The complex interplay between the drivers of dam failure and climate change factors constitutes a central focus of this study. Variations in temperature and precipitation patterns have profound effects on dam storage volume, quality, and structural stability. This research serves two purposes. First, it employs the Wroclaw Taxonomic Method (WTM) to construct a comprehensive indicator called the Index of Sustainable Dams (ISD). The King Talal Dam (KTD) was chosen as a case study using data spanning from 2011 to 2022, encompassing 14 variables. Second, the Granger Causality Test (GCT) is applied to examine the causal connections between the ISD, climate change, and dam failure. The research provides an in-depth evaluation of the KTD in terms of the ISD and its three critical dimensions: environmental, economic, and social. It also reveals substantial bidirectional causality relationships between the ISD, climate change (as measured by mean maximum and minimum temperature and mean annual precipitation), and dam failure (as measured by dam age, sediment yield, and storage). The analysis confirms a strong interdependence among the drivers of climate change, dam failure, and dam sustainability. Moreover, combining the WTM and the GCT is efficient for assessing the sustainability of various dam types.