As climate risk mounts, more companies turn to adaptation planning to build resilience

This is a thought leadership report issued by S&P Global. This report does not constitute a rating action, neither was it discussed by a rating committee.

Several dynamics coming to the fore in 2026 are putting climate adaptation and resilience planning firmly into the spotlight. First, quite simply: the impacts from extreme weather events, are increasingly visible. Record-breaking droughts, heat waves and wildfires have dominated headlines this year and continue impacting daily life around the globe. These kinds of extremes are jumpstarting conversations about how to respond.

Second, there is growing understanding that these events will only become more frequent and severe over time with climate change. S&P Global sees a 50% likelihood that by 2040, the average global temperature will be more than 2.3 degrees Celsius higher than pre-industrial levels. That is well above the 1.5-degrees Celsius limit set in the Paris Agreement to significantly reduce the risks and impacts of climate change.

Combined, these factors are driving companies and countries to invest in adaptation and resilience efforts to prepare for the impacts of climate change. To explore company preparedness for climate physical risks, we analyzed 9,242 responses to the S&P Global 2025 Corporate Sustainability Assessment (CSA). [The CSA is administered by S&P Global Energy, which operates separately from S&P Global Ratings.] We compare companies’ progress on adaptation and resilience plans since 2022, and we dive deeper into the types of adaptation plans companies are prioritizing.

Nearly half (46%, 4,285 of 9,242) of companies now report adaptation plans, up from about a fifth (19%, 1,743) in 2022 (see chart 1). The number of companies disclosing adaptation plans has increased by over 40% since 2022. In the CSA, companies can disclose that they have either a context-specific (asset-level) or overall (principle-based) plan (see box for definitions).

Growing awareness of the risks from climate shocks may be driving this uptick in adaptation plans. Very few companies in our analysis (less than 1%, 67 of 9,242) report having no significant exposure to physical climate risks that would require an adaptation plan. This is only a small increase from 2022, suggesting that companies largely recognize the potential materiality of climate physical risks to their operations.

All regions showed an increase in the number of companies disclosing adaptation plans between 2022 and 2025, although the pace of adoption is uneven (see chart 2). About 58% (2,848 of 4,915) of Asia-Pacific companies disclosed adaptation plans in the 2025 CSA data compared with about 42% (690 of 1654) in Europe and 25% (550 of 2,236) in North America. Despite some progress, North America remains the clear laggard where only 13% (280 companies) disclosed adaptation plans in 2022. The number of companies responding to the CSA varies by region, meaning those percentages may be more sensitive to changes where sample populations are smaller, such as Africa (35%, or 39 of 112 companies disclose adaptation plans) and Latin America (49%, 158 of 325).

Regional differences may result from external pressures and priorities, as many organizations face tighter financing conditions and the effects of ongoing conflicts in the Middle East and Ukraine (see “Global Credit Conditions And Outlook Q3 2026: Fragile Relief”, Jun. 30, 2026). In jurisdictions with advanced climate disclosure rules like Asia Pacific and Europe, companies may face greater scrutiny from investors and regulators, encouraging quicker adoption of adaptation plans. The EU’s Corporate Sustainability Reporting Directive (CSRD) will require consistent, audited climate risk metrics, enabling benchmarking and supporting investment decisions with reliable, comparable data.

Despite reduced ambition in some disclosure standards, companies are expected to keep reporting under voluntary frameworks like the Global Reporting Initiative (GRI), as investors demand data on climate-related financial impacts.

Likewise, companies more acutely exposed to climate risks — such as heat waves, flooding or water shortages — may also have a greater incentive to plan for resilience to protect assets, maintain business continuity, and manage supply-chain security.

Companies in sectors that are responsible for real assets — which cannot easily be moved away from climate hazards and that usually have large operational footprints — tend to have made more progress. That is true for companies in utilities (68%, or 221 of 323 companies disclosing adaptation plans), real estate (67%, 386 of 575), materials (56%, 509 of 909), industrials (50%, 863 of 1,731) and consumer staples (50%, 301 of 602) in the 2025 CSA (see chart 3).

For companies in these sectors, direct impacts from climate hazards may manifest through damage to assets and/or disruption to operations, and result in higher-than-expected investments to rebuild and adapt to the damaged asset base.

Some companies may not face high direct climate physical risks but could still have significant exposure through their value chains. This includes health care firms and financial companies like banks and insurers. Banks, for example, may be exposed to climate risks through the assets, companies or projects they finance or invest in, even though they are not responsible for implementing adaptation and resilience measures on those assets, and therefore may not report such actions. This may help to explain why adaptation planning appears less mature (see chart 3). For companies in these sectors, failing to identify and manage these indirect risks could result in financial or operational impacts (see "Ripple Effect: How Value Chains Compound Sector Exposures To Physical Climate Risks", March 13, 2025).

Anecdotally, we see large financial institutions paying close attention to adaptation planning. For example, in a podcast interview with S&P Global, an executive from the largest bank in the US — JPMorganChase — explained that adaptation and resilience featured heavily in the company’s 2025 Climate Week NYC engagement because of  increasingly severe weather events impacting clients and communities, along with the knock-on effects these events have for homeowners insurance. In another podcast interview, an executive from one of the largest banks in the Middle East— Dubai-based Emirates NBD — told us that adaptation is “hitting the mainstream” for banks in the region. 

Listen to the interviews:

There is a lot to do in developing an adaptation plan. The precise steps vary, but usually, companies will first want to understand the exposure of their operations to climate hazards, then pinpoint the adaptation and resilience measures that are needed in response to risks. Next, they will prioritize where those investments are most worthwhile, and set objectives for what success looks like. As a result, adaptation plans may be implemented over time, months or even years.

Across all sectors, we find that less than a third (32%, 1,557 of 4,827) of companies with adaptation plans will implement them within 10 years, based on data collected in the 2025 CSA (see chart 4). Utilities buck this trend with 42% (101 of 239) planning to implement over the same timescale. The utilities sector typically manages large and complex infrastructure networks spanning significant geographical areas. Business continuity is also closely tied to operational resilience, and strict licensing conditions may be in place that incentivize those companies (see “Update On California Climate Risks And Reference Guide”, May 27, 2026).  

Even where some sectors report faster progress, a large share of companies falls into longer-term or undefined implementation timelines, pointing to a persistent gap between having an adaptation plan and executing it in the near term.

Though fewer financial companies, such as banks and insurance firms, and health care companies disclose adaptation plans, these companies appear to be putting their adaption plans into action quicker. This could be a result of facing outsized exposures to climate physical risks, stronger internal governance or more advanced risk management processes. Acting faster to implement plans may also suggest that the risks these companies face are more urgent and require immediate attention, or that the steps needed are easier, less expensive or supported — either financially or via policy — by other stakeholders.

Adaptation plans of midsize and large capitalization companies tend to be more advanced than those of smaller companies. Large-cap companies are more likely to have resources,  both financial and human, that can be channeled to support adaptation and resilience efforts. At the same time, they may also be sufficiently diversified to accept and adapt to the physical impacts of climate change due to their large asset bases and supply chains (see "Mercury Rising: European Entities Show Some Adaptation Gains As Physical Risks Mount", March 24, 2026). Public scrutiny of larger companies may also be more intense, prompting preventive action to avoid fallout associated with reputational risks.

Companies that are more highly rated are more likely to disclose adaptation plans. In our sample, about 59% (913 of 1,536) of companies with investment-grade ratings (‘BBB-’ or higher) reported adaptation plans in 2025, compared with 35% (303 of 870) of companies with speculative-grade ratings (‘BB+’ or lower). However, since 2022 — and with more ground to make up — speculative-grade companies have shown a greater sense of urgency as adaptation plan disclosures have grown about twice as fast as those of investment-grade companies.

Companies with higher ratings may be better equipped to handle the increasing impacts of climate change, as they are typically larger, and therefore have greater resources available to them. The opposite may be true of many speculative-grade companies. More highly-rated companies may also have deeper experience in managing complex risks, like those associated with climate events.

Companies in all sectors face growing climate physical risks, making adaptation planning increasingly important. While more companies are disclosing adaptation plans, detail is lacking, leaving many potentially underprepared for more frequent and severe climate hazards. Over half of companies in our sample lack adaptation plans. We also found that larger, more highly-rated companies, those in the most climate-sensitive sectors, or in regions with strict environmental rules are more likely to disclose plans.

More detailed adaptation plans could signal investment opportunities in adaptation and resilience products and services, estimated at up to $9 trillion by 2050, including $3 trillion driven by climate change. Companies offering solutions, such as infrastructure and hardening assets, weather monitoring, drought-resistant crops or supply chain resilience, could be especially well-positioned to benefit.

We expect to see continued focus on adaptation and resilience at key events on the global energy and sustainability calendar. The rising role of adaptation and resilience was one of our key takeaways from Climate Week NYC in 2025. We again expect this topic to take center stage in New York this September and in other forums like the UN’s Climate Change Conference of the Parties (COP31) in Türkiye this November.