The effects of climate change are becoming stark and the economic costs are rising. While most investor focus has been on the risks those changes pose to companies and assets, investment in solutions to mitigate that impact will become increasingly important, and will present opportunities to forward-looking investors.
It would be easy to treat adaptation as another exercise in measuring physical climate risk exposure. This is necessary, but incomplete. For investors, the structural need to protect assets, revenues and economic activity is also creating demand for products, services and infrastructure that can strengthen the wider system resilience.
Climate adaptation is the process of making adjustments to actual or expected climate change and its impacts – while considering climate resilience as the broader capacity of an individual asset, organization or system to anticipate, withstand, absorb and recover from shocks and stresses such as climate change.
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