Climate Volatility and Strategic Preparedness

At the 2025 S2G Summit, Dr. Sarah Kapnick spoke with Kate Danaher about climate destabilization and the financial case for adaptation. Below are the key highlights from their conversation. 

The Atlantic Ocean Conveyor Is Already Slowing With Real-Time Impacts

Dr. Kapnick emphasized that the AMOC is already weakening. She argues that it isn’t theoretical and is causing increased flood days on the U.S. East Coast and contributing to sea level rise. A full collapse would drop European average temperatures by 10 – 15°C, reshaping agriculture, energy demand, and infrastructure requirements. The conversation framed AMOC destabilization as an urgent, unfolding disruption with sweeping implications for economic and climate systems alike. In reality, Kate and Sarah discuss that the destabilization of AMOC is a near certainty, but it will happen over time.

Businesses Are Still Behind on Climate Adaptation Despite Rising Risk

While utilities have led on climate risk planning (spurred by disasters like PG&E’s bankruptcy), most sectors are still reactive, often paralyzed by uncertainty and recency bias. Dr. Kapnick identified four behavioral profiles: early adapters, cautious incrementalists, procrastinators, and those requiring perfect certainty, who often act too late. Strategic action is often delayed until after a major event or when investor or market pressures force a change, revealing a dangerous gap between climate science and corporate risk planning.

Adaptation Carries Strong ROI, But Market Signals Lag

The financial case for adaptation is growing stronger, with estimated returns of $2 to $43 for every $1 invested. However, companies often treat adaptation as a sunk cost due to the lack of immediate market recognition or standardized frameworks for measuring return. Kapnick pointed to emerging global assessments showing over $1 trillion in projected annual losses for major companies by 2050 if adaptation is ignored. She stressed that beyond avoiding losses, adaptation presents a strategic opportunity to lead in resilient infrastructure, supply chains, and product design.