Most businesses are failing to invest in needed climate adaptation as other business priorities and resources take
precedence over climate initiatives, according to a survey published by Marsh, the insurance broker and business of Marsh McLennan.
While 75% of organizations are assessing future climate impacts, primarily from a risk perspective, many have yet to fully recognize climate adaptation as an i
nvestment opportunity to enhance their overall enterprise risk management, with 40% of respondents indicat
ing that current funding for climate adaptation is inadequate, said Mars
h’s 2025 Climate Adaptation Survey, which analyzed the responses of over 130 risk managers globally.
Many businesses fail to understand the full scope and benefits of climate adaptation, said Marsh, quoting a June 2024 report from the US Chamber of Commerce, wh
ich said, for every $1 invested in disaster resilience and preparation, $13 are saved in economic costs, damages, and cleanup.
Access to insurance is not yet driving investments in adaptation, the Marsh report revealed. “The s
urvey shows that motivation for climate adaptation among respondents is largely driven by internal and stak
eholder pressures rather than insurance considerations.”
According to Marsh’s research, 78% of organizations face
climate-related impacts such as flooding, heat, and water stress, with 74% reporting asset losses and disruption stemming from these events. “Yet, only 38% perform d
See more beautiful photo albums Here >>>
etailed climate risk assessments, and 22% do not assess future climate impacts at all,” said the report.
Although there is widespread acknowledgment of climate risks, organizations are not conducting comprehensive cost-benefit analyzes to justify further adaptation
investments, which is resulting in significant gaps between the outcome of climate risk assessments and adaptation strategies, Marsh explained.
“Our research shows organizations consistently underinvest in climate adaptation relative to the severity of their ide
ntified risks. There is clearly an urgent need for organizations to adopt a holistic approach to climate risk, integrating asset-level and system-level assessments, and
embedding climate adaptation into enterprise risk management
frameworks,” commented Amy Barnes, Marsh’s head of Climate a
nd Sustainability Strategy and global head of Energy & Power, in a statement accompanying the report.
“As climate hazards continue to intensify, proactive resilience planning is essential to safeguard assets, maintain revenue streams, and protect long-term business viability,” Barnes added.
While the majority of respondents (60%) believe their organization has appropriate levels of funding dedicate
d to climate adaptation efforts, a significant portion of respondents (40%) feel their organization lacks sufficient funding for effective climate adaptation, ac
cording to the report. “The challenges cited include the tendency for other business priorities to overshadow cli
mate initiatives, a lack of knowledge and understanding about future climate scenarios, and competing interests for limited resources.”