'Thinking beyond ribbon-cutting to resilience... is critical'

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Though June marks the start of hurricane season, climate-related issues impact construction all year. Understanding the connections between weather, climate and your company helps reduce risk and business interruption. We asked Dr. Jeremy R. Porter, head of climate implications research at First Street, what you need to know to manage current and future climate realities. —Margot Lester

Why should construction pros devote focus to climate issues?

Because climate risk is a multiplier. It doesn’t replace other risks, it amplifies them. Labor shortages become more acute during extreme heat. Material costs spike when disasters disrupt supply chains. If climate isn’t factored into strategic planning today, it will be the hidden driver behind tomorrow’s project delays and cost overruns. 

Climate risk is no longer a distant or abstract concern; it’s materially affecting insurance costs, financing terms, supply chains and project viability. For construction firms, especially those operating on thinner margins, climate-linked disruptions like flooding, extreme heat or wildfire smoke can delay builds, drive up costs or even derail projects altogether. Ignoring it puts a firm at serious financial risk.

What's a frequently overlooked climate impact we should watch?

The impact on long-term asset value. A building might be code-compliant and insurable today, but if it's located in an area with rising flood, wind or fire risk, its market value and insurability may deteriorate rapidly. This impacts not only the client’s financials but also your reputation and future opportunities. Thinking beyond ribbon-cutting to resilience and longevity is critical. 

How can we reduce exposure to climate-related financial risk? 

Build for future climate, not just past weather. Start integrating climate data into site selection, project planning and risk assessments. There are now tools, like those provided by First Street, that allow you to assess future flood, heat and fire exposure at the parcel level. Use future climate projections when selecting materials and engineering solutions, too. If you’re bidding on a project or investing in new infrastructure, this kind of foresight can protect your bottom line. Also conduct a climate risk audit across your portfolio or pipeline [to] identify which current or upcoming projects are in areas with high climate exposure. 

Anything else we should know?

Climate risk isn't going anywhere and a regulatory shift is coming at some point. Investors, insurers and government agencies are increasingly requiring disclosure of climate-related financial risks. Construction firms that can demonstrate foresight and climate resilience will be better positioned for contracts, funding and long-term partnerships. It’s not just about risk mitigation, it’s also about competitive advantage.

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The Level is written by Margot Lester and edited by Bianca Prieto.