Extreme weather, shifting supply chains, and regulatory scrutiny are forcing companies to adapt or risk disruption.
Yet despite the mounting urgency, one barrier continues to hinder progress across industries.
According to Lars Regner (pictured), head of resilience services at HDI Global, companies often delay climate adaptation measures because they perceive climate risk as a future problem, not a present one.
“Some companies simply say, ‘this is tomorrow’s issue,’” Regner said. “But what we see consistently is that companies that address their risks early are more successful in the long run, financially and operationally.”
However, Regner does see advancement. “Five or six years ago, maybe 10-15% of companies were really sensitive to climate risk. Today, I’d estimate it’s closer to 40-50%,” he said. “Sustainability officers now often have budgets for risk mitigation, which helps drive action.”
While budget sensitivity is among the most significant internal barriers in organizations that Regner has worked with, there are also external factors impacting firms’ ability to improve long-term resilience.
Reliable forecasting data has been under pressure since recent budget cuts at NOAA (the US National Oceanic and Atmospheric Administration), something Regner views as a concerning development for the global community.
“It’s difficult to say exactly how much funding has been withdrawn from specific services,” he said. “But we’re already seeing restrictions on data availability, especially for users outside the US.”
For insurers and businesses alike, he said, the lack of consistent, accessible information makes it harder to anticipate long-term risks. While private sector data tools are stepping in to fill gaps, Regner warned their consistency is not guaranteed. Investments in infrastructure, supply chains, and new facilities require projections that span decades.
At the same time, policies can influence business priorities in each jurisdiction. “For example, in Germany, climate change isn’t strongly featured in policy,” said Regner.
“Still, businesses themselves tend to act out of self-interest. Even if they’re not reducing emissions, they are investing in protecting themselves. To me, that’s a positive first step. Awareness leads to investment, and investment leads to resilience. Once companies start to see how expensive inaction could be, they’re more likely to adapt.”
Another powerful driver of climate resilience is investor scrutiny. Across regions such as the Middle East and Europe, regulators now require businesses to conduct climate risk analyses before investments can be approved, said Regner. For companies hoping to attract capital, climate resilience is becoming a due diligence item.
“As soon as investors are involved, the pressure increases,” he said. “They want to see how their portfolios are exposed. That forces companies to quantify their value at risk.”
It’s not just large corporates feeling the pressure. Family-owned businesses are increasingly concerned about climate risk, too.
“One client in Germany, running a 17th-generation company, told me he had never thought much about natural catastrophe losses,” Regner shared. “But as he prepared to hand over to his daughters, they insisted on climate risk assessments to protect employees and ensure the company’s long-term future.”
What can companies do today to boost long-term resilience? First: Know your risk. This means not only understanding natural catastrophe exposures at a given site but also considering supply chains, workforce safety, and long-term adaptability, said Regner.
“Exposure depends heavily on location, and sometimes also on supply chains. Companies need to find reliable providers who can give them sound risk information for their specific sites,” he said.
Regner urged organizations to consider the following in their long-term climate resilience strategy:
Insurers and brokers alike have ramped up their climate risk assessment and advisory services to address the evolving needs of clients. HDI Global has built a risk consulting unit with around 230 risk engineers worldwide.
“As insurers, we’ve seen growing demand in the last three to five years from clients asking about their exposures in different locations and how they can become more resilient,” Regner said.
