In 2025, as the United States grapples with escalating climate challenges like record-breaking hurricanes, wildfires, and droughts, businesses are under immense pressure to build resilience. Extreme weather events have already cost the U.S. economy over $165 billion in damages in 2024 alone, and projections for 2025 suggest even higher insured losses, potentially reaching $145 billion globally. Yet, many companies struggle to adapt, facing hidden barriers that go beyond obvious risks like storms or floods. A recent report from Insurance Business America highlights these obstacles, drawing on insights from experts like Lars Regner, head of resilience services at HDI Global. This article explores these barriers and provides practical steps for U.S. companies to overcome them, ensuring long-term survival and growth in a warming world.
Why Climate Resilience Matters for U.S. Businesses in 2025
Climate resilience isn’t just about surviving disasters—it’s about thriving amid uncertainty. The World Economic Forum warns that climate-related risks could disrupt supply chains, increase operational costs, and erode profits if ignored. In the U.S., where hurricanes like those forecasted for the 2025 season could be more intense due to warmer oceans, businesses in sectors like logistics, energy, and agriculture are particularly vulnerable. Proactive measures, such as using weather intelligence tools, can protect operations and even create competitive advantages.
Experts note a shift in awareness. Five years ago, only 10-15% of companies prioritized climate risks; today, it’s closer to 40-50%. Sustainability officers now often have dedicated budgets for risk mitigation, driving action. However, hidden barriers persist, delaying progress. Overcoming them requires a mix of internal changes, data-driven strategies, and external partnerships.
The Hidden Barriers to Building Climate Resilience
Many barriers are subtle, stemming from mindset, resources, and external factors. Here are the key ones affecting U.S. companies:
- Perception of Climate Risk as a Future Problem:
Many firms view climate change as a distant threat, leading to procrastination. Regner explains, “Some companies simply say, ‘this is tomorrow’s issue.’” This mindset ignores current realities, like the 2024 wildfires in California that disrupted tech supply chains or floods in the Midwest affecting agriculture. Delaying action exposes businesses to immediate financial hits, with uninsured losses rising. - Budget Constraints and Internal Resistance:
Budget sensitivity is a major internal hurdle. Companies often prioritize short-term profits over long-term resilience investments, especially in a high-inflation environment. Small and medium-sized enterprises (SMEs) face this acutely, lacking resources for upgrades like flood-resistant infrastructure. A UNEP report estimates the global adaptation finance gap at $187-359 billion annually, highlighting funding shortages. - Lack of Reliable Data and Forecasting:
Access to accurate climate data is eroding due to budget cuts at agencies like NOAA, making it harder for companies to predict risks. Regner notes, “It’s difficult to say exactly how much funding has been withdrawn,” but restrictions on data for non-U.S. users complicate global operations. Private tools are emerging, but their reliability varies, affecting long-term planning for facilities and supply chains. - Policy and Regulatory Variations:
Inconsistent policies across states and federally create confusion. For instance, while California mandates climate disclosures, other states lag, influencing business priorities. Regner points out that in some regions like Germany, climate isn’t policy-heavy, yet businesses adapt out of self-interest. In the U.S., this patchwork can deter unified action. - Investor and Stakeholder Pressure:
While often a driver, intense scrutiny can overwhelm companies without clear strategies. Investors demand risk analyses, with regulators in Europe and the Middle East requiring them for approvals. Regner says, “As soon as investors are involved, the pressure increases. They want to see how their portfolios are exposed.” This can barrier smaller firms lacking expertise.
Other barriers include supply chain fragility, cybersecurity tied to AI risks, and workforce disruptions from extreme weather. Social and institutional factors, like community resistance or lack of skilled workers, also play roles.
How Companies Can Overcome These Barriers
The good news: These barriers are surmountable with targeted strategies. Drawing from experts and successful examples, here’s how U.S. businesses can act:
- Shift the Mindset to View Risks as Immediate:
Start by educating leadership on the cost of inaction. Regner advises early movers are “more successful in the long run, financially and operationally.” Use tools like climate risk assessments to quantify threats. For example, a 17th-generation German family business assessed risks to protect employees, inspiring similar U.S. firms like those in manufacturing. Integrate adaptation with net-zero goals for holistic planning. - Address Budget Issues Through Smart Financing:
Partner with insurers, governments, or investors for funding. Oliver Wyman suggests insurers scale impact by offering incentives for resilient practices. SMEs can collaborate with others for cost-sharing, like joint supply chain mapping. Seek adaptation finance; the UNEP gap shows opportunities in public-private partnerships. Prioritize high-ROI measures, such as efficient air conditioning for heatwaves. - Secure Reliable Data and Build Forecasting Capabilities:
Turn to private providers for site-specific risk info. Regner recommends finding “reliable providers who can give them sound risk information for their specific sites.” Use AI-driven tools from firms like Climate AI to predict impacts and turn risks into opportunities. Advocate for better public data funding to close gaps. - Navigate Policies with Proactive Compliance:
Act beyond regulations, investing in protection as self-interest. Regner sees this as positive: “Awareness leads to investment, and investment leads to resilience.” Align with federal initiatives like New York’s statewide plan, which strengthens existing efforts. Engage in advocacy for consistent U.S. policies. - Leverage Investor Pressure for Action:
Conduct thorough risk analyses to meet demands. Regner notes this forces quantification of “value at risk,” attracting capital. Use frameworks from Wellington Management to enhance operations and systems resilience.
Additional tips: Redesign infrastructure for extremes, map supply chains for redundancy, plan for workforce safety during heatwaves, and manage reputation by avoiding high-risk areas. Everbridge recommends updating business continuity plans and exploring insurance for disruptions.
Challenges and Future Outlook
Overcoming barriers isn’t easy; economic volatility and political debates over DEI and climate policies add complexity. Yet, resilient companies could save billions, with adaptation investments yielding high returns. By 2030, climate risks may cost $5 trillion annually globally, but early adopters like those using drought-resistant tech will thrive.
In the U.S., state plans like New York’s offer models, but businesses must lead. As Regner says, “Know your risk” is the first step.
Conclusion
Hidden barriers like delayed perceptions, budget limits, and data gaps are holding U.S. companies back from climate resilience, but with strategies like early assessments, partnerships, and data tools, they can overcome them. In 2025, as hurricanes loom and regulations tighten, proactive firms will not only survive but gain edges. Businesses should start today—mapping risks, securing funds, and building adaptable operations—to secure a sustainable future.