To address growing climate risks, businesses will have to set aside an increasing share of their cash flows. Hurricanes, wildfires, and the rise in sea levels impose costs on firms, both in preparation and response to these disasters. As the risks grow, those costs are only going to increase over time.
Risk management can help minimize the cost of climate change. Robust risk management strategies layer financing tools — insurance, reserving, and borrowing — to address different aspects of the risk. Doing so facilitates recovery by providing businesses the funds…
