CDP has published analysis of 2025 environmental disclosures showing that extreme weather is already generating material financial losses but remains under-recognized by many companies. Among 11,261 companies that disclosed full environmental data, only 35% identified extreme weather as a material financial risk, yet they reported nearly US$3 billion in losses in 2025 and expect US$898 billion in future financial impacts. Almost half of the reported risks, 48%, are expected to materialize within the next two years, placing them within current investment, operations and risk management horizons. Reported 2025 losses were driven mainly by increased direct costs of US$309 million and operational shutdowns of US$266 million, with heavy rain accounting for US$1.5 billion. Expected future impacts are led by flooding at US$528 billion, cyclones at US$161 billion and heavy rain at US$86 billion, while reduced production capacity at US$326 billion and asset impairment or early retirement at US$218 billion are the main channels of loss. CDP also points to a lower cost of mitigation, citing median risk costs of US$39.4 million per company versus US$3.1 million to mitigate them. On the public sector side, 62% of 1,005 reporting cities, states and regions across 80 countries said they are already significantly affected by extreme weather, more than 60% have at least one adaptation project needing additional funding, and the reported investment gap totals at least US$34 billion. The report calls for companies to treat extreme weather as a system-level business risk, for subnational governments to disclose where hazard exposure, infrastructure risks and service disruption intersect, for national governments to align fiscal, adaptation and risk management policies around shared exposure, and for regulators and central banks to use supervisory tools to address systemic financial risks such as uninsured physical risk.
CDP 2026-05-12
CDP analysis finds only 35% of companies identify extreme weather as a material risk despite US$898 billion in expected impacts
CDP’s analysis of 2025 environmental disclosures finds extreme weather is already causing material financial losses but is under-recognized, with only 35% of 11,261 companies identifying it as a material risk despite reporting nearly USD 3 billion in losses and USD 898 billion in expected future impacts. Almost half of reported risks are expected to materialize within two years, mitigation costs are significantly lower than projected risk costs, and subnational governments report adaptation funding gaps of at least USD 34 billion. CDP urges companies, governments, regulators and central banks to treat extreme weather as a system-level financial risk and align disclosure, fiscal, adaptation and supervisory policies.