2025's Extreme Weather Toll, Trump's Attack on US Climate Hub, ZestyAI Tapped by TruStage

🎉 Happy New Year Climate Proof subscribers!

I’ve been doing a lot of thinking over the holidays about the difference between information and insight, and what valuable content for adaptation professionals looks like. As a result of these reflections, I’m updating the Monday newsletter format to bring you — dear reader — more of my own thoughts and opinions on the adaptation theme and to explain how I see finance, tech, and policy changing to accommodate our warmer, wilder world.

This week I’m thinking a lot about incentives. What actually compels companies, governments, and financial institutions to actually invest in adaptation? We can probably call 2025 ‘The Year of the Adaptation TAM’ (Total Addressable Market), with all the reports mapping out demand and projecting fat CAGR curves. But there’s still not nearly enough discussion about how to turn those paper projections into real-world spending.

For example, what’s it going to take to incentivize a company locked in on their quarterly financials to put aside budget to protect against future climate shocks that may or may not manifest over the near term? 

It’s this question that makes me a regulatory hawk. Having followed the climate debate since before COP26 (a high point for corporate and government climate activism), it’s clear that companies can be incentivized to invest and restructure when made to by regulators.

But we’re in a world right now where climate-related corporate regulation is in retreat. Last year bore witness to the rollback of anything climate-coded in the US, at least at the federal level, and the watering down of sustainability regulations in the EU to boot. 

Where does this leave us? In the absence of the regulatory stick, market competition could enforce discipline — driving companies to safeguard assets and capitalize on climate-proofing opportunities. My concern here is that the cold logic of the market will mean only those corporations with large enough wallets will be incentivized and enabled to invest in adaptation. Meanwhile, companies operating on razor-thin margins may be effectively shut out — unable to absorb the hit to current cash flow such investments require. That mindset could easily harden, despite the fact that these same companies could be wiped out by a single climate shock.

This is likely to lead to a situation where rich and powerful companies are able to invest in their own climate protection — while those in the middle and at the bottom of the ladder are left exposed.

💡 Reminder: Have your say on the Adaptation Turning Points of 2025 by completing the survey at the bottom of this newsletter!

Last year’s extreme weather events exacted a devastating economic toll on countries, particularly poorer, more climate-vulnerable nations with limited adaptive capacity.

Christian Aid’s latest Counting the Cost report identifies 2025 as one of the costliest years on record, with over US$120bn in damages from just the ten most expensive disasters. From cyclones in South Asia to wildfires in the US and droughts in Brazil, the events underline the widening gap between climate risk and adaptation readiness.

The worst-hit events include the Palisades and Eaton fires in Los Angeles, which caused over US$60bn in economic damage and hundreds of deaths, and the deadly South and Southeast Asia cyclones, which killed over 1,750 and racked up US$25bn in damages. In India and Pakistan, monsoon flooding affected nearly seven million people and led to at least 1,860 deaths. In the Philippines, back-to-back typhoons displaced over 1.4 million, leaving communities without time to recover.

The report also highlights a dangerous data gap: the financial costs in many lower-income countries remain undercounted due to weak insurance markets and limited loss tracking. This obscures the true scale of climate-related losses, especially from slow-onset events like droughts and heatwaves. For example, in the Democratic Republic of Congo, Nigeria, Iran, and across Latin America, deadly floods and droughts wreaked havoc but lacked comprehensive economic assessments. The report calls for major investment in data collection, early warning systems, and social protection to close the adaptation gap.

The Global Environment Facility greenlit US$52mn in fresh funding through its adaptation funds for five climate resilience projects in Least Developed Countries and Small Island Developing States. The initiatives — ranging from mangrove restoration in Eritrea and Senegal to freshwater protection in the Marshall Islands — target fragile, high-risk areas with community-driven approaches. The GEF capital injection is expected to unlock an additional US$116mn in co-financing from public and private sources. (Global Environment Facility)

Insurers could see nominal investment losses of up to 19% by 2050 under the current high-warming scenario, with real losses climbing even higher due to persistent climate-driven inflation, according to a new Ortec Finance analysis. The report warns that current investment approaches expose insurers to cascading risks from climate-linked catastrophes, inflation, and the erosion of traditional risk-transfer mechanisms like reinsurance. (Ortec)

Pakistan has signed over US$300mn in financing agreements with the Asian Development Bank to bolster coastal protection in Sindh and climate-smart agriculture in Punjab. The Sindh Coastal Resilience Project (US$180.5mn) will deploy nature-based flood defenses and integrated water management to protect 3.8 million people in Thatta, Sujawal, and Badin. Meanwhile, the US$124mn Punjab initiative aims to equip smallholder farmers in 30 districts with low-carbon machinery, circular agriculture techniques, and skills training. (Arab News)

Climate Fund Managers has pledged US$86.2mn in mezzanine financing to jumpstart South Africa’s Olifants Management Model Programme (OMMP), one of the country’s largest water infrastructure projects. The EU-backed investment, via the Climate Investor Two fund, will catalyze construction of the first two stages of the six-stage initiative, aimed at expanding bulk water supply in the drought-prone Limpopo Province. Once operational, OMMP is expected to deliver safe water to 390,000 people and support industrial users across the mineral-rich Bushveld region. (Climate Fund Managers)

Swedfund has committed US$20mn to the Helios Climate, Energy, Adaptation and Resilience (CLEAR) Fund, stepping up efforts to finance African companies that cut emissions and build climate resilience. (Swedfund)

The Trump administration plans to dismantle the National Center for Atmospheric Research (NCAR), America’s top climate and extreme weather institution — triggering uproar among scientists and advocates concerned the dissolution will make the US less prepared for worsening climate catastrophes.

White House budget director Russ Vought called the federally funded lab “a source of climate alarmism” in a December 16 post on X, in which he said the National Science Foundation would be “breaking up” the center, with key functions like weather research being reassigned. The move is in keeping with Trump’s broader campaign to dismantle federal climate science infrastructure. Last year saw deep cuts to the National Oceanic and Atmospheric Administration (NOAA) and threats to its Office of Oceanic and Atmospheric Research — as well as the dismissal of contributors to the National Climate Assessment.

The latest action has drawn fierce backlash from scientists and elected officials alike. NCAR, run by a non-profit consortium of 130+ universities, underpins US and global efforts to model weather, climate, and atmospheric dynamics. Prominent researchers warned that shutting it down would degrade everything from hurricane monitoring to wildfire prediction and cripple response capacity for natural disasters.

Katharine Hayhoe, climate scientist and Distinguished Professor at Texas Tech University, said on LinkedIn that dismantling NCAR “is like taking a sledgehammer to the keystone holding up our scientific understanding of the planet.”

In Colorado, where NCAR is based, Democratic leaders have vowed to fight back. Senator John Hickenlooper and Representative Joe Neguse said they would delay a federal funding package and pursue legal options to block the move, while Governor Jared Polis said the closure would undermine national security and cede US leadership in weather and climate research.

Hundreds of protesters rallied in Boulder, Colorado at the end of December, many highlighting NCAR’s critical role providing early warnings and real-time data on extreme weather events.

A federal appeals court blocked Hawaii from enforcing a key provision of its new climate impact fee targeting cruise ship passengers, just hours before it was set to take effect. The Ninth Circuit’s narrow ruling on December 31 pauses the state’s planned 11% surcharge on cruise fares, citing unresolved constitutional questions, while allowing a separate 0.75% hotel tax hike to proceed. The cruise fee was projected to raise US$100mn to support resilience initiatives like beach restoration and wildfire prevention. (Beat of Hawaii)

The Trump administration has been ordered to restore over US$233mn in Homeland Security funding to nine states and Washington DC, ruling that cuts made earlier last year unlawfully targeted so-called sanctuary jurisdictions. The funds support state and local emergency services, which are essential to climate disaster response. The decision found the administration acted “arbitrarily and capriciously” by blocking the funding based on states’ refusal to assist in federal immigration enforcement. The Department of Homeland Security plans to appeal. (Associated Press)

A Swiss court has agreed to hear a landmark climate case against cement giant Holcim, brought by four residents of Indonesia’s flood-prone Pari Island who allege the company’s emissions are driving sea level rise. The plaintiffs, backed by NGO Swiss Church Aid, are demanding compensation, funding for flood defenses, and faster emissions cuts. The case marks the first time Swiss courts have accepted climate litigation against a major corporation. (Reuters)

US mutual insurer TruStage has partnered with AI-powered climate modeler ZestyAI to deploy advanced wildfire, hail, and adaptation insights across its commercial property underwriting portfolio.

The insurer will implement ZestyAI’s Z-HAIL, Z-FIRE, and Z-PROPERTY models, as well as its Wildfire Mitigation Pre-Fill tool, to comply with the California Department of Insurance’s tightening wildfire mitigation rules and sharpen its pricing for climate-related perils.

The collaboration comes as global insured catastrophe losses are on track to surpass US$100bn for another consecutive year, with secondary perils like hail and wildfire driving the surge. ZestyAI’s AI-powered tools analyze building-specific features — like roof condition — to determine their susceptibility to extreme weather events and the potential severity of ensuing claims.

HEN Technologies raised US$22mn in fresh capital to scale what it calls the fire industry’s first operating system for predictive fire defense. The US$20mn Series A round, led by O’Neil Strategic Capital — together with US$2mn in venture debt — will fund expanded deployment of HEN’s IoT-enabled hardware and its Fluid-IQ platform, designed to close a long-standing data gap in wildfire fighting by capturing real-time information on flow, pressure, and suppression performance. The company says its systems can extinguish fires three times faster while cutting water use by two-thirds. (HEN Technologies)

South Korean tech firm ECOPEACE is rolling out its autonomous, AI-driven water-cleanup systems in Singapore and Dubai, marking the company’s first international pilots as it eyes global expansion. The ECOBOT platform, already deployed across Korea, removes algae and cleans surface water — two challenges to freshwater exacerbated by climate change — using a combination of algae-removal robotics, electrochemical filtration, and real-time water-quality monitoring. (ECOPEACE)

The Cultured Hub, a Switzerland-based joint venture backed by Bühler, Migros, and Givaudan, has expanded into plant cell cultivation to help fortify global ingredient supply chains against climate shocks and rising ag costs. Originally focused on cultivated meat and fermentation, the facility now offers pilot-scale support for start-ups scaling plant cell-based production of high-value crops like cocoa, coffee, and citrus — crops that are increasingly threatened by weather extremes, pests, and land constraints. The Hub’s new capabilities aim to accelerate commercial viability and offer a climate-resilient complement to traditional agriculture. (FoodBev Media)

A new framework from University at Buffalo researcher Yifan Cheng offers a new approach for integrating community input — especially from Indigenous groups — into Earth system models that simulate climate and environmental processes. Published in AGU Advances, the framework lays out four levels of co-design, from configuring models with local partners to embedding culturally important variables like salmon habitat and fire practices. Cheng’s work shows that co-designed models not only produce more locally relevant insights, but also build trust in scientific tools historically shaped behind closed doors. (University at Buffalo)

Unequal evidence and impacts, limits to adaptation: Extreme Weather in 2025 (World Weather Attribution)

Climate change, migration, displacement, and health: Past, present, and future (The Lancet)

Impacts of global warming on subnational poverty and inequality (Nature Climate Change)

Climate-crop models to support opportunity crop adaptation in Africa (Nature Communications)

Beyond projects: Relational durability and the measurement of climate adaptation success in practice (Global Environmental Change) 

Ambient heat and early childhood development: A cross-national analysis (The Journal of Child Psychology and Psychiatry)

Assessing extreme sea level rise impacts on coastal agriculture in Europe and North Africa (Scientific Reports)

Climate change impact and adaptation responses in Africa’s major river basins: increasing resilience through transformative adaptation (npj Climate Action)

Evaluation and pathways for achieving agricultural resilience under the framework of climate-smart agriculture (Humanities and Social Sciences Communications)

Adapting to climate change during displacement: The role of livelihood opportunities and labor market access (Refugees International)

An empirically based dynamic approach to sustainable climate policy design (Nature Sustainability)

Thanks for reading!

Louie Woodall
Editor