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Six insights on adaptation and resilience from London Climate Action Week

The message from London Climate Action Week 2026 was clear: the business case for adaptation and resilience has never been stronger.

02/07/2026

As part of London Climate Action Week 2026 we hosted roundtables and workshops with clients and partner organisations to test solutions and discuss implementation challenges. The message was clear: the business case for adaptation and resilience has never been stronger, and climate change is no longer just a physical risk but a threat to financial stability.

Still, important questions remain, including the need for a common language around resilience, better and more forward-looking approaches to measuring climate risk and adaptation measures, and whether insurers can move beyond the traditional one-year cycles given the long-term nature of some of the solutions sought. Below are six key takeaways from the sessions with actions that can be taken.

1. Climate change is emerging as a financial stability risk

Physical climate risks are already driving material costs through asset damage, business interruption, supply chain disruption, and pressure on public finances. When insurance for climate risk becomes more expensive, more limited, or unavailable altogether, the effects ripple into lending, investment, asset valuations, and public finances. In turn, this can weaken bankability and investability across the economy. As highlighted in TheCityUK and Marsh report, Mind the protection gap: The Risk to Capital Markets and the Resilience Financing Imperative, insurability is a critical transmission channel linking climate risk to the wider economy. 

Yet, investors are still at an early stage in assessing and responding to climate risk, particularly in real estate and infrastructure portfolios. Affordable insurance has long been taken for granted — for example, a mortgage or lending product is extended on the assumption that the underlying asset will remain insurable. But as climate impacts become more acute, that assumption is becoming harder to sustain.

What action can be taken?

Understand how climate interacts with the insurance ecosystem: Tools such as Marsh’s Insurance Enabler Framework can be used to understand the structural and cyclical forces behind insurance pricing. This helps identify where resilience measures can improve risk outcomes and where pricing pressure may point to deeper vulnerabilities.

2. Investment in resilience needs greater recognition in insurance pricing

One important challenge – difficult, but solvable – is the lack of a consistent mechanism for insurers to recognise and reward documented climate risk reduction. Without financial recognition, it can be difficult to justify investments in corporate boardrooms, where competing priorities are already plentiful.

The Marsh Carlyle insurance-centric Investing in Resilience Framework is designed to help translate documented resilience investments into insurer-recognised risk reduction and potential insurance benefits. It reframes insurance not as post-loss recovery, but as an important signal that can encourage proactive resilience investment.

Too often, resilience is framed only in terms of avoided loss or avoided cost. But to capture the attention of investors, lenders, and asset owners, it also needs to be expressed in positive financial terms — to protect value, support continuity, and strengthen long-term performance. That is why better ways of linking resilience and climate risk mitigation to return on investment (ROI) are so important.

What action can be taken?

Engage brokers early, not after decisions have already been made: Insurers and brokers bring deep climate risk insight, practical engineering expertise, and lessons learned from prior losses. Involving them from the outset — whether in asset design, lending, public-private finance, or resilience planning — can lead to better risk outcomes, clearer pricing signals, and more effective resilience investment.

3. A common language for resilience is vital

A shared language for turning climate and resilience information into decision-useful tools is still missing, along with trusted ways to verify resilience at scale. Data needs to be translated into financial metrics that can ultimately be used in capital allocation decisions.

Claims data, scenario analysis, and physical risk models already exist, but they are often fragmented, inconsistent, and difficult to compare across geographies and asset classes. As a result, the same risk is frequently viewed through different lenses by insurers, banks, asset owners, and policymakers, sometimes creating friction rather than alignment.

What action can be taken?

Combine data with judgement and engagement: Data is essential for stress-testing assumptions and mapping exposure to climate risk, but it is not enough on its own. It must be paired with direct engagement with asset owners, companies, and decision-makers. Coordination and communication between these groups is essential.

4. System-level climate risks remain underestimated

Organisations need to think more deeply about how climate risks interact across the system, rather than focusing on physical damage to individual sites or assets, as highlighted in Marsh’s report, Addressing the system-level resilience gap. Urban and industrial areas are where people, assets, and critical infrastructure are concentrated, and where climate-related disruptions are felt most acutely. Once a heatwave, flood, drought, or wildfire reaches an urban environment, it rarely remains a purely local physical hazard. 

System-level risks include supply chain disruptions, transport failures that prevent workers from reaching their jobs, and hidden exposures in regions where a company has limited direct business, but where broader market shocks could still have material consequences. 

What action can be taken?

Apply a system-level lens to risks: Use tools such as the checklists included in Marsh’s report, Addressing the system-level resilience gap which are designed to be actionable for risk managers and other risk owners within organisations to help identify system dependencies, assess materiality, manage risk down, and transfer residual risk away where possible. Also test operational resilience, not just physical resilience: Look beyond structural hardening alone. Ask practical questions such as: Do we have business continuity plans? Are emergency response plans in place? How quickly can the business recover after an event?

5. Insurance is key to signalling climate risk, but longer-term solutions are needed

Insurance can act as an economic signal of changing risk through pricing, terms, and underwriting appetite — although the climate signal is not always clean and can be muted by market-cycle dynamics. In that context, emerging insurability concerns are often best understood as a symptom of rising underlying risk and growing loss volatility, with wider consequences for lending, investment decisions, and asset values.

But one challenge raised was the mismatch between insurance’s typical one-year policy cycle and the much longer time horizons of the financial decisions it supports, including mortgages, lending, and long-term corporate investment. While insurance underpins asset investability, unlike a bank relationship that may last 25 to 30 years, an insurer can choose not to renew at the end of the policy term. Insurers usually want to renew and continue underwriting risk, but the tension between short-term policy cycles and long-term financial planning — especially when it comes to climate risk — is real.

What action can be taken?

Work with brokers and insurers to create longer-term partnerships: Longer-term partnerships between insurers and insureds can help address the challenge posed by the annual insurance cycle by creating commercial incentives for insurers to build in stronger rewards and more meaningful incentives for resilience.

6. Building resilience requires a broad coalition of capital

The question of who pays for resilience is both urgent and ongoing. The sums involved are vast, and closing the resilience gap will require more than public funding alone. In the UK, for example, the investment needed to strengthen resilience nationwide has been estimated at around £11 billion per year.

Insurers are not the sole funders of resilience, but they can play a meaningful enabling role — through risk engineering, data and analytics, underwriting incentives, and structures that help direct capital towards risk reduction and adaptation. But as climate risk grows and the funding shortfall becomes clearer, private capital will inevitably need to play a larger role in supporting adaptation.

That raises the question of whether adaptation can become an investable class in its own right. Resilience bonds are one example of structures being explored to link risk reduction with financing outcomes, helping to align public objectives, private investment, and risk-transfer capacity. For example, Guy Carpenter has supported the placement of resilience-bond structures (including work with the North Carolina Insurance Underwriters Association (NCIUA)) to help connect resilience investment with risk-financing outcomes.

At the state level, risk pools can support broader resilience goals, as demonstrated by Flood Re in the UK. But as the impacts of climate change become progressively system-wide, resilience cannot be managed by individual sectors alone and will require multi-stakeholder buy-in. The most effective approach will likely blend public funding, alternative capital, private investment, and traditional insurance capital to create a more resilient and financially robust system.

What action can be taken?

Frame resilience as value protection and investment support: The goal is not only to reduce loss, but also to protect long-term value, support continuity, and create the conditions for resilience to scale. Embed climate risk considerations across the asset lifecycle, including due diligence, asset management, refinancing, and exit planning — it should not be treated as a standalone exercise.

Contact us to discuss climate risk mitigation and resilience measures for your organisation.