I'm Lindsay Hall. And I'm Esther Wielden. Welcome to All Things Sustainable, a podcast from S&P Global. As your hosts, we'll dive into all the sustainability topics that are reshaping the business world. Join us every Friday for in-depth analysis and interviews with leaders from around the globe. Together, we'll break down big sustainability headlines and cut through the jargon. On this podcast, we often hear how climate change is driving more frequent and severe extreme weather events. And that poses a risk to economies, businesses, and communities. In March, a report came out tallying the biggest weather and climate-related disasters in the U.S. in 2025, as well as broader trends across the country from 1980 through 2025. The report focused on events that each caused at least $1 billion in damages. And as we'll hear, these billion-dollar disasters are growing in frequency and cost. Now, we've covered U.S. billion-dollar disaster reports on this podcast in the past, but this year the situation is a bit different. The billion-dollar disasters report and its related historical database were previously developed and published by the National Centers for Environmental Information within the U.S. National Oceanic and Atmospheric Administration, or NOAA. But in 2025, the agency discontinued the research. And instead, Climate Central picked up the baton for gathering the data and publishing related research. This is a nonprofit composed of climate scientists and communicators, including some former NOAA staff. Today, we're going to hear from former NOAA staffer and current lead scientist for the billion-dollar weather disaster research program at Climate Central, Adam Smith. In addition to sharing the findings of the report, we'll hear Adam describe some challenges in gathering data and how the program is evolving going forward. Adam mentions the Fifth National Climate Assessment. This is a congressionally mandated interagency climate analysis that the U.S. government publishes every four years. The Fifth National Climate Assessment was published in November 2023. We'll include a link in our show notes in case you'd like to listen to our podcast episode about the Fifth Assessment. Okay, here's Adam, who starts off by describing his role at Climate Central and his background. I am Climate Central's senior climate impact scientist, leading the redevelopment of the U.S. billion-dollar weather and climate disaster research program. And I've been bringing two decades of experience from NOAA, NOAA's National Centers for Environmental Information. In 15 of those 20 years, I actually led the research program for NOAA's billion-dollar disaster analysis and also served on many international and interagency disaster teams doing research and analysis and setting different national and international standards. My background is meteorology, climatology, and economics. And the reason this is now at Climate Central is that just the changes in the scientific landscape, I had to kind of explore my career and make a choice on what I was going to try to focus on over the next several years. And Climate Central is just a wonderful place with a great mission and focus to continue this research. And as I understand it, NOAA decided to discontinue doing the research, correct? That is correct, yes. I think it's perhaps part of a lot of different research programs or reports or activities and data sets that are in a strange time, I guess, to say right now. But I think at the end of the day, it's important to keep the science and communication of this data and information moving forward. We'll dig into this a little bit later on, but I am curious how much things are different now that the research is not housed at NOAA anymore. Yeah, so it is an apples to apples continuation of the same research with the same data partners from the public and the private sector, the same asset classes we're analyzing in the same different hazards and perils. So we've maintained a homogeneous transition from the federal research at NOAA now to Climate Central, and that was really the goal. What factors do you include in the calculation of costs for determining whether events reach that billion dollar threshold? More than a dozen public and private sector data sources help us capture the total direct losses, both insured and uninsured of these different weather and climate hazards. And these costs include the physical damage to homes, businesses, government buildings, the contents within those buildings, even time element losses such as business interruption or loss of living quarters when you're home or businesses being repaired or rebuilt. It also includes damage to vehicles, boats, public assets and infrastructures such as roads, bridges, levees, electrical infrastructure and offshore energy platforms that are damaged or put offline when hurricanes come through. Agricultural assets, including crops, livestock, commercial timber, and the wildfire fighting suppression costs are the core assets we've captured since 1980. However, equally important, we do not account for losses to natural capital or environmental degradation, mental and physical health care related costs or the value of a statistical life or the supply chain ripple effects, the contingent business interruption outside of a hazard region. So our estimates should be considered comprehensive with respect to the data that's consistent over space and time, but conservative with respect to what is truly lost but cannot be completely measured. So let's turn to your findings. What are some of the key takeaways from this report in terms of both 2025 and then broader trends you've observed? So we found that during 2025, there were 23 individual weather and climate disasters with at least a billion dollars in damage each. This was the third highest count of these billion dollar disasters. Inflation adjusted to present day dollars since 1980 and the count of the 23 events from last year only trailed what occurred in 2023 and 2024 with 28 and 27 events respectively. So you can see the last three years had the highest count of these billion dollar disasters. And in terms of trends, 2025 was the 15th consecutive year that had at least 10 or more of these billion dollar disasters somewhere around the nation. In terms of cost, these 23 events last year was approximately at 115 billion dollars in damage with hundreds of direct and indirect fatalities. Maybe one of the few silver lions was the absence of landfall in Hurricanes in 2025 for the first time in a decade, which kept the total cost for the year out of the top five because of course Hurricanes are the most costly type of event we analyze. But zooming back out costs have increased over time given our combination of our increased exposure or vulnerability to these extremes and the influence of climate change. And finally, I would say over the last decade, we find the United States has been impacted by 202 separate billion dollar disasters that have killed more than 6,500 people and have cost more than 1.5 trillion dollars in damages. So if I'm understanding what you're saying, right, these events are happening more often and getting more expensive. That's right. There are a lot of factors that go into that as far as explanations for the trends, including increased exposure. People like to live in harm's way, whether it's in a flood plain, in the wildland urban interface, along the coast. So this puts more assets at risk and increases our vulnerability to when hazards and extremes do come through. The intensity, such as high winds or the flood depth, can exponentiate costs of these extremes. And of course, the increase in frequency and intensity of some of these extreme events are also amplified or supercharged due to climate change with more energy in the atmosphere and more energy in the ocean to transfer itself into extreme outcomes. So what implications can we glean from this? We know that extreme events will continue to happen and we need to learn from them. We need to understand the data, the processes that happened during the disaster from the built environment and the human environment and import that analysis into our planning, whether it's our exposure, our building codes, to add resilience and sustainability to our built and human environments. And the result will be we're better prepared in the future to minimize the loss of life and property from these different extremes. So what was the most expensive event last year and what role did climate change play, if any? The LA Wildfires were the most expensive event last year and were the first billion-dollar disaster of 2025. Across the Southwest, wildfires have become larger, more frequent, and in many areas, more severe with a clear influence from human-caused climate change. Climate change may not be responsible for a tall cigarette, a campfire, going out of control or a downed power line that causes one specific fire, but certainly contributes to the environmental conditions that help turn a small fire into a much larger event. Hot dry conditions can, of course, rapidly dry out grasses to provide ample fuel. And counter-tutorily, heavy rains can make these grasses or fuels on the ground grow much more rapidly. So it's kind of a hydro whiplash between drought and wet conditions. And so humans continue to also expand into areas more prone to wildfires, particularly in the West and the Southwest. And so we're playing a risky game. Adam just noted that the LA Wildfires were the most costly disaster in the US in 2025. We did a podcast episode last year exploring how climate change contributed to the wildfires being so destructive. We'll include a link in our show notes in case you'd like to take a deeper dive. Adam also said that one factor driving up the annual total costs of extreme weather disasters is that people are choosing to build and live in disaster-prone areas, places like flood plains and coastlines, which puts more assets at risk when extreme weather events do occur. I asked Adam, what can be done about this challenge? Here's what he said. Well, I think on the geographic scale, you can locally understand your history and what types of extremes, what magnitudes have happened historically to give a sense of possibility. But of course, we see records constantly broken for many different hazards across many parts of the nation every year. So that's just a starting point. But also more structural changes like improving building codes, whether it's a retrofit or in new development, which places like Florida after Hurricane Andrew happened in the early 90s, they changed their building codes and have their buildings, they're more rigid to the effects of hurricanes and more resilient as far as the wind. And so I think other parts of the nation, other places could look to add more resilience, do some cost-benefit analysis to see what the trade-offs are. But it seems like the data are showing how there's value to be had in strengthening your infrastructure before, during, and after extremes because they will continue. Now, the report mentions an increasing potential for compound events with cascading impacts. Can you describe what that means and the implications? Yes. So compound extremes is just one way of saying how any multiple set of events can occur, can overlap in the same space, time, or in sequence. When that happens, and we're seeing that happen more frequently in different parts of the nation for different perils, it impacts recovery timelines and costs. As noted in the fifth national climate assessment published several years ago, climate change is also increasing the risk of multiple extremes occurring simultaneously in different locations that are connected by complex human and natural systems. And that's exactly what we see. For instance, simultaneous mega fires across multiple western states would have happened in recent years or back-to-back Atlantic hurricanes that have happened in 2020, 2022, 2024, or even numerous tornado outbreaks where other severe weather that overlap weeks apart, which increases demand on emergency response and recovery for local, state, and federal resources. And we see it in other types of measurements as well. For example, if you looked at the frequency of these billion-dollar disasters in the 1980s, we would go roughly three months between a disaster. Over the last decade, we're averaging only about 16 days between these disasters in a couple of weeks. So these shorter time intervals mean less time and resources available to respond, recover, and prepare for future events. One thing that occurs to me in looking at this data set is these are the biggest events, right? These are the most expensive events that happened that hit that billion-dollar threshold. But to what extent does that leave the picture of other events out of it and create a perspective of missing how many things actually happen? Yeah, that's a great question. So yeah, these billion-dollar disasters from an economic point of view are the tails of the distributions where insurance, reinsurance, financial groups, anyone with any risk, which is all of us, these are the events that you don't want to happen, but of course they do. And historically, they represent about 80% of the full-cost distribution at all scales and all loss levels for these same types of disasters across the nation. So they do drive the losses in terms of economics. And as we move forward in the decades, the 80s, 90s, 2000s, 2010s, and now the 2020s, we see every decade maybe 1% to 2% more added to that kind of a perator distribution, the 80-20 distribution. But on the other hand, from understanding risk and understanding history, it's important to quantify the smaller and medium-sized disasters. So whether it's a $100 million disaster or a $500 million disaster. And that's actually what we're doing this year. Over the next several months, we have a project to do just that, a reanalysis back in 1980 down to the $100 million level for all the same hazards for the full nation. And so I think that'll add more scope and depth to this analysis. And you can ask more contextual questions after we finish that research. That's interesting. I imagine that will be a lot of data to capture. Yes. It's by far the biggest research project we have this year. And it's pretty ambitious. But we have a few other research projects as well, as far as looking at individual wildfire economic analysis, as opposed to aggregating them into a wildfire season, which we had done at NOAA. We're kind of taking a different approach there. And also in terms of severe convective storms, which are tornado or hail or high wind or ratio type events, we're going to partition those into the primary versus secondary drivers in terms of the impact, doing a reanalysis on those as well. So it's certainly going to be a busy year, but I think we're doing types of research that will help others better understand their risk. Adam said the next year he wants to take a deeper dive into severe storm events to understand which aspect of a storm caused the most damage. I asked him to explain that plan in a little more detail. Here he is. Yes. Severe convective storm events can include any combination of tornadoes, hail or high wind from thunderstorms, including larger scale events like a derecho. A derecho is a line of intense long lived thunderstorm winds that go over hundreds of miles, like the one that hit downtown Pittsburgh in late April last year, shattering windows and skyscrapers. So there are different types of hazards within an overall system. And looking at data, for example, from NOAA's Storm Prediction Center or Storm Events Database or other types of radar or other informative data sets, we can better define what was a primary versus secondary drivers for damages. We have not started that yet and we may run into some issues to try to do this research, but it's a type of research project we want to explore more deeply, but just to add some granularity and context to these events. Because severe convective storm events are the most frequent billing dollar disaster that often impact all the eastern two thirds of the United States. And one of the things that occurs to me is my understanding is in the past tornadoes haven't necessarily been attributed to climate change, like the increase in tornadoes versus extreme winds or other things. So would that also help with attribution to whether it's tied to climate change or not if you're able to break it out? So a lot of these projects that we're developing and enhancing with the billing dollar disasters will hopefully feed into other climate central research initiatives such as the attribution science team or climate matters or climate local programs. And we know generally that attribution science has come a long way in a very short amount of time. We've gone to the days where we say we can't attribute any event to climate change because we can in fact say how much climate change is influencing all sorts of events like heat waves, extreme rainfall events, even tropical cyclones. However, not all events can be attributed with the same level of confidence. And one good example of that would be severe storms or tornadoes. We do know that as our climate continues to warm, certain conditions favorable to thunderstorms and tornadoes are occurring more often. And severe weather activities is expanding into historically less active areas or seasons. However, given this variability with tornado occurrences year to year and over time, it's harder to quantify and attribute individual tornado events to climate change. But with that said, we often can talk about climate change influencing the ingredients of severe weather that can cause tornadoes. For instance, increases in warm, moist air that of course doesn't guarantee that a tornado or even a severe weather event would form, but in individual cases could provide some insight into climate change's influence. But extreme event attribution research shows that human cause climate change is certainly increasing the frequency and intensity of certain events that some of these tied to billion dollar disasters such as the rise in vulnerability to drought, often the West, lengthy wildfire seasons also in the West, extremely heavy rainfall becoming more common in the central and eastern states or sea level rise, worsening hurricane storm surge flooding. So given those trends, it's likely that human cause climate change is influencing the rising costs of billion dollar disasters. The Trump administration in 2025 made major cuts to staffing at a number of federal agencies and has also withdrawn the US from the Paris Agreement on Climate Change and rolled back regulations and findings aimed at curbing greenhouse gas emissions. The government has also gone through some temporary partial shutdowns in 2025 and 2026 as lawmakers hashed out deals to fund the government. Given that the billion dollar disasters research relies in part on data from federal agencies, for example, from the Federal Emergency Management Agency or FEMA, I wondered how this impacted data gathering for the billion dollar disasters report. Here's what Adam said. I would say that there are now longer periods of time between data updates for certain data sets, some of them at NOAA, some of them at FEMA, which can impact our timelines for doing this analysis. This may result from various government shutdowns or even fewer people to maintain certain data sets. It's still manageable what we're trying to do and we hope that these delays become less frequent and more of the norm we're used to. I was surprised to see that the central Texas floods in Hill Country in July of last year didn't reach the billion dollar impact threshold. Was that impacted at all by the ability to gather data from those agencies or other sources? Do you think there's a chance that it surpassed billion dollars but it just wasn't necessarily measured? No, it wasn't the data latency from different public or private data sets for that particular tragic event, the central Texas floods in July. It was greater than half a billion in damage, maybe closer to 750 million in damages. There still may be a little data latency out there that we haven't been fully accounted for but I think that largely the physical exposure in the somewhat limited multi-county region where the flooding was a lack of a large amount of physical exposure to the floods. However, yes, the mental and physical health care related costs or the statistical value of loss of life are examples of metrics that we've never incorporated into this analysis that would of course amplified the cost of that event if that was part of our analysis. This is another area of future research that we want to explore to more comprehensively assess not just the built environment but also of course the equally or more important perhaps the human environment impact the lives and livelihoods and sadly sometimes the loss of life. Earlier, you mentioned that hurricanes or tropical storms are the most expensive. Can you give us a sense of the ranking of the different types of events and why they fit where they do on cost or impact? Yes, so tropical cyclones have cost the most damage from 1980 through 2025 exceeding 1.6 trillion in damage which is roughly half of the total damage cost that we've assessed in the database over time. Of course, severe convective storms is the most frequent event in aggregate even though they're smaller on average cost wise. They add up to quite a bit more than half a trillion in damages from tornado hell and high wind damage over the last several decades. Even drought, droughts hundreds of billions of dollars of damage due to the heat stress and the loss of water that impacts largely the American agricultural sector but even loss of hydropower or sometimes when the Mississippi River is in a low flow status and interrupts commerce which has happened several times. Those are types of things we capture. But really across the board maybe with the exception of crop freeze events we're seeing a rise and the frequency and the cost of these different weather and climate streams and so we must learn from them and implement what we learned to harden their infrastructure and make ourselves more resilient. Why do you think crop freeze events are not increasing? Well, if you look at the statistics of how many really almost anywhere in the United States over time the number of heat hot days versus cold days or record hot days versus record cold days it's a growing ratio disproportionate to many more hot days versus fewer cold days. Of course ironically I say that because Florida actually had a major crop freeze about a month ago which may in fact be a billion dollar disaster. But looking from 1980 to present we have seen fewer crop freeze events and there may be a mitigation component to that too because again farmers or other in the agricultural sector understand how to see the weather track it very closely and implement different strategies to minimize damage as best they can. Yeah, I think that's fair. As a gardener just in my backyard kind of gardener I have learned so much about the weather because you really have to watch it especially in the spring and in the fall. You mentioned some of the trends that you're seeing regionally over time. Are there any other regional trends that you think businesses or people should be aware of? In a macro perspective the southern central and southeastern regions of the US including some of the Caribbean territories like Puerto Rico have suffered a high cumulative damage cost and frequency of these different events. And of course this highlights the combined exposure and vulnerability to a wide range of costs to weather and climate hazards. Also in terms of recent trends the US mainland has been impacted by land falling category four or category five hurricanes in six of the last nine years. This includes hurricanes Harvey, Irma, Maria, Michael, Laura, Ida, Ian and Helene. In 2025 there were three category five hurricanes that formed in the Atlantic basin the highest number of category five since 2005 the year of Katrina but luckily none of those made landfall. Also you could look at it in a different lens. You could see how the United States in general has a tell two seasons where in the spring we have a lot of severe convective storm activity just like right now which is ramping up and we also have sometimes flood events whether it's a wide scale long river flooding event that we've had in multiple over the last several decades or just a downpour over a major metropolitan area that can create a billion dollars of damage. But that flipped when we go through the summer into the fall where the impacts in terms of the frequency and the cost would come from hurricanes, wildfire and droughts across the United States in different regions. So we have to continually pay attention to the weather and the climate, understand what's happened in the past and then look at the forecast coming our way. Our podcast largely focuses on the big trends in sustainability from a business perspective. So what's one big takeaway or action item you'd like to leave our listeners with? I think individually and collectively we should examine any data process analysis that we can from these disasters kind of ex post reporting and use it and implement it to add resilience and sustainability to both our built and human environments. These disasters will continue to occur to the future and we must be better prepared to minimize the loss of life and property. Great. Well, thank you so much for joining me. It's great having you on. Thank you so much. Today we heard how extreme weather events are growing in frequency and intensity and are becoming costlier due to a combination of climate change and the increased exposure from population growth in areas that are vulnerable to these extremes. Adam said that we need to study and learn from past billion dollar weather disasters and incorporate the observations into planning and building codes, among other things, to be more resilient to these events. We have published a number of research pieces on this topic using the S&P Global Sustainable One Physical Risk dataset, including research that found the total cost of climate physical risk for the world's largest companies was projected to reach $1.2 trillion annually by 2050. With extreme heat, water stress and drought accounting for 91% of that total. We'll include a link to that research and the dataset in case you'd like to learn more. And please stay tuned as next week we'll be back with more insights from my time at CERA week, the Big Energy Conference, S&P Global hosts in Houston each year. We're also taking the show on the road for a live podcast event, April 29th in London. This will be our first live event in the UK. And I hope you can join. Check out our show notes for more details and to register to attend. All Things Sustainable is also the official podcast of Climate Week Zurich in Switzerland, May 4th through 9th. This is the inaugural Climate Week in Zurich and we'll be on the ground all week conducting interviews with climate leaders. More details on that in the show notes as well. And for our listeners based in the US on the East Coast, you can find me in a little more than a week from now in the nation's capital where I'll be recording interviews at another Climate Week event, DC Climate Week, which runs April 20th through 26th. All Things Sustainable is the official podcast of DC Climate Week as well and we'll include a link to the event in case you'd like to register. Thanks for tuning in to this episode of All Things Sustainable. If you like what you heard, please subscribe, share and leave us a review wherever you get your podcasts. And a special thanks to our agency partner, The199. See you next time.
