Waking up to climate adaptation

A huge investment imbalance is beginning to be corrected

An image/reality to consider: Battered by hurricanes and tired of rebuilding, 90% of population has left this coastal town. We’re talking a small community in Louisiana that is disappearing due to climate change. Irony of ironies: the town’s potential salvation comes in a proposed natural gas export terminal, naturally opposed by climate activists.

Doesn’t get any more stark than that, does it?

It has been long noted that investment in climate change-related projects overwhelmingly favors mitigation over adaption — basically a 90/10 split. But more and more we’re hearing about investors and financial firms waking up to the benefits — and profits — associated more with adaptation.

This Reuters story details the growing shift:

Adaptation has been described as a nascent opportunity for years, but investors have virtually ignored it, according to the report by the non-profit Global Adaptation and Resilience Investment Group (GARI) with support from the Bezos Earth Fund, ClimateWorks Foundation and MSCI Sustainability Institute.

As for the 2022 report/toolkit itself, GARI says the following:

“Investing in Climate Resilience” presents a first-of-its-kind, AI-powered framework identifying a universe of over 800 publicly traded companies in the business of resilience along with methods investors can use to find these companies and incorporate climate resilience into investment product design.