industrial levels.
Temperature Records
As per the report, the global temperatures in 2025 ranked third-highest on record, just 0.01°C below 2023 and 0.13°C below the warmest year, 2024. Europe saw its third-warmest year at 10.41°C average, 1.17°C above the 1991-2020 baseline, warming faster than the global average of 0.59°C above that period.
Land air temperatures hit the second-highest on record, with Antarctica’s warmest year and the Arctic’s second-warmest. Projections now warn that current trajectories could breach the 1.5°C long-term limit by the decade’s end, a decade ahead of 2015 forecasts.
These findings are not a prediction or a projection—they are an autopsy of a year in which Earth’s life-support systems entered a perilous new phase.
Risk landscape
Corporates face mounting risks from these trends. The EU’s emissions dropped 2.5% from 2023 levels. The sharpest in decades, yet trailing the pace needed for 55% reductions by 2030. Supply chains grapple with weather volatility, while regulations like the CSRD and CBAM impose steeper compliance costs on non-resilient firms. Sectors such as energy and agriculture report €12 billion in annual losses from extremes, per recent EEA data. This forced the investors and insurers to demand climate stress-testing.
The EU advances toward 2050 net-zero with renewable capacity surging 24% in 2025. But scaling storage and grids remains critical. Businesses can capitalize via green bonds (€500 billion issued last year) and carbon markets, targeting the €100/tonne price needed for Paris alignment.
The upcoming 2026 European Climate Resilience Framework signals investment in adaptation tech, from AI-driven forecasting to resilient infrastructure, offering first-mover advantages.
However, investors must prioritize climate-resilient strategies, such as accelerating renewable transitions, to mitigate overshoot risks flagged in UNEP’s 2025 Emissions Gap Report.
