1. New research reveals gaps in climate risk assessments by many organizations. 2. 78% of firms face climate impacts, but only 38% conduct detailed assessments. 3. 40% of organizations report insufficient funding for climate adaptation efforts. 4. Regional variances show Asia and the Middle East most affected by climate events. 5. Urgent need for a holistic approach to climate risks identified by Marsh.
The research highlights the increasing relevance of climate risk management, an area Marsh McLennan specializes in, suggesting growth opportunities. Historically, firms that adapt to emerging risks see improved market positions, which presents a favorable outlook for MMC.
The significance of climate risks and the reported underinvestment may catalyze greater demand for MMC's services. The findings could enhance awareness and drive strategic decisions among clients regarding risk management practices.
As adaptation to climate risks becomes more crucial, MMC's established position can lead to sustained demand. Over time, companies investing in such areas typically outperform peers, providing a longer-term financial upside for MMC.
New research published today by Marsh, the world's leading insurance broker and risk advisor and a business of Marsh McLennan (NYSE:MMC), reveals that while there is widespread acknowledgment of climate risks, organizations are not conducting comprehensive cost-benefit analyses to justify further adaptation investments. This is resulting in significant gaps between the outcome of climate risk assessments and adaptation strategies.
Marsh's 2025 Climate Adaptation Survey analyses the responses of over 130 risk managers globally and reveals critical insights into how private sector organizations are responding to evolving climate risks. According to the research, 78% of organizations face climate-related impacts like flooding, heat, and water stress, with 74% reporting asset losses and disruption stemming from these events. Yet, only 38% perform detailed climate risk assessments, and 22% do not assess future climate impacts at all.
The survey also highlights regional variances in climate impacts over the past three years, with the highest proportion of respondents affected by extreme weather events in Asia (73%), India, the Middle East, and Africa (68%), and Canada (67%). System-wide risks, including dependencies on critical infrastructure and supply chains, are often under-appreciated, potentially magnifying the effects of climate events.
A significant portion of respondents (40%) to Marsh's survey felt their organization lacks sufficient funding for effective climate adaptation, citing challenges such as the tendency for other business priorities to overshadow climate initiatives, a lack of knowledge and understanding about future climate scenarios, and competing interests for limited resources.
Amy Barnes, Head of Climate and Sustainability Strategy and Global Head of Energy & Power, Marsh, said: "Our research shows organizations consistently underinvest in climate adaptation relative to the severity of their identified 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. As climate hazards continue to intensify, proactive resilience planning is essential to safeguard assets, maintain revenue streams, and protect long-term business viability."
About Marsh
Marsh, a business of Marsh McLennan (NYSE:MMC), is the world's top insurance broker and risk advisor. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit marshmclennan.com, follow us on LinkedIn and X.
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Eileen Mercer
+44 (0)7990 802 830
eileen.mercer@marsh.com