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Climate resilience: A guide to resilience and adaptation

Climate resilience is the ability to anticipate, prepare for, and adapt to climate risks while maintaining long-term stability. Learn how to build resilience.

05/22/2026 · 5 minute read

What is climate resilience?

Climate resilience refers to the capacity of systems, including communities, infrastructure, ecosystems, and economies, to anticipate, absorb, adapt to, and recover from the impacts of climate-related hazards. For risk managers, it is best understood not as a single action but as a continuous strategy: one that reduces exposure, strengthens adaptive capacity, and can lessen the likelihood that disruptions become catastrophes.

The concept has evolved significantly over recent decades. Early climate policy in the 1990s tended to focus on mitigation, so reducing greenhouse gas emissions to slow global warming. But as science matured and the physical impacts of a warming planet became undeniable, adaptation has entered the conversation. The landmark IPCC assessments throughout the 2000s and 2010s formalized the language of resilience, recognizing that even in optimistic emissions scenarios, a degree of climate change is already locked in. The question shifted from “can we prevent it?” to “how do we prepare for it?”

For risk professionals, this shift is consequential. Climate resilience is now a core component of enterprise risk management, regulatory frameworks, and long-term strategic planning.

Why is climate resilience important?

The financial and operational consequences of climate inaction are no longer theoretical. Extreme weather events — intensified by global warming — are becoming more frequent and severe. Floods, wildfires, heatwaves, and storms are disrupting supply chains, damaging critical infrastructure, displacing populations, and generating significant insured and uninsured losses.

From a risk management perspective, the exposure is broad. Physical risks — both acute (individual extreme events) and chronic (long-term shifts in temperature, precipitation, and sea level) — threaten asset values and business continuity.

Building climate resilience is not merely an environmental imperative; it is also a financial one. Organizations and governments that proactively invest in resilience tend to incur lower recovery costs, build stronger stakeholder confidence, and achieve more sustainable long-term performance. Those who do not may face escalating exposure with diminishing options.

How to build climate resilience

Building climate resilience requires a dual approach: mitigation, which addresses the root causes of climate change, and climate adaptation, which manages its inevitable consequences. Effective resilience planning integrates both.

The foundation of any resilience strategy is understanding what you are exposed to. This means conducting climate risk assessments across short-, medium-, and long-term time horizons. Organizations should map physical risks across assets, operations, people, and supply chains.

Infrastructure built to yesterday’s climate standards is already becoming inadequate. Resilient organizations and municipalities are retrofitting existing assets and designing new ones to withstand projected conditions, such as higher temperatures, increased precipitation, and more frequent extreme events. This includes flood-proofing critical facilities, upgrading drainage systems, and integrating green infrastructure such as urban tree canopies and permeable surfaces that naturally manage heat and water.

Water is among the most climate-sensitive resources. Resilience planning should account for both excess water (flooding) and scarcity (drought). Integrated water management strategies, including water recycling, aquifer replenishment, early warning systems, and demand reduction, are increasingly central to climate adaptation plans at both the organizational and governmental levels.

Locally led adaptation, where communities, municipalities, and regional stakeholders drive resilience planning, has demonstrated stronger uptake and more contextually appropriate outcomes. For risk managers operating across geographies, understanding local adaptation capacity is essential to accurate exposure assessment.

Resilience requires capital. Globally, adaptation finance remains significantly underfunded relative to need, particularly in vulnerable regions. Risk professionals should be familiar with the growing landscape of instruments — green bonds, resilience bonds, sovereign climate funds, and blended finance mechanisms — that are increasingly used to mobilize investment. Organizations should also consider how internal capital allocation reflects climate risk, including whether risk-adjusted returns account for physical exposures.

The five pillars of climate resilience

While frameworks vary, organizational climate resilience often includes:

  1. Awareness: Understand climate risks through data, science, and scenario modeling.
  2. Preparedness: Develop response plans, business continuity protocols, supply chain contingencies, and early warning systems.
  3. Absorption: Strengthen systems and assets so they can withstand shocks without catastrophic failure.
  4. Adaptation: Make planned adjustments to systems, operations, infrastructure, and strategies as conditions change.
  5. Transformation: Where incremental change is insufficient, pursue restructuring of business models, asset portfolios, or supply chains to align with long-term climate realities.

Marsh’s climate adaptation framework provides a holistic approach to managing physical by integrating asset-level engineering, operational continuity, and system-level, interconnected risks. It helps organizations identify vulnerabilities, implement resilience measures (like flood defenses or heat stress management), and secure financing for climate-resilient initiatives to promote long-term viability.

Benefits, challenges, and the road ahead

The benefits of climate resilience investment are well-documented: reduced disaster recovery costs, greater operational continuity, improved regulatory positioning, and stronger access to capital markets increasingly attuned to sustainability performance. Communities and organizations with robust resilience plans also tend to recover faster and more equitably following climate events.

The challenges are equally real. Achieving resilience requires long-term planning in environments that often emphasize short-term returns. Data gaps and climate model uncertainty can complicate accurate risk quantification, making it difficult for organizations to fully understand their exposure. While the costs of adaptation are generally lower than the costs of inaction, they can still pose a barrier for smaller organizations and lower-income regions.

According to the Marsh Climate adaptation report, 78% of organizations have experienced climate-related impacts, including flooding, heat and water stress, with 74% reporting losses or operational disruption. Despite this, only 38% conduct detailed climate risk assessments, and 22% do not evaluate future climate impacts at all. This gap in preparedness leaves many companies vulnerable and reliant on reactive, rather than proactive, risk management measures.

For risk managers, the path forward is clear: climate resilience must move from a peripheral consideration to a central discipline. The risks are material, the tools are available, and the window for proactive planning is narrowing.

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