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Climate adaptation 2025 report

Marsh’s Climate Adaptation Survey can help businesses prepare for the changes and challenges ahead. Explore key findings and takeaways from the 2025 survey.

19/09/2025 · 4 minute read

Marsh’s Climate Adaptation Survey can help businesses prepare for the changes and challenges ahead.

Explore key findings and takeaways from the 2025 survey.

From climate risk management to climate risk action, businesses are increasingly viewing climate adaptation as a vital element of their resilience efforts.

Marsh’s Climate Adaptation Survey was conducted in a landscape of increasing extreme weather-related events, regulatory changes, and rising costs due to climate-related risks. And at a time when decisions related to balancing immediate costs against longer-term resilience planning needs are undergoing intense scrutiny.

Are businesses really rising to the adaptation challenge? Encouragingly, 78% of surveyed organisations are assessing their future climate risks. And yet, over 50% of businesses are not using cost-benefit analysis to make the business case for adaptation investments. This gap shows that quantitative approaches do not have to hinder incremental adaptation efforts. At the same time, organisations have the opportunity to better quantify the value of resilience measures and integrate them into strategic decision-making.

Our global survey offers insights into how adaptation is viewed by private sector organisations, particularly through the lens of risk managers. By unpacking adaptation from this vantage point, these results provide a nuanced understanding of the challenges, priorities, and opportunities that define the path toward a more resilient climate future.

Key takeaways

  1. Assessing the impacts of chronic perils is becoming more of a priority
    More respondents identified heat and water stress (chronic) perils than any other as part of their physical risk assessments, with only flooding ranking higher. 
  2. Most businesses are not using cost-benefit analysis to make the business case for adaptation
    More than half of respondents who believe they have sufficient funding to carry out adaptation projects do not conduct a cost-benefit analysis before they start implementing projects.
  3. Organisations are strengthening their resilience with business continuity management and engineering measures
    More than half of respondents have already implemented or are planning to implement business continuity management or engineering measures. Additionally, these are the areas they identified as most in need of support and guidance.
  4. Access to insurance is not yet driving investments in adaptation​
    Only 5% of respondents noted "access to insurance" as their primary motivation for investing in adaptation, compared to 53% who prioritised "the need to manage risk."

Findings in detail for business leaders and risk managers

Organisations are experiencing the effects of severe weather patterns around the world, from wildfires in North America to floods in Europe and tropical storms in Asia. These events are not only disruptive but also financially consequential.

The survey found that the highest proportions of respondents impacted by extreme weather over the past three years are based in Asia (73%), India, the Middle East, and Africa (68%), and Canada (67%). This regional variability underscores the importance of localised risk assessments and tailored resilience strategies.

According to the survey, 74% of respondents have experienced losses or disruptions to their physical assets due to extreme weather. In addition to physical risks, the survey highlights that these events are increasingly impacting operational and personal safety, with 67% of respondents reporting disruptions or losses related to operations and people.

Importantly, the findings highlight that climate hazards pose risks that extend beyond asset-level concerns. System-wide impacts are also significant, though at lower levels — 35% of organisations reported impacts on their customers, 32% on critical infrastructure, and 21% on resources and ecosystem services.

Given the broad and interconnected nature of climate-related threats, it is no surprise that the financial toll of natural catastrophes continues to escalate. By the end of 2024, global insured catastrophe losses —  an understatement of the true magnitude of losses incurred — exceeded US$100 billion for the fifth consecutive year. In 2025, natural catastrophe insurance losses are already on track to exceed this figure.

These trends highlight the urgent need for organisations to take a holistic approach to understand how they have been impacted by losses from extreme weather events so that they can better prepare, respond, and allocate resources. 

There is a notable gap in the depth of climate risk analysis. Although 75% of respondents say their organisation 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 organisations 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, organisations 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 organisations to prioritise resilience and adaptation investments, develop comprehensive contingency plans, and better understand the interconnected nature of these risks.

The survey reveals that respondents are primarily focused on operational (45%) and financial (30%) measures to bolster their resilience against changes to come. Notably, over half of the participants have already implemented or are planning to adopt business continuity management (BCM) strategies and engineering interventions, underscoring their recognition of these areas as critical to maintaining stability and mitigating disruptions. Additionally, 25% said they are implementing strategic measures, such as changing products or services.

In terms of governance, responsibility for climate adaptation appears to be distributed unevenly. While 54% of respondents identify the sustainability officer as the primary individual accountable for climate-related initiatives, only 28% assign this responsibility to the chief risk officer or head of risk. This distribution may indicate that climate adaptation is still viewed through a sustainability lens rather than as a risk management issue. Integrating climate risk into broader enterprise risk management frameworks could enhance strategic coherence and accountability, ensuring that climate adaptation considerations are embedded across all levels of decision-making.

Looking ahead, 28% of respondents expect their climate adaptation investments to increase within the next one to three years, while 20% anticipate such investments to rise over the next three to five years. This timeframe reflects a growing sense of urgency to address climate-related risks, aligning with broader industry trends and the findings of the Global Risks Report 2025, which identified extreme weather events as immediate, short-term, and long-term threats. However, it is noteworthy that a substantial proportion (22%) do not expect any increase in their climate adaptation spending. This divergence suggests varying levels of prioritisation and resource allocation across organisations, potentially influenced by differing risk perceptions, regulatory pressures, or financial constraints.

While many organisations recognise the importance of climate adaptation, other business priorities often compete for limited resources. The majority of respondents (60%) believe their organisation has appropriate levels of funding dedicated to climate adaptation efforts. Interestingly, performing a cost-benefit analysis does not appear to be a significant barrier for investment; over 50% of those with dedicated funding do not routinely conduct such analyses. This may indicate a pragmatic approach where organisations are willing to allocate resources based on an innate understanding of the risk rather than detailed economic evaluations.

However, a significant portion of respondents (40%) feel their organisation lacks sufficient funding for effective climate adaptation. The challenges cited include the tendency for other business priorities to overshadow climate initiatives, a lack of knowledge and understanding about future climate scenarios, and competing interests for limited resources. This highlights a potential gap in understanding the full scope and benefits of climate adaptation — for instance, every US$1 invested in resilience and preparedness saves US$13 in long-term savings and avoided costs — ​as well as the challenge of balancing climate-related investments with immediate operational demands.

The top three areas where additional support is needed were found to be asset engineering, business continuity management (BCM), and the development of early-warning systems. Engineering measures and BCM are also the areas most actively being implemented or planned for implementation, reflecting a clear strategic emphasis on operational resilience and risk mitigation.

There is a potential disconnect: while 75% of organisations are assessing future climate impacts, primarily from a risk perspective, many have yet to fully recognise climate adaptation as an investment opportunity to enhance their overall enterprise risk management, with 40% of respondents indicating that current funding for climate adaptation is not appropriate. Due to the generally widespread consensus on the critical importance of climate mitigation, such efforts have historically received greater focus, making it somewhat more challenging to secure dedicated attention and investment in adaptation. Fortunately, a range of policy options, risk financing solutions, and resilience planning strategies are available to help risk managers bridge this gap.

The survey shows that motivation for climate adaptation among respondents is largely driven by internal and stakeholder pressures rather than insurance considerations. Approximately 75% of respondents report limited or no concern about the unavailability or unaffordability of insurance at present, suggesting that insurance access is not a primary driver for their adaptation efforts. In fact, on average, only 5% of respondents identified access to insurance as their main motivation for investing in climate resilience and only 10% do not perceive a significant demand for adaptation from their insurers.

Although access to insurance is not the primary driver of adaptation demand, the need to manage risk is the most referenced motivation for investing in climate adaptation, selected by 53% of respondents. This motivation likely reflects a growing recognition that climate change presents systemic risks to companies, necessitating strategic adaptation to protect assets, maintain revenue streams, and enhance resilience.

Beyond risk management, organisations are motivated by the imperative to safeguard their operations, reputation, and compliance standing, with a recognition of the potential for competitive advantage (17%) and regulatory pressures (13%) cited as drivers for greater investment in climate adaptation. Aligning insurance solutions with these broader motivations can help enhance risk transfer mechanisms, supporting organisations in achieving their resilience objectives.

Our people

Bruno Dotti

Bruno Dotti

Climate & Sustainability and Enterprise Risk Services Advisory Leader, Europe

  • Italy

Callum Ellis

Callum Ellis

Director, Head of Climate Resilience, Marsh UK

  • United Kingdom

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Nick Faull

Head of Climate & Sustainability Risk, Marsh

  • United Kingdom

Dr. Graeme Riddell

Dr. Graeme Riddell

Climate & Sustainability Advisory Leader, Asia and Pacific, and Climate Centre of Excellence Co-Leader

  • Singapore

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Rodrigo Suárez

Climate & Sustainability Advisory Leader, Latin America and Caribbean