Market Insight: State Of The Climate Risk Market
Emma Cutler
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Executive Summary
Regulatory rollbacks in the EU, the US and beyond are shaking up the climate risk market. Growth is slowing – albeit partially offset by the response to worsening physical risks. As damages related to extreme weather events rise, climate threats are moving to the forefront of risk management priorities, initiating a shift in the wider market. Historically, reporting has been the strongest market driver; while disclosures remain an important use case, buyers will begin to seek solutions that offer not only reporting capabilities, but actionable physical risk information.
Figure 1. Divestment from ESG and climate risk spend has the largest impact in Latin America and Europe
Figure 2. ESG/climate regulations are most significant in the mining, metals and minerals, hospitality and entertainment, and agriculture sectors
Figure 3. Extreme weather events are of greatest concern in the agriculture, business services and utilities sectors
Figure 4. Extreme weather events occurred in all regions in 2024
Figure 5. At least 59% of respondents describe severe weather as significant (or more), in terms of increasing spend
Figure 6. In 2024-25, respondents’ expectations for increasing spend on climate risk software shifted downwards
Figure 7. Respondents from Asia expect the greatest increase in spend on climate risk digital solutions
About the Authors
Emma Cutler
Principal Analyst
Emma is a Principal Analyst at Verdantix, with a current research agenda focusing on solutions for climate risk management. She has a background in simulation and statistical ...
Katelyn Johnson
Senior Manager
Katelyn is a Senior Manager at Verdantix, specializing in enterprise risk management and external risk and resilience. She helps executives navigate today’s evolving ris...
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