This paper investigates the impact of physical climate risk, measured by local temperature shocks, on corporate debt concentration. Using a comprehensive dataset of Chinese A-share listed companies from 2003 to 2022, we find that firms exposed to more frequent extreme heat events significantly decrease their debt concentration. This is evidenced by a lower Herfindahl-Hirschman Index of debt types and a higher number of distinct debt instruments employed. This finding is robust across a battery of tests, including alternative measures for both temperature shocks and debt concentration, as well as various model specifications. Mechanism analysis reveals that this strategic diversification is driven by firms’ operational vulnerability: the effect is more pronounced for firms with a higher proportion of production workers, a less-educated workforce, and greater reliance on automation, indicating that neither human labor nor robotic substitution is immune to heat-related productivity risks. Further heterogeneity analysis shows that the response is concentrated in firms with the motivation or capacity to act: non-state-owned enterprises, firms that are less financially constrained, those with strong accounting conservatism, and larger, geographically diversified firms. Our study contributes to the literature by identifying debt structure as a key channel for corporate climate adaptation and by introducing physical climate risk as a novel determinant of debt concentration.