American Corporates Tout Adaptation Playbooks in Q3

In the US, extreme weather shocks often peak between July and end-September. This is hurricane season — but it’s also when other dangerous convective storms strike, unleashing torrential rains and howling winds across large parts of North America.

In some ways, Q3 2025 lived up to this reputation. The country watched aghast as deadly floods, charged by relentless rains, swept through Texas in July. Later on, Hurricane Erin — though it never made landfall — brought violent waves and flooding to the Eastern Seaboard. And has become all too routine, the season birthed myriad dangerous wildfires, scorching vast tracts of land in California, Arizona, and other parts of the American West.

However, for America’s largest corporations the impacts of these extreme weather events were muted, according to earnings call transcripts of S&P 500 companies. This may come as little surprise to sharp-eyed corporate analysts. After all, as terrifying as the recent calamities were, they merely brushed against the fabric of corporate America — rather than tearing through it. 

The US experience aligns with worldwide trends. Recent data from Gallagher Re suggests that Q3 2025 saw the lowest climate- and weather-related catastrophe losses this century. While this makes for a welcome respite from the travails of earlier this year, corporate executives did not let up on pushing forward adaptation plans and sounding off on the dangers of extreme weather to their operations.

Storms were the most commonly mentioned climate-related hazard by S&P 500 executives last quarter. Thirty-four companies cited them, down from 40 in the previous quarter and 46 a year earlier.

Almost half of these enterprises were utilities, and many referenced long-ago storms that are still passing through their balance sheets or ongoing risk mitigation efforts rather than recent hazards. For example, Vincent Sorgi at PPL Corporation $PPL ( ▼ 1.66% ) — an east coast power provider — discussed a planned rate increase request in Pennsylvania that would “support our continued efforts to strengthen the grid against future storms and incorporate advanced technology that allows us to work smarter and more efficiently.”

There were exceptions. Joseph Nolan, CEO at Eversource $ES ( ▼ 0.39% ) — another utility serving New England — highlighted a punishing storm that lashed Cape Cod over the July 4 weekend, bringing with it “damaging winds” that posed “significant operational challenges.” These conditions did not lead to notable disruptions, however. Nolan explained that the company’s grid modernization efforts in recent years had “significantly enhanced system resilience, enabling faster and more efficient storm restoration efforts.”

It’s a clear example of how utilities are finding value in climate adaptation.

For certain businesses, though, the power system’s resilience to storms was a drag on performance — rather than a boon.

A key example was offered by the CEO of home back-up generator company Generac $GNRC ( ▲ 4.08% ) — which thrives when power utilities fail. He noted that lower outages in Q2 led to fewer home consultations year-on-year. Reinforcing the point, he added that any major disruptions would provide a “nicer tailwind” to its home standby business going forward. 

In contrast to last year, no hurricanes made landfall in the US in Q2 or Q3 — sparing corporations (especially insurers) billions of dollars in losses. Still, executives were eager to update investors on their hurricane preparation efforts, while analysts came ready with questions of their own. For instance, Andrew Wong, an equity researcher with Canadian bank RBC, asked chemicals firm The Mosaic Company $MOS ( ▼ 2.44% ) how it was preparing for hurricane season in Florida, where it runs a number of potash mines. CEO Bruce Bodine answered with two initiatives: storm surge analysis of its motor control centers, and an overhaul of its stationary buildings to address wind risks.

Notably, Bodine said the wind assessment was carried out in consultation with The Mosaic Company’s insurance carriers, with modifications to buildings made based on their recommendations. This suggests the company’s hardening efforts are at least partly incentivized by the need to retain affordable disaster coverage.

The third quarter marks peak heat season in many of the regions where America’s largest companies operate. High temperatures can also weigh on the performance of certain industries, most notably utilities and agriculture.

But many others can be affected — even the chocolate industry.

Indeed, last quarter Mondelez International $MDLZ ( ▼ 0.66% ), which owns chocolate snack brands Cadbury, Oreo, Milka, and Toblerone, among others, reported a slump in sales volumes in June and July due to a heatwave in Europe. The decline appeared to catch executives off guard, with CFO Luca Zaramella admitting the impact “is clearly something we couldn’t predict.”

As extreme heat becomes more frequent with climate change, companies like Mondelez may avoid surprises by investing in forecasting tools that track temperature trends and sales performance.

Other companies boasted of their resilience to heat events. Jim Burke, CEO of independent power producer Vistra Corp. $VST ( ▼ 0.57% ) said that their generator fleet performed well during the three hottest days in June. “Operationally, we achieved commercial availability in line with expectations as the team worked diligently to prepare the fleet for the critical summer months,” he said. Commercial availability came in at around 95%, he added.

Fires, floods, and other natural disasters have long plagued the US — well before climate change started exacerbating their frequency and severity. For decades, however, US households and businesses have been partially shielded from their full impacts by the Federal Emergency Management Agency (FEMA).

This arm of the government has long dispensed capital and resources to communities rocked by disasters. Its efforts have cushioned the financial blow to corporations and investors, too. For example, in the wake of the Texas floods this July, the Kerrville Public Utility Board — which saw its installations swamped by the raging waters — said it was applying to FEMA for reimbursement grants to cover 75% of damages incurred.

However, the Trump administration is seeking to change how FEMA provides aid and shift the financial burden of disaster recovery to states, local governments, and individuals.

The potential ramifications for businesses are now starting to be explored on earnings calls. Notably, Jian Huang — an analyst at Bank of America — asked the executives of property and casualty insurer Chubb Insurance $CB ( ▲ 0.24% ) what they thought the potential phasing out of FEMA could mean for high-net-worth business in the coastal states. While Chubb’s CEO, Evan Greenberg, said he didn’t think it would have an impact given the low coverage limit offered by FEMA for flood insurance, he did say the private flood market is growing.

This suggests that investors and analysts are alive to the potential downstream business impacts of Washington pulling back from adaptation spending.

While extreme weather didn’t dominate earnings chatter last quarter, companies had plenty to say about their climate-proofing playbooks.

Again, utilities led the way. Three utilities talked up their “grid modernization” efforts last quarter — Edison International $EIX ( ▼ 1.62% ), Eversource $ES ( ▼ 0.39% ), and Evergy $EVRG ( ▼ 1.3% ). Two industrials companies that supply parts and equipment to utilities also referenced the phrase: Hubbell Incorporated $HUBB ( ▼ 0.05% ) and Ametek $AME ( ▲ 1.13% ). In both cases, executives talked about grid modernization as a tailwind to their businesses. This shows how the adaptation imperative can be a revenue-raiser for well-positioned companies.

“Wildfire mitigation” was another popular discussion point, with five utilities speaking about their initiatives here. Those based in the fire-prone West were particularly well represented. Some executives gushed about their high-tech approach to combatting fires. Patricia Poppe at PG&E $PCG ( ▼ 3.31% ) said she was “excited” by the company’s deployment of “more than 10,00 sensors throughout our high-risk areas” designed to prevent ignitions.

Most utilities also used their earnings calls to update investors on their wildfire mitigation plans, which are required by law in many western states.

Edison International $EIX ( ▼ 1.62% ), the holding company for Southern California Edison, also offered some insight into the back-and-forth between utilities and regulatory authorities on how electric rate decisions are made — and how regulators view different climate adaptation measures. Discussing the California Public Utilities Commission’s July Proposed Decision on Edison’s rate case, CEO Pedro Pizarro said regulators deemed the company’s covered conductor program “a highly effective wildfire mitigation strategy,” with no parties opposing the associated rate request. He added that targeted undergrounding of power lines was also acknowledged as “an effective tool” for preventing ignitions.

Certain energy company executives also made reference to adaptation in their earnings calls. One — Lorenzo Simonelli, CEO of oil and gas technology provider Baker Hughes $BKR ( ▼ 1.34% ) — highlighted a rising trend in power infrastructure that is only likely to accelerate as climate-related disruptions pick up: “The growing frequency of grid disruptions is prompting industries with critical operations to seek more reliable on-site power solutions. This shift is especially evident in sectors like energy, health care, data centers, airports and other mission-critical infrastructure.” He added that Baker Hughes’ distributed power offerings are “well positioned to meet this emerging need.”

The growth of this kind of fortress mentality among large corporations is likely to be a moneymaker for all sorts of energy tech innovators, making the companies that provide them a potentially lucrative bet for adaptation-minded investors. 

On the flipside, a standalone approach to power and infrastructure could weigh on the balance sheets of even the mightiest companies, as they pay out more and more for exclusive services they once shared with others.

Thanks for reading!

Louie Woodall
Editor