Corporate risk managers will need to ramp up their responses to climate-related concerns as climate change exacerbates extreme events. Historically, adaptation efforts have been concentrated in the public sector, but collaborating with the private sector can help initiatives scale to support communities and businesses. Currently, many business leaders underestimate future climate-related losses, claiming they have always contended with extreme weather. But the events of the future will not be the same as those of the past – some will become more intense, others more frequent, and still others both more common and more severe.
For example, the 2024 Atlantic hurricane season is already off to a fierce start. Hurricane Beryl was the first Category 4 storm ever recorded in the month of June and, on July 2nd, became the earliest recorded Category 5 storm. Beryl ravaged several Caribbean islands before hitting Mexico and eventually Texas. More is to come. Scientists are forecasting an extremely active Atlantic hurricane season for 2024, largely due to La Niña conditions likely to develop in the coming months. But that is not the full story. Hurricanes are only expected to get more intense moving forward, and while previous approaches – such as relying on insurance policies to deal with the impacts – may be tempting, they are unlikely to be sufficient. The insurance industry, for example, is already strained and some providers are withdrawing entirely from extremely at-risk geographies.
The landscape – both physical and metaphorical – is changing. In many places, people and businesses will need to relocate away from the coast entirely. In others, engineered or nature-based solutions may play a role in ensuring that current usage remains viable. As communities explore adaptation options, public and private sector collaborations will be key to ensure that lives, livelihoods and critical infrastructure can withstand flooding, erosion, wind and other coastal hazards. For firms with the foresight to move beyond reactive responses, this could prove an opportunity to develop and showcase collaborative, reputation-building innovation.
