Companies Make Climate Adaptation Gains Amid Gaps

Marsh’s latest survey reveals that companies are making progress in preparing for climate risks, yet many still face challenges in converting those preparations into tangible resilience. Although more organizations now evaluate threats and allocate resources to mitigation, significant gaps persist between risk assessment and the development of formal strategies, particularly when linking those efforts to insurance coverage.

Nearly half of the respondents experienced losses or operational disruptions due to extreme weather over the past three years. Flooding remained the most frequently reported threat, affecting 62 percent of organizations, while heat stress impacted 36 percent, water stress 34 percent, and tropical storms 25 percent. The proportion of companies encountering multiple hazards increased to 60 percent, marking a rise from earlier periods.

In response to these challenges, 54 percent of organizations have enhanced their business continuity plans, and 40 percent have invested in physical defenses such as flood barriers. However, only 26 percent confirmed that their adaptation measures influenced negotiations with insurers. Growing concerns about coverage availability and rising costs led 62 percent of respondents to anticipate worsening insurance terms over the next five years.

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Companies are also refining their risk assessment methods. Currently, 87 percent evaluate multiple perils simultaneously, and 77 percent now integrate both qualitative and quantitative approaches—a notable increase from 52 percent in 2025. Despite these improvements, only 26 percent have implemented a formal adaptation plan, while 78 percent remain in the process of developing one.

The primary obstacle lies in translating risk data into actionable resilience measures. Marsh’s findings highlight five critical areas where organizations must focus: modeling combined hazards, assessing vulnerabilities at both asset and system levels, establishing measurable adaptation goals, documenting resilience improvements for insurers, and supporting collaboration beyond individual operations.