The authors would like to thank Emily Chew, Viola Tang, Justin Choo, Ayoj Nepal, Bhavik Patel, Esi Neubert, Heather Beattie, Lim Wei Zi, Maren Proeve, Marina Finley, Miranda Carr, Mok Wen Xi, Natalie Lai, Ng Poh Khai, Pek Shi Bao, Peter Peng, Prabhnoor Singh Jolly, Rayn Ngong, Shannon Zhou and Stephane Mangeon from GIC for their invaluable inputs on this project; Trang Chu Minh and Isabelle Lim from GIC for their editorial inputs; Bain & Company for their research partnership and inputs.

Executive Summary

Climate adaptation is an inevitable need and investment opportunity. Research on climate-related investment opportunities has largely focused on decarbonisation, reflecting the urgent need to transition to a lower-carbon global economy. In contrast, climate adaptation has received comparatively less attention, partly due to the misperception that it is primarily the responsibility of national governments. Yet as the physical impacts of climate change escalate, adaptation will need to scale across all levels of society, from governments and businesses to communities and households. This creates a vital role for the private sector in strengthening economic and community resilience to physical climate risks. Companies offering adaptation solutions are thus emerging as a complementary and increasingly investible part of the broader climate response.

In partnership with Bain & Company, we reviewed industry and scientific studies to identify the climate adaptation solutions most relevant to private sector investors. Our research was augmented by interviews with experts across a range of fields, including industry practitioners, climate scientists, insurers, and weather modellers, for a more holistic assessment of the size and nature of the opportunity.

We examined a broad investment universe before narrowing our focus on a select group of adaptation solution categories. Within this set, we identified emerging and more established solutions to develop early-stage estimates of the potential investment opportunity, both current and future. We sized their total addressable market (TAM), quantified their potential investment value, and evaluated the proportion of market revenue driven by climate change.

Our study revealed five key findings:

• Global annual revenues from a select set of climate adaptation solutions are projected to grow from US$1 trillion (tn) today to US$4tn by 2050 in our Base Case. Of this, we estimate US$2tn will be incremental revenue growth driven by global warming—a factor not typically accounted for in current industry forecasts.
• The corresponding investment opportunity set across public and private debt and equity is expected to increase from US$2tn today to US$9tn by 2050, with US$3tn representing an incremental increase attributable to global warming. While our model conservatively assumes adaptation demand will be reactionary, greater awareness of physical risks may prompt a shift to anticipatory action, accelerating revenue growth and related investment opportunities before 2050.
• The opportunity remains significant regardless of climate scenario. Variation in estimated value is +/-4% across scenario bookends, as projected temperature differences over the next 25 years are minimal across scenarios. This suggests investors can build conviction in this space without needing to predict the precise climate pathway.
• In our Base Case, we expect adaptation revenues in 2050 to exceed projections based on historical trends by 61%. This upside surprise reflects the difficulty of translating climate science into long-term business implications. Most financial planning and analysis (FP&A) teams and sell-side analysts continue to rely on historical data for forecasting. This information gap presents long-term investors with a unique opportunity to invest in a space where company earnings may positively surprise as demand for adaptation solutions increases.
• The inevitable need for climate adaptation will fuel growth across both established and emerging solutions. Our analysis suggests that climate adaptation will foster technological innovation (e.g. weather intelligence) while boosting the adoption of mature technologies (e.g. weather-resilient building materials). Together, these dynamics create investment opportunities across traditional and emerging industries.

While decarbonisation remains essential to mitigating emissions, our research highlights climate adaptation as a complementary investment theme—one that is gaining importance as the physical impacts of climate change become more pronounced. Both offer valuable opportunities for long-term investors, addressing different but urgent dimensions of the climate challenge.

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