Insurer Survey Spotlights Climate Preparedness Gap, Noem's Ouster, JP Morgan's Adaptech Review, and More

After an extended winter break, the Climate Proofers podcast is returning to the airwaves tomorrow for a new, eight-episode season with leading thinkers, investors, and practitioners in climate adaptation and resilience. This week’s interview features Kate Stein, Director, Sustainable Finance, Insurance at the Environmental Defense Fund.

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The US and Israel’s war on Iran is metastasizing rapidly. What started as a barrage of not-so-surgical missile strikes on the Islamic Republic has devolved into an international aerial melee fought between drones and anti-air ballistics — with civilian infrastructure firmly in the crosshairs.

Last weekend, reports came in of attacks on water desalination plants in Iran and Bahrain, a small island nation in the Persian Gulf. Collectively, these facilities sustain tens of millions in the parched Middle East. Without them, whole cities would have to be evacuated to stop untold thousands from dying of thirst.

The recent attacks underline how degrading a country’s ‘adaptive capacity’ — its ability to cope with adversarial stressors, like climate change — is a core aim of warfighting. Of course, this isn’t a modern development. Defenders and attackers during the Crusades would poison wells to cripple their enemies before battle was even joined, a medieval precursor of today’s assaults on water infrastructure. However, with the world getting hotter, faster, adaptation infrastructure is likely to expand, with ever larger populations dependent on life-sustaining technologies for survival. This, in turn, will increase the attack surface area of countries — making them more vulnerable in a conflict.

There are two possible consequences of this unfolding reality. First, adaptation infrastructure — desalination plants, flood control reservoirs, sea walls — will become fortified, or even militarized. The cost of such installations will rise massively as a result. Worse, they may attract hostile fire precisely because they are seen as part of a country's defensive architecture.

The second possibility is that adaptation infrastructure will become increasingly decentralized. This makes strategic sense — dispersed adaptive capacity means no single facility’s elimination can bring down the entire system. What could this look like? Think ‘personal climate defense’. Community cooling centers and personal cooling garments to protect populations from extreme heat if the grid is knocked out. Air moisture extraction tech for supplying drinking water at home if treatment or desalination plants are incapacitated. 

Buyers of these solutions could be plentiful if the perception takes hold that large, public adaptation measures cannot be relied on in a conflict — or any kind of external stress. Indeed, this dynamic is already playing out in the US in the backup generator market. Populations tired of grid failures in the wake of storms and floods are increasingly turning to home energy systems to provide personal resilience when disaster strikes.  

Of course, there are limits to personal adaptation. Small scale solar-powered desalinators and air moisture extractors cannot hope to produce the amount of water industrial-sized desalination plants can. Similarly, green roofs and rain gardens are no substitutes for municipal-scale stormwater drains.

Still, with geopolitical strife on the upswing — and government capacity contracting — it would be rational for individuals, communities, and businesses to increasingly look out for themselves.

Yet not everyone will be able to secure personal climate defenses. Many (though not all) small-scale adaptation solutions are likely to be costly, and out of reach to the billions living in climate-vulnerable areas without discretionary income. Hence, like so much in our modern world, safety and comfort may increasingly become the preserve of the rich, and a distant prospect for the poor.

Louie Woodall
Editor, Climate Proof

The global insurance industry is underprepared for the challenges of worsening climate shocks, a new survey by the MSCI Institute suggests.

The poll of 50 insurers and reinsurers across Europe, North America, and Asia-Pacific found that 88% of respondents expressed moderate-to-very-high concern about climate-driven physical risk creating systemic financial instability, with almost all sounding the alarm on the long-term insurability of infrastructure in vulnerable regions. Yet only half have integrated physical risk into their overall risk management frameworks, while 22% think the insurance sector overall is not at all well-prepared for the challenges these pose.

Carriers also sharply diverged on impressions of their own readiness versus that of the industry as a whole. This divide was most pronounced in North America. While 69% of North American insurers said their own underwriting processes are somewhat well prepared, just 38% said the same of the regional industry in the round. European insurers’ perceptions of their own operations were also rosier than that of their industry, with 33% saying they were very much prepared for climate risks, and just 4% saying the same for their peer group.

Respondents also suggested they were fast losing faith in catastrophe models calibrated on historical data. Nearly all insurers interviewed said those models are becoming less reliable as hazard behavior shifts — and are responding by layering geospatial analytics and forward-looking data on top of vendor outputs. The harder problem is embedding this enriched intelligence into pricing decisions within annual underwriting cycles, with some interviewees some insurers saying their use of certain climate analytics as exploratory rather than operational.

Insurers also recognize the commercial opportunities presented by a warmer, wilder world. More than half say underwriting for climate resilience represents a ‘large’ or ‘transformational’ opportunity for their own premium expansion. Moreover, almost all see climate risk and resilience advisory services as a significant revenue opportunity, and 58% are actively developing parametric products — solutions gaining traction among businesses and governments looking for extreme weather protection.

New modeling suggests EU member states could carry average public debt loads 58 percentage points above official forecasts by 2050 — and 197 points above by 2070 — if climate risks are not accounted for within national budgetary frameworks. The New Economics Foundation, a UK-based non-profit, expanded the European Commission’s Debt Sustainability Analysis to incorporate physical climate damage and transition costs, revealing how these factors could cause sovereign risk premiums to rise and debt ratios to grow. The modeling also shows how early EU investment in adaptation and mitigation can lower fiscal stress, reducing the likely average debt increase to just 4 percentage points above official projections by 2050 and actually reducing forecast debt by 12 points at the 2070 horizon. (New Economics Foundation)

Swiss voters rejected the creation of a supersized climate fund by a 71% margin Sunday, defeating a proposal that would have channeled CHF4-8bn (US$5-10bn) annually into renewable energy expansion and biodiversity protection. The measure failed in all 26 cantons, including urban strongholds where left-wing and Green parties typically perform well. Switzerland currently allocates roughly CHF2bn (US$2.6bn) a year to climate and energy measures and CHF600mn (US$770mn) to biodiversity. (SWI Swiss Info)

A former employee of real estate giant Cushman & Wakefield has sued the company for allegedly failing to protect its workers’ retirement savings from climate-related financial risks. The first-of-its-kind suit, brought under the US Employee Retirement Income Security Act (ERISA), targets the Westwood Quality SmallCap Fund used by Cushman & Wakefield. This fund expressly does not conduct climate risk analysis and trailed its benchmark by 17 percentage points in 2025 while charging above-market fees. The lawsuit was filed in US District Court for the Western District of Washington by environmental law group ClientEarth USA and Cohen Milstein. (Cohen Milstein)

South Africa is turning to debt markets to fund nature-based water security, with Rand Merchant Bank and the Development Bank of Southern Africa structuring a ZAR2bn (US$121mn) bond to restore strategic water reserves. The five-year instrument will finance invasive plant removal and catchment rehabilitation, with returns tied to measurable environmental outcomes. (Reuters)

Madagascar unlocked US$29mn in disaster financing from African Risk Capacity and other development finance mechanisms following cyclones Fytia and Gezani. The payout drew on three pre-arranged facilities: a US$19.9mn drawdown from the World Bank’s REPAIR programme reserve, US$5.6mn from African Risk Capacity sovereign parametric insurance, and US$3.79mn in lookalike coverage from humanitarian partners. Together, the instruments covered more than 500,000 affected people and 67,000 displaced. (African Risk Capacity)

The Global Adaptation & Resilience Investment Working Group is excited to bring this outcomes-driven event to investors and practitioners wanting to incorporate adaptation and resilience (A&R) investing into their portfolios. The Summit is structured around real case studies — CEOs, investors, and capital market participants will share how resilience investments are being developed, financed, and scaled across sectors and asset classes.

President Trump fired Homeland Security Secretary Kristi Noem on Thursday, ending a contentious tenure — which included her rocky oversight of the Federal Emergency Management Agency (FEMA), the country’s premier disaster response authority. The president named Senator Markwayne Mullin of Oklahoma as her replacement, pending Senate confirmation.

Noem required personal approval of every FEMA contract and grant above US$100,000 and had frozen billions in disaster reimbursements, hindering the flow of capital to regions hit by climate-related catastrophes. The total backlog reached US$17bn last month, according to the New York Times, with state and local governments waiting months or years for reimbursements on relief work already completed.

FEMA staff described Noem’s review policy as operationally catastrophic. During Texas flooding last summer, officials said they could not pre-position rescue crews because the spending threshold blocked routine emergency expenditures. A Senate Democratic report found the policy delayed large disaster recovery projects by an average of three weeks.

“The transition to new DHS [Department of Homeland Security] leadership presents an opportunity — if handled with urgency — to rebuild capacity, restore trust, and put experienced emergency managers back in the driver’s seat,” wrote Laurie Schoeman, a former Biden advisor on climate adaptation, on LinkedIn. “As we head into a season where disasters don’t wait for bureaucratic resets, this is a chance to reaffirm what FEMA is meant to be: a cornerstone of national resilience, not a political flashpoint,” she added.

California Governor Gavin Newsom moved quickly after Noem’s firing, demanding her former department immediately release more than US$500mn in funding for recovery from the 2025 Los Angeles wildfires. The bottleneck has left Palisades and Altadena communities unable to advance permanent repairs to roads, schools, and public facilities, he claims.

California lawmakers unveiled a 13-bill wildfire mitigation package last Tuesday, the most sweeping legislative effort in state history to address megafire risk across both the built environment and surrounding landscapes. The package covers home hardening certification, resilience loan financing, insurance transparency, and a new Fire Innovation Unit within CAL FIRE to move technologies from pilot to statewide deployment. Two bills, AB 1891 and AB 1699, directly target a longstanding bottleneck in California's fire management strategy: the slow pace of prescribed and cultural burns. The measures would expand tribal and local capacity to conduct burns that have managed fire-adapted landscapes for millennia. (Megafire Action)

The European Committee of the Regions unanimously adopted an opinion on the EU’s Water Resilience Strategy last Wednesday calling for disaster resilience to be embedded into planning, infrastructure investments, and river basin management across the bloc. The opinion also calls for a “Water Test” to be applied to all EU legislation, so that water management is integrated into all lawmaking. The day the opinion was approved, nineteen EU regions also launched the Alliance for Water Resilience and Preparedness to Climate Change, designed to make sure subnational governments have a formal role in EU-wide adaptation governance and promote investment in water resilience and infrastructure. (European Committee of the Regions)

Singapore’s government will spend a chunk of its S$3.7bn (US$2.9bn) sustainability budget this year to strengthen its resilience to climate shocks as part of its ‘Year of Climate Adaptation’. The package of measures includes setting up a dedicated Heat Resilience Policy Office and a S$40mn (US$31mn) research initiative targeting heat impacts on vulnerable populations. The climate-proofing efforts will be formalized in Singapore’s inaugural national adaptation plan – a report that the country aims to publish in 2027. (Asia News Network)

The UK government is slashing nature and climate adaptation programs in developing countries even as it insists it will meet its £11.6bn (US$15.5bn) international climate finance pledge by the end of this month. Reporting by the Guardian finds that the £100mn (US$134mn) Biodiverse Landscapes Fund has been effectively halved, and that Coast, a coastal adaptation program is seeing “substantial cuts”. In addition, the £500m (US$669mn) Blue Planet Fund — set up to support marine environments and combat poverty— may be shuttered entirely. (The Guardian)

Scotland’s government has published a Strategic Action Plan on Wildfires, intended to improve prevention, preparedness and response. The 2025 wildfire season in the country produced 241 incidents, culminating in the Carrbridge and Dava Moor fires between June 28 and July 2, which burned nearly 10,000 hectares of moorland, peatland and woodland, making them the largest wildfires ever recorded in the UK. (Scottish Government)

Australia’s rail industry body has unveiled a climate resilience framework aimed at hardening the country’s rail network against floods, bushfires, heatwaves, and other extreme weather events. The Australasian Railway Association’s plan is aimed at rail industry organizations to help them assess and understand climate risks and vulnerabilities, implement climate-proofing measures, and embed “resilience thinking” across operations. (Australasian Railway Association)

Adaptation tech is bucking the broader climate venture market contraction, according to a new report out of JP Morgan. 

Early-stage investment in climate risk modeling (US$276mn), weather forecasting (US$23mn), and ecological restoration tech (US$47mn) persisted at similar levels last year as 2024 and 2023, the bank’s data suggests, with money flowing while deal count across the wider climate tech sector fell. Interest in wildfire tech is particularly strong. Thirty-five venture deals in wildfire mitigation software occurred in 2025, and 48 in hardware, up from 28 and 38, respectively, in 2024. JP Morgan pegs wildfire costs to the US economy at up to US$893bn annually when real estate losses, watershed damage, and income effects are included.

The bank adds that AI is helping to buoy adaptech by accelerating the shift from monitoring to action — automating detection, real-time risk assessment and power line surveillance in ways that stretch constrained operational budgets further.

The broader climate tech market logged US$17.6bn in venture investment in 2025 despite deal count falling to its lowest level since 2020. This underlines a concentration dynamic in mature companies and proven ‘winners’ in the renewable energy and grid technology arenas.

Trane Technologies closed its acquisition of LiquidStack, a liquid cooling specialist for data centers, burnishing its reputation as a leader in thermal management solutions. The deal, first announced February 10, adds direct-to-chip and immersion cooling technology to Trane’s existing building and transport climate systems. (Trane Technologies)

Global warming has accelerated significantly (Geophysical Research Letters)

Sea level much higher than assumed in most coastal hazard assessments (Nature)

Climate change will increase forest disturbances in Europe throughout the 21st century (Science)

Critical science for the next decade of climate risk management (Climate Risk Management)

Undamped climate change poses the need for substantial shifts in cultivated crop types in Germany (Scientific Reports)

Relative bulnerability of US National Parks to cumulative and transformational climate impacts (Conservation Letters)

Rising temperatures pose a threat to tropical insects (Nature)

Thanks for reading!

Louie Woodall
Editor