EXECUTIVE SUMMARY Hurricane Beryl in 2024 was the earliest Category 5 hurricane on record. Hurricane Melissa in November 2025 caused an estimated US$8.8 billion in damage to Jamaica alone—equivalent to 41 percent of GDP. Climate damages in the Caribbean are projected to increase from 5 percent of regional GDP to over 20 percent by 2100. For Caribbean enterprises, climate risk is no longer an environmental concern—it is a balance sheet imperative. This article provides a practical framework for climate-proofing enterprise finances: from business continuity planning and insurance strategy to climate-adapted capital allocation and access to the growing pool of resilience financing instruments available to the region.

The New Climate Reality: Why the Caribbean Cannot Plan on Historical Averages

The Caribbean has always lived with hurricanes. What has changed is the intensity, unpredictability, and financial scale of climate events. Hurricane Beryl formed in June 2024 as the earliest Category 5 hurricane in recorded history, breaking meteorological records for intensity in both June and July. It was followed in November 2025 by Hurricane Melissa, which struck Jamaica with devastating force—estimated damage of US$8.8 billion represents approximately 41 percent of the island’s GDP. The Caribbean Catastrophe Risk Insurance Facility disbursed approximately US$72 million to Grenada, Jamaica, and St. Vincent and the Grenadines following Hurricane Beryl, and subsequently paid out over US$91.9 million to Jamaica alone following Hurricane Melissa, underscoring both the value and the limitations of existing risk transfer mechanisms.

These are not anomalies. Extreme weather and climate events in the Caribbean increased by 85 percent between 2001 and 2020, costing an annual average of 2.13 percent of regional GDP according to the OECD and Inter-American Development Bank. Since 1980, natural disasters across Latin America and the Caribbean have affected as many as 7 million people every year and caused average annual economic losses of US$9.9 billion. The IMF’s 2025 assessment of The Bahamas concluded that climate change—including sea level rise, biodiversity loss, and intensifying hurricanes—threatens to undermine the country’s long-term economic output by damaging physical assets and eroding the natural capital vital to its tourism-driven economy.

For enterprise leaders, the critical implication is this: business plans, capital allocation decisions, insurance strategies, and financial projections built on historical climate averages are no longer fit for purpose. The Caribbean’s climate risk profile has fundamentally shifted, and balance sheets must shift with it.

Five Dimensions of Climate-Financial Risk

Caribbean enterprises face climate-related financial exposure across five interconnected dimensions that boards and CFOs must understand and manage holistically.

1. Physical Asset Risk

The most visible dimension: hurricanes, floods, storm surge, and rising sea levels can damage or destroy buildings, equipment, inventory, and infrastructure. For Caribbean businesses with coastal facilities, tourism properties, or agricultural operations, physical asset risk is existential. The IDB Invest initiative launched with Green Climate Fund support in 2025 specifically targets this dimension, deploying US$118.9 million to help Caribbean businesses invest in hurricane-proof roofing, elevated electrical systems, backup power, and other physical resilience measures.

2. Business Interruption Risk

Even when physical assets survive, climate events disrupt operations—through power outages, supply chain breaks, employee displacement, and customer access disruption. For tourism-dependent economies, the reputational impact of a major storm can suppress visitor arrivals for months or years beyond the physical recovery. Business continuity planning, as emphasised by IDB Invest’s Caribbean advisory work, must incorporate not only recovery strategies but pre-positioned resilience measures that minimise downtime.

3. Insurance and Risk Transfer Risk

Caribbean insurance markets are under increasing strain. Premiums are rising as reinsurers reprice climate risk globally. Coverage gaps are widening, particularly for smaller enterprises and those in high-exposure locations. The protection gap—the difference between insured and uninsured losses—remains substantial across the region. While CCRIF SPC provides critical parametric insurance to 19 Caribbean governments with rapid payouts after triggered events, this is sovereign-level coverage; the enterprise-level insurance challenge requires separate and more granular solutions.

4. Credit and Liquidity Risk

Climate events impair cash flow, trigger loan defaults, and erode collateral values. For banks and financial institutions, climate exposure manifests through increased default risk in loan portfolios and lower asset values. Caribbean banks, already cautious lenders, may tighten credit further as climate risk repricing accelerates—creating a liquidity squeeze precisely when businesses most need capital for recovery and resilience investment.

5. Transition and Regulatory Risk

As discussed in Articles 5 and 7 of this series, ESG disclosure requirements and regulatory modernisation are accelerating across the region. Enterprises that fail to assess and disclose climate-related financial risks will face increasing difficulty accessing international capital, maintaining correspondent banking relationships, and meeting the expectations of institutional investors, regulators, and trading partners. The Bridgetown Initiative, championed by Barbados Prime Minister Mia Mottley, is driving reforms to global development finance that will further raise the bar for climate risk transparency.

The Climate-Resilient Balance Sheet: A Practical Framework

Dawgen Global works with Caribbean enterprise leaders to build financial resilience across four strategic pillars.

Pillar 1: Business Continuity and Disaster Recovery Planning

Every Caribbean enterprise should maintain a comprehensive business continuity plan that incorporates a business impact analysis identifying critical operations, dependencies, and acceptable downtime thresholds; a recovery strategy with clear priorities, service-level targets, and communication protocols; pre-positioned agreements with backup suppliers, alternative facility providers, and technology recovery services; regular testing and updating of the plan—not as an annual compliance exercise but as a living operational discipline; and integration of climate scenario planning that reflects the region’s evolving risk profile, not historical averages. IDB Invest’s advisory work in the Caribbean emphasises that effective business continuity management concentrates on impact rather than source—giving organisations flexibility to address a broad range of disruptions regardless of origin.

Pillar 2: Strategic Insurance and Risk Transfer

Caribbean enterprises must move beyond passive insurance purchasing toward strategic risk transfer. This means conducting rigorous risk assessments to understand actual exposure across all five dimensions; working with specialist brokers to design insurance programmes that address the specific risks of Caribbean operations; exploring parametric insurance products that provide rapid payouts based on event triggers rather than lengthy claims processes; considering alternative risk transfer mechanisms such as catastrophe bonds, industry loss warranties, and risk pooling arrangements; building relationships with the CCRIF SPC ecosystem, which is expanding its product range to include coverage for electric and water utilities, fisheries, and—beginning in 2025/26—fluvial flooding; and maintaining adequate contingency reserves to cover deductibles and uninsured losses.

Pillar 3: Climate-Adapted Capital Allocation

Capital investment decisions must incorporate climate risk as a core variable. This requires climate risk screening of all major capital expenditure proposals—asking not only about expected returns but about exposure to physical, transition, and regulatory climate risks; prioritising investments in physical resilience: hurricane-proof construction, flood-resistant infrastructure, distributed energy systems, and elevated critical equipment; building climate contingency into working capital management, including maintaining higher liquidity buffers during hurricane season and pre-arranging emergency credit facilities; and stress-testing financial projections under multiple climate scenarios, including events more severe than those experienced historically.

Pillar 4: Accessing Climate and Resilience Finance

A growing ecosystem of climate and resilience finance is available to Caribbean enterprises, and boards should ensure their organisations are positioned to access it. The Caribbean Development Bank launched its Climate Change Project Preparation Fund in 2025 to help member countries identify and prepare high-quality climate projects. The CDB’s SuRGE programme, funded by Canada, is accelerating the transition to sustainable and resilient energy. IDB Invest’s Green Climate Fund-financed facility is specifically targeting Caribbean private-sector resilience through blended finance and technical assistance. The Adaptation Fund is supporting climate resilience in Caribbean agriculture. Green bonds and sustainability-linked lending instruments are expanding in Caribbean capital markets. Enterprises that can demonstrate strong climate governance, clear resilience strategies, and robust impact measurement will be best positioned to access these instruments on favourable terms.

Three Priorities for 2026

Priority One: Commission a Climate Risk Assessment

Engage specialist advisors to conduct a comprehensive assessment of your organisation’s climate exposure across all five dimensions. Map physical asset vulnerability, model business interruption scenarios, evaluate insurance adequacy, stress-test financial projections, and identify transition and regulatory risks. This assessment should produce a board-ready climate risk register that informs capital allocation, insurance strategy, and business continuity planning.

Priority Two: Strengthen Business Continuity for Climate Scenarios

If your business continuity plan was last updated before Hurricane Beryl, it is out of date. Refresh your plan with climate scenarios that reflect the new reality of earlier, more intense, and less predictable storms. Test the plan through simulation exercises and address the gaps exposed. Ensure that your plan covers not only immediate disaster response but medium-term operational resilience and long-term strategic adaptation.

Priority Three: Position for Climate Finance

Begin building the governance infrastructure, reporting capabilities, and project preparation capacity needed to access climate and resilience finance instruments. The enterprises that move first will secure the most favourable terms as these instruments scale. Engage with bodies like the CDB, IDB Invest, and the Green Climate Fund to understand eligibility requirements and pipeline opportunities.

Resilience as Return on Investment

Climate resilience is not charity. It is not corporate social responsibility. It is financial strategy. Every dollar invested in hurricane-proof infrastructure, every hour spent strengthening business continuity plans, every premium paid for well-structured insurance coverage generates measurable return—in reduced losses, faster recovery, preserved revenue streams, and sustained access to capital and markets.

The Caribbean enterprises that will thrive in the coming decades are those that treat climate risk with the same rigour they apply to credit risk, market risk, and operational risk—integrating it into governance frameworks, embedding it in capital allocation decisions, and reporting it transparently to stakeholders. Dawgen Global stands ready to support Caribbean leaders in building the climate-resilient balance sheets that this moment demands.

The next storm is not a question of if. It is a question of whether your balance sheet is ready when it arrives.

Dawgen Global is a multidisciplinary professional services firm delivering audit, assurance, tax, advisory, and risk management solutions to Caribbean enterprises through a digital-first engagement model. Our borderless advisory approach connects Caribbean leaders with specialist expertise across the full spectrum of regulatory, financial, and strategic challenges—without the constraints of geography.

To discuss how Dawgen Global can support your organisation’s climate resilience strategy, contact our advisory team directly.

 

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