Utilities across the United States are projected to encounter significant challenges from water stress and flooding in the coming decades in the current 1.5° climate scenario, in which global warming is held to 1.5°C above preindustrial levels. Senior Partner Humayun Tai and coauthors note that as many as 47 states contain a utility facing water stress, while all 50 states have utilities that are at risk of flooding in a 100-year flood. These climate-related threats pose major operational and financial risks to utility companies.
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A pair of choropleth maps depict the percentage of US utilities facing water stress and flooding under a 1.5° climate change scenario. The map on the left illustrates water stress, with varying shades of blue representing the percentage of utilities experiencing different levels of water shortage, categorized as borderline, infrequent shortage, frequent shortage, or chronic stress. The darker the blue, the higher the percentage of utilities facing water stress in that state. The map on the right displays the percentage of utilities facing flooding risk, also using shades of blue, with darker shades indicating a higher percentage of utilities at risk. The color scale for both maps ranges from 0% (lightest blue) to 100% (darkest blue), representing the proportion of utilities affected within each state. A note clarifies that the data is based on 1.5° scenarios, and percentages for each state are calculated based on the presence of greater than 0 cm of flood risk, encompassing risk levels of 0–25, 26–49, and 50+.
Note: This image description was completed with the assistance of Writer, a gen AI tool.
Source: McKinsey Climate Analytics.
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To read the report, see “Water resilience: Closing the funding gap for utilities,” March 11, 2025.