Climate adaptation 2025 report

There is a notable gap in the depth of climate risk analysis. Although 75% of respondents say their organization is assessing future climate impacts, fewer than half (38%) conduct assessments beyond a qualitative level. Almost a quarter (22%) of respondents report not assessing future climate impacts at all. The primary barriers cited include a lack of comprehensive data, over-reliance on catastrophe models that primarily focus on current or historical data, and dependence on business continuity plans that may not fully account for evolving climate risks.

Furthermore, the scope of climate assessments is somewhat limited. Most concentrate on physical assets (85%) and operations and people (66%), which are important components. However, many organizations are underestimating or overlooking system-level risks - such as critical infrastructure dependencies (45%) and supplier vulnerabilities (43%) - that can significantly magnify the impact of climate events.

Physical climate risk is exacerbating both acute and chronic threats. The peril referenced most commonly as a concern is flooding, followed by heat stress and water stress, although these sentiments noticeably diverged among regions.

By assessing both acute and chronic climate perils, organizations can more effectively anticipate the potential impacts of climate-related events. For example, multi-peril risk models that incorporate both acute and chronic hazards can enable organizations to prioritize resilience and adaptation investments, develop comprehensive contingency plans, and better understand the interconnected nature of these risks.