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Adapting Forward in the Face of Climate Risk
Key Points
- Directors who dedicate time to scenario analysis gain sharper insight into second-order risks, such as supplier vulnerabilities, that traditional planning may overlook.
- Boards should weigh the resilience of employees and communities alongside insurance strategy, asking whether coverage matches the company's true exposure to physical climate risk.
- As energy demand climbs and severe weather intensifies, directors should probe management on grid readiness and infrastructure resilience in the regions where the business operates.
This AI-generated summary, based on content on this page, was reviewed by NACD editors for accuracy.
As climate events such as wildfires and floods grow more costly and frequent, boards can help their organizations anticipate, adapt, and endure.
On Sept. 25, 2024, Hurricane Helene slammed into the southern Appalachian Mountains. Over three days, 20 to 30 inches of rain fell on western North Carolina, where Baxter International operates a manufacturing plant. That facility, which at the time produced 60 percent of the United States’ intravenous (IV) fluid, was shut down because of the inundation.
Baxter spent more than 2.5 million hours on recovery efforts. The company was able to restart all 10 manufacturing lines in January 2025. In February of that year, the organization announced that it restored production capacity to pre-hurricane levels. By May, it no longer had to issue allocations for IV solutions.
By that time, however, the market had shifted. The company reported that the disruption to product delivery caused customers to take steps to conserve supply, which “resulted in, and are currently expected to continue to result in, reduced demand in our intravenous (IV) solutions business and may impact other aspects of our business.”
The financial impact of weather disruption and the changing climate ...
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Stu Dalheim is associate director of corporate governance and sustainability at NACD.
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