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Climate risk at every level: from place-based resilience to global adaptation finance

Climate Week 2026 in New York highlighted the extent to which climate risk demands solutions at every level of the economy.

10/25/2026 · 5 minute read

Climate Week 2026 in New York highlighted the extent to which climate risk demands solutions at every level of the economy. 

At the community level, physical hazards are intensifying and homeowner property insurance rates have seen double- or even triple-figure percentage increases. At the business level, companies are increasingly concerned about systemic risks and the longer-term availability and affordability of property insurance. And at the global level, there is a widening gap between the capital needed for climate adaptation and the funding being committed to it. 

Across discussions convened by Marsh and Marsh Re, the World Economic Forum (WEF), Carlyle, the Monetary Authority of Singapore (MAS), and the Singapore Sustainable Finance Association (SSFA), a common theme emerged: Managing the challenge of rising extreme weather volatility and concerns around insurability will require better ways to reduce physical risk, measure the value of resilience, and mobilize capital for adaptation.

The urgency is evident at each level. Chronic perils like drought and extreme heat are becoming more frequent and disruptive. Losses are mounting and insurance coverage is not designed to respond to these types of events. Businesses face great uncertainty about whether properties exposed to climate hazards will remain insurable at affordable costs, with Marsh’s 2026 Climate Adaptation Survey reporting that 62% of businesses expressed concern about insurance availability over a five-year horizon. 

At the same time, developing countries need $310 billion–$365 billion annually for climate adaptation by 2035, yet currently receive only $20 billion–$25 billion in international public adaptation finance. Governments and uninsured businesses continue to absorb much of the resulting losses. The challenge is not simply to reduce climate risk but to create conditions that will allow resilience investments to be measured, rewarded, and financed at scale. 

Creating those conditions will require work at the three levels of place, business, and finance.

Place: Building systemic resilience

WEF’s Addressing Insurability playbook emphasizes that insurance challenges often reflect underlying risk management failures across entire communities and systems. Addressing those risks requires moving beyond asset-level resilience toward a place-based approach involving public sector action, community coordination, and ecosystem-scale risk reduction.

A data center operator cannot solve flooding through onsite power generation alone, for example; effective adaptation may require improvements to surrounding infrastructure, flood protection, emergency-response systems, or natural ecosystems. Such broad interventions can benefit multiple properties and businesses requiring insurance.

The wildfire case studies shared during the WEF session illustrate the power of place-based resilience. In Tahoe, ecological forest management conducted across 1,450 acres yielded a 39% reduction in premiums and an 84% reduction in deductibles — extraordinary results that demonstrate how community-scale interventions can translate directly into improved insurability. 

Yet scaling such interventions remains difficult. The challenge lies not in the concept but in governance, financing, coordination, and the updating of insurance models to reflect new mitigation benefits. Most insurance models were built on historical data that does not account for current resilience interventions or the dramatic changes in the frequency and severity of climate hazards.

The lesson at the place level is clear: Resilience must be addressed across the systems that create and transmit risk, not only at the individual asset level.

Business: Measuring and rewarding resilience

The next challenge is translating systemic risk into decisions that businesses and investors can act on. Marsh and Carlyle’s Investing in Resilience initiative provides a framework for doing so by turning resilience from an abstract aspiration into a concrete investment thesis. 

It relies on a four-step approach:

  1. Assess forward-looking physical climate risk
  2. Understand existing controls
  3. Reduce future material exposure
  4. Document avoided losses and share with capital providers

Portfolio companies and property owners are more likely to invest in resilience when they can connect their investments to tangible returns such as lower premiums, improved deductibles, more favorable attachment points, or multi-year policy stability.

During a Marsh Re hosted session on The Resilience premium: accelerating adaptation in a riskier world, discussion centered around the insurance and reinsurance industries’ role in connecting physical science, catastrophe modeling, and mitigation technology.

Insurers and reinsurers are often among the first to see climate hazards materialize, giving them a unique ability to quantify losses and identify where resilience investments can have the greatest impact.

The discussion highlighted five ways to accelerate resilience:

This will help identify which resilience measures are working and where investment can have the greatest impact.

More sophisticated analyses will demonstrate the economic value of resilience measures and the losses they help avoid.

Innovations in science, engineering, infrastructure, and measurement will strengthen our understanding of climate risks and allow us to address them while enabling more effective loss mitigation.

Recognizing its economic value can make resilience a more compelling investment long before disaster strikes.

Building resilience requires expertise from an array of domains — insurance, reinsurance, business, government, academia, and other stakeholders.

Together, these perspectives from across the risk management and finance industries point to an important shift at the business level: Resilience becomes more actionable when insurers can recognize and reward it.

Finance: Making adaptation investable

Even when businesses and communities can identify effective resilience measures, the  climate adaptation challenge is so great that it exceeds what individual projects can accomplish. The crucial next step is creating the financial infrastructure needed to mobilize capital across markets.

A forum hosted by Marsh with MAS and SSFA examined this challenge through the lens of adaptation finance. The discussion highlighted several systemic barriers that can make climate risks difficult to ensure and adaptation difficult to finance.

One challenge is the persistent protection gap: Much of the economic loss associated with climate hazards remains uninsured. Meanwhile, chronic risks can be especially difficult to address through traditional insurance because they may develop gradually rather than producing the clear triggers associated with acute events.

Other barriers involve data and valuation. Although considerable climate-risk data already exists, it is not always presented in a form that allows businesses, insurers, lenders, and investors to use it in their decision-making.

Even when adaptation measures demonstrably reduce risk, markets lack consistent mechanisms for evaluating the losses those investments help avoid. Without a common way to translate risk reduction into financial value, the economic benefits of resilience can still be difficult to incorporate into insurance, lending, and investment decisions. 

Finally, the institutions involved in adaptation often work within different frameworks and time horizons. Governments may plan over decades, while businesses, financial institutions, and investors make decisions over different periods and according to different measures of risk and return. That challenge is apparent in national adaptation plans: Identifying a country’s adaptation priorities does not, by itself, turn those priorities into projects with the financial structures, risk-return profiles, and alignment of frameworks needed to attract investment.

Overcoming these barriers will require three transformative market shifts:

Credit rating agencies, insurers, banks, and investors currently operate with different data, models, and time horizons. Common standards for translating climate risk into financial terms could allow capital providers to assess the value of resilience more consistently.

Insurance and financing should be restructured to reward measured resilience. The challenge is scaling this model into a coordinated international framework.

While the insurance industry has developed extensive proof of concepts demonstrating the value of pre-disaster investment in resilience, implementation has been limited by regulatory constraints and lack of transparent cost-benefit analysis. The path forward requires creating standardized methodologies that translate avoided losses into financial language that sovereigns, corporations, and financial institutions can incorporate into investment decisions.

The goal is to create a financial system in which the value of reducing climate risk can be recognized across the investment chain, from physical interventions to insurance pricing to lending and capital allocation.

Scaling climate resilience

Our Climate Week discussions point to a progression in how climate risk must be managed:

  • At the place level, communities need to reduce the underlying physical risks that affect multiple properties and businesses. 
  • At the business level, companies and investors need better ways to measure the value of resilience, while insurers and reinsurers need better data and methodologies for recognizing and rewarding risk reduction.
  • And at the financial-system level, standardized data, financial products, and methodologies for evaluating avoided losses can help turn individual resilience investments into a scalable market for climate adaptation. 

The perspectives shared during Climate Week 2026 suggest that the financial and insurance sectors are moving beyond discussion toward action. The challenge now is to connect these efforts, take what is working in communities and businesses, demonstrate financial value, and build the markets and institutions needed to scale adaptation to the level demanded by a changing climate.

Our people:

Amy Barnes

Amy Barnes

Energy & Power, Climate & Sustainability Strategy Head, Marsh

Jack Watts

Jack Watt

Climate & Sustainability Strategy Leader, US & Canada, Marsh Risk

Kieran Bhatia

Kieran Bhatia

Senior Vice President, Climate and Sustainability Lead, North America, Marsh Re