Managing Asymmetrical Risk: A Strategic Conversation on Planning for Adaptation

How can we prepare our businesses for a 2.5°C warming world? 

This is the question that Sanjeev Krishnan and I posed to a group of investors, innovators, academics, and business leaders in a strategic breakout session on ​“Managing Asymmetrical Risk” at our recent S2G Summit. 

Building on this year’s theme, ​“The Age of Adaptation,” this session facilitated a dialogue about the converging forces reshaping how leaders must think about global risk. Our goal was to force a reckoning with just how difficult, but necessary, it is to make a plan for strategic decisions with imperfect information and adapt under uncertainty.

We presented participants with a black swan climate event and asked them to react to the cascading effects, including rising insured and uninsured economic losses, changes in costs and availability of commodities, and the emergence of new trade routes, from the perspective of various personas, from government officials and financial institutions to multinational logistics providers. 

We briefed participants on recent data and trends on macro forces that might play out further in the scenario and had the opportunity to hear insights from two industry experts. Dr. Sarah Kapnick, Global Head of Climate Advisory, Commercial and Investment Bank, JP Morgan, spoke about ​“Climate Volatility and Strategic Preparedness” and shared excerpts from her recent Climate Intuition research. Parag Khanna, founder and CEO of AlphaGeo, spoke about ​“The New Map: Geopolitical Flux and the Fragmented Global Economy,” including shifting global alliances, China-Taiwan tensions and labor migration.

Through scenario-based small group discussions, we pushed our guests to stress-test assumptions, explore consequences, and surface insights that we hope will improve their future preparedness, resilience, and planning in their businesses. 

Dialogue amongst the group surfaced key insights:

Systemic Risk Lacks Systemic Response

Despite the scale and complexity of the crisis, participants overwhelmingly defaulted to siloed, persona-specific responses — whether as corporations, sovereign wealth funds, or national governments — rather than engaging in coordinated, multi-level planning. The session revealed a glaring absence of frameworks to align capital, policy, and strategy across jurisdictions, especially in shared-risk geographies like watersheds or transboundary biomes. Most actors prioritized preserving their own assets, infrastructure, or national security interests, with limited attention to humanitarian coordination or the needs of vulnerable populations. This pragmatic but narrow adaptation approach emphasized institutional continuity over collective welfare, underscoring a systemic failure to respond to risk.

Migration and Resettlement Are Central but Undervalued Strategic Levers

Several groups — including those representing Sweden, Turkey, the Bahamas, and the U.S. — engaged deeply with climate-driven migration, discussing policies ranging from reverse migration to refugee integration and climate resettlement incentives. The Bahamas group proposed a provocative ​“climate exchange” model tied to food and labor security, while Turkey explored how to attract both people and capital. These ideas reflected a growing recognition that migration is both a risk and an opportunity — and that forward-thinking countries may turn demographic shifts into resilience strategies.

Resilience Is Unevenly Distributed

Participants observed that multinational energy and chemical corporations were among the best-positioned personas in the game, able to deploy capital, build resilience in existing infrastructure, and capitalize on newly available Arctic resources. In contrast, insurance companies were seen as the worst positioned, with traditional models breaking down under extreme risk and unpredictability — driving discussions around event-based and parametric insurance models as potential adaptations. These reflections underscore the asymmetrical nature of climate risk, where some actors profit while others face existential threats.

Innovation Must Be Matched by Scaled Deployment

While technological innovation — particularly AI, predictive analytics, and clean energy — is accelerating, participants noted a critical gap between invention and implementation. Deployment bottlenecks in regulation, policy, capital access, and infrastructure prevent these tools from translating into systemic resilience. Several participants noted that innovation is a supply-side strength, but resilience requires demand-side enablement, rapid deployment, and equitable access. Without this, innovation risks triggering backlash or deepening inequality rather than delivering shared adaptation.

Systemic Resilience Requires Localization + Collaboration

Building resilience in a complex adaptive system means balancing localization with global interconnectivity. Participants emphasized the need to reduce dependence on vulnerable global supply chains — particularly for food, energy, and technology — while retaining selective global linkages for flexibility during localized disruptions. Achieving this requires regional circularity, soft diplomacy, and public-private coordination, with an emphasis on human behavior and coalition-building as the true constraints, not just science or technology.

While we didn’t leave our session with all the answers to the complex question of how to prepare for a world of 2.5 °C degrees of warming, this exercise has made clear that climate adaptation isn’t a distant concern but a material risk management decision today. The cost of inaction is growing, and it is critical to build resilience into our strategies now, as we may not have viable options later. 

Given the urgency of this topic to business leaders across our ecosystem, we are sharing excerpts from the briefings covered in this session to spur the continued dialogue needed to adapt for the future. Adapting to the dynamics of today’s environment will require ongoing collaboration and thought partnership. Connect with us to continue this important dialogue.

See More in the Session Recaps

Managing Asymmetrical Risk with Kate Danaher

Climate Volatility and Strategic Preparedness with Dr. Sarah Kapnick

Geopolitical Flux and the Fragmented Global Economy with Dr. Parag Khanna