Many businesses are not fully accounting for their climate-related risks, even after experiencing the effects of severe weather events.
A global survey of 130 risk managers by Marsh, an insurance brokerage and risk advisory firm, found that less than 50% of companies assess systemic climate risks that could affect critical infrastructure and supply chains. Most organizations remain focused on risks to their own assets rather than considering broader exposures.
This finding aligns with a recent report from the World Business Council for Sustainable Development (WBCSD), which stated that companies often lack insight into physical risks outside their direct holdings.
According to WBCSD, this limited perspective may leave organizations unprepared for threats arising from their value chains or the broader social and infrastructure context. Such gaps can result in operational disruptions and financial losses.
“Organizations may be unable to respond to threats emanating from across their value chains as well as wider social and infrastructural systems,” WBCSD said.
The Marsh survey also revealed that fewer than half of respondents conduct detailed climate risk assessments. Over 20% of those surveyed do not evaluate future climate impacts at all. Respondents cited challenges such as limited data and the use of catastrophe models that do not account for evolving environmental patterns.
According to Marsh McLennan Agency’s 2025 Business Insurance Trends report, climate risks are becoming more pronounced as extreme weather events increase in both frequency and intensity. The National Oceanic Atmospheric Administration (NOAA) recorded $27 billion in weather events in 2024, highlighting the growing financial impact of climate-related disasters on US businesses.
The Marsh report recommends that companies implement preventive measures such as flood protection and scenario planning to address rising climate-related risks. Assessing exposure to extreme weather events and adjusting operational strategies are considered essential steps for long-term sustainability.
Marsh McLennan’s report also highlights that digital risks, economic challenges, and human resource issues are interconnected with climate risks, requiring businesses to reassess their overall risk strategies.
The agency notes that expanding risk ownership across organizations and making data-driven decisions about capital allocation are vital for managing the complex landscape of modern business risks.
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