The importance of climate resilience
Extreme weather events – whether hurricanes, tornadoes, wildfires or hailstorms – affect various regions across the United States every year, leading to catastrophic and costly outcomes for communities and businesses alike.
The frequency and severity of weather events that cause billions of dollars in damage is trending upward.1 This highlights the urgent need for organizations to develop climate-resilience strategies to respond to extreme weather and minimize the damage caused by such events.
This financial burden is especially felt by small businesses, which often have fewer resources to aid in recovery efforts. Adopting resiliency practices can help businesses of all sizes prepare for, respond to and recover from extreme weather events.
By the numbers
In 2022, the United States experienced 18 billion-dollar weather and climate disasters totaling $165 billion in overall damages.1 Wildfires, droughts, hailstorms, severe thunderstorms, hurricanes and floods led to infrastructure damage as well as fatalities across the country:
- Wildfires—The Western United States experienced another devastating wildfire season in 2022. According to National Interagency Fire Center data, 66,255 wildfires burned 7.5 million acres of land in 2022.2 Experts say climate change is exacerbating fire seasons, with extreme drought and rising temperatures leading to drier forests and an uptick in wildfire risks. The U.S. Drought Monitor reports that extreme conditions are more pervasive than ever in the past two decades, heightening the likelihood of widespread wildfires.3 Per the National Interagency Fire Center, the top five most at-risk states (based on the number of fires) include California, Texas, North Carolina, Montana and Florida.4
- Droughts and heatwaves—Widespread drought and heat waves contributed to the depletion of several large reservoirs in 2022, leading to over 100 fatalities and at least $9 billion in damages. Not only was the average annual temperature in the United States 1.4 degrees Fahrenheit higher than the 20th-century average, but precipitation for the year also totaled 28.35 inches, placing it in the driest third of the climate record.5 Nebraska and California experienced their fourth and ninth driest years on record, respectively.
- Tornados and windstorms— In 2022, there were 1,331 reported tornadoes in the United States.6 The costliest tornadoes – striking Iowa and Michigan– together caused a little over $270 million in damages as well as eight fatalities and 49 injuries.7 Beyond these storms, strong winds and hundreds of tornadoes also damaged buildings across other states, resulting in over $10 billion total in losses
- Hailstorms—The Midwest was hit by a series of severe hailstorms and a powerful derecho—a widespread, long-lived and straight-line windstorm associated with a band of rapidly moving thunderstorms. Together, these storms caused over $5 billion in damages.
- Hurricanes—The 2022 Atlantic hurricane season saw 14 named storms, eight of which were hurricanes. Hurricane Ian made landfall as a Category 4 hurricane in Florida, causing fatalities, severe property damage and widespread flooding throughout the state. The storm then weakened and re-emerged as a Category 1 hurricane in South Carolina, causing significant coastal flood damage and destroying several piers. Hurricane Ian resulted in 131 fatalities and is expected to cost $53 to $74 billion in insured losses.1
- Floods—Another notable event was the historic flooding in Kentucky and Missouri caused by a stalled frontal system in late July, leading to thousands of damaged properties, vehicles, and infrastructure. The flooding caused 42 fatalities and over $1 billion in damages.
In total, global insurance losses for natural catastrophes in 2022 are projected to reach $112 billion. As these weather-related disasters become more frequent, the insurance industry must adopt innovative solutions to keep up with losses. As a result, businesses can expect insurers to emphasize weather readiness moving forward.
Preparing for severe weather
Extreme weather events are becoming increasingly frequent and severe, and we’ve already seen several billion-dollar events in 2023. These events can cause significant damage to businesses, including property damage, supply chain disruptions and revenue losses, making it more important for companies to build resilience to extreme weather into their operations.
Nationwide has resources that help businesses address the specific risks they face. Loss control materials on mylosscontrolservices.com can be shared with customers to help them learn more about severe weather events, prepare for emergencies, and establish business continuity plans.
Nationwide’s approach to climate resilience
At Nationwide, our approach to climate resilience involves:
- Advocating for climate-resilient building codes and standards—Nationwide supports the adoption of building codes and standards, strong local enforcement of the codes, and training and licensing of building officials, builders, and contractors. Building codes and standards developed with climate risks in mind can help ensure that residential and commercial properties are built to withstand natural disasters more effectively.
- Partnering with industry-focused organizations—Nationwide is committed to partnering with organizations focused on addressing climate risks and supports the Insurance Institute for Business & Home Safety’s efforts in developing new programs and guidance aimed at addressing structural resilience.10
- Focus on corporate sustainability—Nationwide is committed to protecting people and property. Our position as a mutual company enables us to take a holistic approach and serve communities in many ways. Our corporate sustainability efforts focus on the needs that affect our business and the communities where we live and work. These efforts include reducing harmful actions to the environment.9
- A commitment to environmental sustainability—Nationwide invested $688 million in sustainable debt instruments in 2022, promoting environmentally sustainable outcomes and supporting efforts related to climate change mitigation. What’s more, Nationwide invested $108 million in renewable energy in 2022. 12
- A focus on reducing our carbon footprint—We have reduced our carbon footprint by 41% per square foot compared to our 2010 baseline through actions such as installing LED lights and efficient heating and cooling systems.
To learn more about Nationwide’s approach to corporate sustainability, please review the annual corporate sustainability report.
Includes general account assets for the Nationwide companies and assets managed by Nationwide Asset Management LLC, a wholly owned subsidiary of Nationwide Mutual Insurance Company.