A first-of-its-kind investor toolkit was recently released to help those investing in climate resilience.
Leading financial and philanthropic organizations, including the Bezos Earth Fund and ClimateWorks Foundation, have unveiled a first-of-its-kind investor toolkit to accelerate investment in climate resilience solutions.
The report “Investing in Climate Resilience: Unlocking a Growing Market of Adaptation Solutions” challenges the notion that climate adaptation is solely a cost burden and presents it as an emerging growth industry ripe with investment opportunities.
As climate change impacts intensify, from rising sea levels to extreme weather events, the demand for technologies, products, and services that bolster resilience to these threats rapidly escalates worldwide. Investors know this, and investing in climate resilience has become a natural part of diversification. The report identifies over 800 publicly traded companies across sectors like industrial, materials, consumer goods, and insurance that provide resilience solutions – a potential “investible universe” for climate adaptation.
“The urgency of climate change has resulted in two intertwined investment opportunities: the transformation to a net-zero emissions economy and the need to adapt to its impacts,” said Paul Bodnar, Director of Sustainable Finance at the Bezos Earth Fund. Just as financial markets have become a vital force for decarbonization, they can do the same for companies developing resilience technologies and services.
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Nearly a third of the identified companies are based in emerging markets, which face disproportionate threats from climate change despite contributing little to causing it. The analysis spotlights 231 public firms across 24 developing nations offering local resilience solutions, highlighting an avenue for impact investors to drive both climate adaptation and environmental justice.
“Climate resilience solutions can simultaneously advance equity and help communities most at risk from climate impacts,” said Helen Mountford, CEO of ClimateWorks Foundation. “Climate adaptation in emerging markets is an overlooked yet critical investment opportunity.”
The Investing in Climate Resilience report, authored by the Global Adaptation & Resilience Investment Working Group, lays out a comprehensive Investing in Climate Resilience Solutions Principles framework for investors to systematically identify relevant public and private companies across asset classes, sectors, and growth stages.
The analysis surfaces the idea that prospective resilience plays across industries. In the industrial sector (42% of identified firms), key solutions include advanced water treatment, grid resiliency, disaster prevention infrastructure, and risk analytics. For materials (16%), opportunities span sustainable construction materials, biobased replacements for petroleum-based goods, and innovative food production systems. Consumer companies (8%) are developing early-warning systems, resilient product designs, and new insurance offerings.
“This lays the groundwork to identify companies providing exposure to climate resilience solutions,” said Linda-Eling Lee of the MSCI Sustainability Institute, which aims to spur sustainable investment through data and research, ultimately investing in climate resilience.
While climate change mitigation efforts like decarbonization remain paramount, the report argues the world must also invest heavily in equipping society to withstand the “locked-in” impacts ahead. Mobilizing capital and investing in climate resilience solutions thus represents both an essential climate imperative and a burgeoning market opportunity.
“If we treat adaptation as an obscure topic for governments, we risk stifling private sector innovation urgently needed for the world’s most vulnerable populations,” Bodnar stated. “Financial markets can be a vital catalyst.”
If we fail to move investing in climate resilience to the mainstream and rely upon elected officials to do the hard work, we risk missing the opportunity to effect change before it is too late. Certainly, governments should do everything possible, but they no longer need to feel at odds with industry. By leveraging the drive and savvy of the entrepreneurial spirit, we can accelerate progress and develop alternate economic models to the ones that got us to where we are today.
With investing in climate resilience frameworks, tools, and company support, the Bezos Earth Fund and partners aim to catalyze the investment community to more proactively address the escalating adaptation crisis – and tap into an increasingly crucial growth sector.
