Adaptation & Resilience
Some climate risks are already locked in. Who builds the tools to live with them?
Mitigation tackles the cause. Adaptation manages the effects.
Adaptation and resilience (A&R) covers any technology, product, service or practice that helps others prepare for, prevent, respond to and recover from climate shocks and stresses.
Investors know what counts as mitigation finance. The criteria for adaptation finance, and how to measure its impact, are still blurry. We use a simple test: an investment qualifies if it significantly contributes to preventing or reducing the risks and negative effects of current and future climate hazards on people, ecosystems, assets or economic activities.
We read A&R as a market of local, hazard-specific tools. Foresight is where most startups are today, and where the data layer for everyone else gets built.
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Start from the hazard
Six hazards: flooding, drought, extreme heat, wildfire, hurricanes and storms, sea level rise. Each is either acute (a short-term shock) or chronic (a long-term trend).
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Place the solution on the continuum
Before, during or after the event. One solution can act at more than one point.
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Check it does not backfire
A fix that raises vulnerability elsewhere, or later, is maladaptation. We screen for it and measure impact along five dimensions.
A large need, little private money
As the world cuts emissions, many of the most exposed people are already facing the effects. The sums needed are large. The capital that has arrived is not.
The $200 billion is the global amount needed each year to limit climate change, about three times current funding.
Of global climate investment is allocated to adaptation. Most climate venture funds went to mitigation, mainly transport and energy.
Of adaptation funding comes from public sources.
Estimated annual cost of climate change-attributed extreme weather events, 2000 to 2019.
Total economic cost of weather, climate and water-related disasters over 50 years, rising every decade.
Countries have set or are considering net zero targets.
Global climate adaptation and resilience market, projected to reach $14.60 billion by 2030 at a 5.7% CAGR.
Need and capital are far apart. Private money stayed away because adaptation risk is local, cyclical and hard to model. The startups that make that risk measurable close part of the gap first.
Why private money stays away
After several years of weak attraction, A&R is emerging as a theme for growth-minded investors. The longer the funding gap stays open, the more expensive it gets to fight climate change.
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Not enough data
Country-level climate risk and vulnerability data is insufficient, which hampers informed investment decisions.
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Unclear gaps
It is unclear where government capital falls short and where private investment is crucial to reach adaptation goals.
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Perceived low returns
Returns on adaptation investments are perceived, or actually, low.
- Adaptation addresses both chronic risks and acute shocks.
- Startups struggle to build business models around unpredictable, cyclical events.
- Measures are implemented at a hyper-local scale, so go-to-market and scaling must be reinvented.
- The communities most hit are often the least resourced, with limited access to capital, and have not always been well served by tech companies.
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Remove systemic barriers
Information, technological, capacity or financial barriers to adaptation by others.
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Reduce physical risk directly
Reduce climate risks, or their adverse impacts, on other people, nature assets or economic activities.
- Growing recognition of the economic and social cost of inaction.
- More frequent and severe climate disasters, such as hurricanes, floods and wildfires.
- New technologies that enable more accurate risk assessment and better decisions.
- Better financial mechanisms and policy frameworks.
The gap is a financing problem as much as a technology problem. We look first at companies that remove the information barrier, because every other adaptation investment depends on it.
Adaptation, resilience and who they serve
The two terms are often used interchangeably. They are complementary, with real differences.
Adaptation
“Adjustments in ecological, social or economic systems in response to actual or expected climatic stimuli and their effects. It refers to changes in processes, practices and structures to moderate potential damages or to benefit from opportunities associated with climate change.”United Nations Climate Change
- Short- or long-term, incremental or transformative
- A single action or a holistic programme
- Reactive and backward-looking, or proactive and forward-looking
- No one-size-fits-all: flood defences, cyclone early warning, drought-resistant crops
- Depends on governments but also on sustained engagement from communities, public and private sectors, civil society and good knowledge management
Resilience
“The capacity of social, economic, and environmental systems to cope with a hazardous event, trend, or disturbance, by responding or reorganizing in ways that maintain their ability to adapt, learn, and transform.”IPCC
There is no exact definition yet. Resilience is a dynamic process that evolves over time, and it rests on three capacities (Tanner et al., 2017).
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Absorptive
Withstand and manage climate variability and extremes with available skills and resources.
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Adaptive
Adjust to long-term risks, and learn and adapt after a disaster.
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Transformative
Make the fundamental changes in social systems that long-term resilience needs.
Adaptation is often considered a component of resilience. Coping comes first. If coping is not enough, incremental adaptation, through technological and managerial adjustments, handles specific events or prevention. When that fails, transformation is needed: significant changes such as altering city structures or farming practices. Examples of adaptation actions include rainwater harvesting tanks, reintroducing nature into cities and agroecology. A region's resilience is measured by its ability to anticipate, act, adapt and transform to reduce its vulnerability to climate hazards.
People
- Public health systems for climate-related illness
- Early warning and insurance for extreme weather
- Community disaster preparedness
- Climate-resilient housing and urban planning
- Education on impacts and adaptation
Businesses
- Climate risk assessment tools
- Sustainable supply chain management
- Continuity plans for extreme weather
- Climate-resilient technologies and infrastructure
- Green innovation and circular economy
Infrastructures
- Transport built to withstand extreme weather
- Energy grids reliable during disasters
- Water management for floods and drought
- Climate-resilient buildings and urban spaces
- Digital infrastructure for remote work and crisis communication
Nature
- Restoring wetlands, forests and coral reefs
- Nature-based flood and coastal protection
- Sustainable agriculture and forestry
- Biodiversity and wildlife corridors
- Adaptive management of protected areas
Think of adaptation as the action and resilience as the result. We back companies whose action visibly raises the resilience of the people, assets or ecosystems they serve.
Seventy years of warnings, then policy
Since the second half of the 20th century, human pressure on ecosystems has become the primary force altering the Earth system. Adaptation was theorised first. Resilience came a few years later.
- 19511
A first warning
The International Union for Conservation of Nature (IUCN) publishes a pioneering report calling for a balance between economic growth and environmental preservation.
- 19722
Limits to growth
The Club of Rome warns about unchecked growth, resource depletion and pollution. The UN Environment Programme (UNEP) is established.
- 1970s3
Adaptation is theorised (1970s and 1980s)
A theoretical response to the long-term impacts of climate shifts, and to the future need for societies to adjust.
- 1990s4
The IPCC puts it on the table
The first IPCC report stresses that societies must adapt to inevitable impacts, not only reduce emissions.
- 2000s5
Adaptation goes mainstream, resilience appears
The third IPCC report (2001) emphasises adaptation, now central to climate negotiations at the COPs. Resilience starts to be applied to climate: the ability of communities, ecosystems and infrastructure to absorb and recover quickly from climate hazards.
- 20156
Paris Agreement
Recognises the need to enhance the resilience of communities and ecosystems to cope with climate impacts.
- 20237
Planetary boundaries
A Stockholm Resilience Centre research team agrees that 6 of the 9 identified planetary boundaries have been exceeded.
After more than 70 years of warnings, A&R has gone from theory to unavoidable. With six of nine planetary boundaries crossed, the question is how fast useful tools can reach the people who are exposed.
Six hazards, two speeds
Acute hazards are short-term shocks: flooding, wildfire, hurricanes and storms. Chronic hazards are long-term trends: drought, extreme heat, sea level rise. Each needs different tools.
Acute hazards reward prediction and detection, because a warning minutes or hours earlier changes the outcome. Chronic hazards reward infrastructure and efficiency, because the trend does not reverse.
Before, during, after
For every climate risk, solutions line up with the stage of exposure: before, during or after an event. An A&R solution can address climate impacts in more than one way.
Before
Prepare for and prevent physical climate risks by building foresight for people, nature, physical assets and businesses. Understand the risks and manage them early to reduce vulnerability.
- Early warning systems
- Climate risk assessments
- Resilient infrastructure
- Policies that promote sustainable practices
During
Respond effectively as risks occur, and cope with and adjust to adverse conditions. The goal is to withstand the immediate impacts of the event.
- Emergency response measures
- Temporary protective actions
- Adaptive management that can face unpredictable phenomena
After
Recover from the impacts and rebuild so that future resilience improves, learning from past events. The key idea is “build-forward better”.
- Rehabilitating ecosystems
- Rebuilding infrastructure
- Restoring livelihoods in ways that reduce future vulnerability
Foresight is where the startups are: 74 of 136 work on Before, 43 on During and 19 on After. Risk data and detection scale as software. Response and recovery are physical and local, which makes them harder to scale.
136 startups, mostly upstream
A non-exhaustive, worldwide list of tech and low-tech companies, grouped by climate hazard. Inclusion is for context and is not an endorsement.
- Descartes · France · Risk management€114M
- Accenta · France · Extreme heat€108M
- Tomorrow · USA · Risk management€79M
- Arbol · USA · Risk management€57M
- AiDash · USA · Risk management€52.3M
The field is young and concentrated. France (46) and the USA (34) host 59% of the map, and 36 of 136 companies have no fundraising recorded. Wildfire (37) and risk management (32) are the busiest categories. We look for companies with a buyer who already pays to avoid a loss.
Impact has to be shown, not claimed
We use the Five Dimensions of Impact from Impact Frontiers, a widely recognised, open-source framework for assessing the positive impact of investments, applied here to A&R.
What
The outcomes and why they matter. Physical risk is set by hazard, exposure and vulnerability. Enabling investments make others more resilient, such as crop research. Adapted investments are made resilient themselves, such as a flood-resistant road. Some are both.
Who
People (individuals, households, communities). Planet (habitats, ecosystems, biodiversity). Economy (resilient assets such as water infrastructure, and resilient businesses such as agribusinesses or financial institutions).
How much
Scale: how many people or hectares are covered. Depth: how much vulnerability falls, for example farmers keeping income during droughts. Duration: how long outcomes last.
Contribution
Would the outcome have happened without the investment? Compare against a “without investment” scenario, built by the investor or by external experts.
Risk
Outcomes may differ from expectations. Poor implementation or unintended consequences, known as maladaptation, can increase vulnerability. Solar irrigation pumps, for example, can worsen water scarcity by overusing groundwater.
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Screening
Assess the company's A&R offering.
- Directly reduces climate-related risks and impacts on people, nature or assets
- Helps remove barriers to adaptation: information, technology, capacity or financial constraints
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Due diligence
Verify the impact pros and cons.
- Does not hinder the Paris Agreement's 1.5°C goal, prioritising low-emission, dual-benefit solutions
- Avoids negative social, environmental or economic impacts
- Shows positive, data-backed A&R impact over the investment's duration
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Investment decision
Check the impact pros and cons of the A&R solutions.
- Use data, market watch, benchmarks and reference calls to understand the solution and its climate impact
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Monitoring
Measure A&R impact results.
- Follow progress on positive climate impact with qualitative and quantitative metrics over the holding period
When adaptation backfires
Adaptation solutions are multiplying. Many can do the opposite of what was intended: design a project that unintentionally increases vulnerability to climate stimuli, and it weakens the resilience it was meant to build.
Compared with alternatives, a solution is maladaptive if it:
- increases greenhouse gas emissions
- disproportionately burdens the most vulnerable
- entails high opportunity costs (economic, social or environmental)
- reduces incentives for adaptation
- creates technological path dependency for future generations
Top-down approaches, typically infrastructure that cuts sensitivity or exposure, are more likely to cause maladaptation than bottom-up ones, which build adaptive capacity through no-regret or soft measures.
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Time
Could this action cause a temporal shift in vulnerability?
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Space
Could it cause a spatial shift in vulnerability?
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Systems
Could it shift vulnerability to other systems or ecosystems?
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Uncertainty
Could it become an aggravating factor because climate change uncertainties were not considered?
A “no” to each question is essential.
Vulnerability is the propensity of a population or ecosystem to suffer damage from climate variations, tied to adaptive capacity (geographic exposure, financial and human resources, quality of infrastructure). Spatial vulnerability varies with location. Temporal vulnerability is a change in the ability to cope over time.
Water consumption, energy use, functional dependency, structural dependency and geographic location. Functional dependency covers the indirect impacts of climate change on an activity. Structural dependency covers reliance on networks such as transport, energy and water.
Desalination answers two climate risks, drought and sea level rise, yet it can produce contrary effects. Plants discharge chemicals from reverse osmosis and return excess salt to the water, raising salinity. Their high energy use drives greenhouse gas emissions, which worsens climate vulnerability.
A fix that moves vulnerability elsewhere, or into the future, is not adaptation. We ask the four questions before the commercial ones.
Foresight first, then everything else.
Adaptation is no longer optional. Some hazards are locked in and six of nine planetary boundaries are exceeded, while only 7% of climate investment goes to adaptation, almost all of it public.
The market is early and local. We find it compelling where a startup removes an information barrier or cuts a physical risk directly, serves a buyer who already pays to avoid a loss, and can show measurable impact on people, nature or assets without exporting the problem.
Building in this space?
Talk to us- World Economic Forum. Market sizing ($2 trillion by 2026) and annual investment targets ($200 billion). “How to start funding adaptation and resilience investments” (June 2024). Sea level rise.
- British International Investment. VC and PE climate investment in 2023 ($56.5 billion). Economic cost of disasters ($4.3 trillion). “Adaptation and resilience: a $2 trillion market opportunity the private sector cannot ignore”.
- Crunchbase. Data behind the mapping chart of our research.
- MSCI Institute. “Unavoidable opportunity: how to make climate adaptation and resilience investable”.
- United Nations Climate Change. Definition of adaptation and the adaptation policy cycle. UNDP, OECD and the Grantham Research Institute (LSE) on adaptation and resilience.
- IPCC. Definition of resilience. Tanner et al. (2017), three dimensions of resilience.
- IUCN (1951), Club of Rome (1972), UNEP, Paris Agreement (2015). Stockholm Resilience Centre, planetary boundaries (2023).
- Impact Frontiers. Five Dimensions of Impact and “Adaptation and Resilience Impact: a measurement framework for investors”.
- Barnett and O'Neill (2010), maladaptation. Pierre Serkine (2015), maladaptation assessment tool.
- Flooding: WHO, European Commission, Boston University (“Global Flood Risk under Climate Change”, Public Health Post), CASCADE.
- Drought: WHO, WMO, Statista (World Map of Drought Risk), International Rescue Committee.
- Extreme heat: WHO (heat and health), Climate Central, The New York Times heat tracker.
- Wildfire: Congressional Research Service, Copernicus (2023 wildfire activity), NASA, Global Forest Watch, Britannica (secondary succession).
- Hurricanes and storms: US National Weather Service, Center for Climate and Energy Solutions. Sea level rise: NOAA (climate.gov), National Geographic, ResearchGate (countries most and least at risk).
- Ternel research. Database of 136 A&R startups across six categories, with climate hazard, adaptation stage, country, founding year and last funding. Startup counts and shares on this page are computed from it.