Finance & Investment Regeneration & Resilience

Investors, Listen Up:
Adaptation & Resilience Promise Trillions in ROI

The Climate Adaptation & Resilience market will pay fast dividends for today’s forward-thinking investors while fortifying the world for a climate-changing future.

Published 4 weeks ago | About a 5 minute read

Image: In 2014, Copenhagen's historical Enghavepark was transformed into the city's biggest climate project – containing an integrated water reservoir, biodiverse vegetation and more. | International Union of Architects

Investment opportunities in climate adaptation and resilience (Climate A&R) are often discussed as something that will materialize in the future. But a new report from Boston Consulting Group (BCG) and Singaporean investment firm Temasek shows that Climate A&R is rapidly emerging as a trillion-dollar investment opportunity from which private equity investors can generate attractive returns right now.

Despite this potential, private equity investors have largely struggled to capitalize on this market — hampered by difficulties in understanding, navigating and analyzing the space.

The Private Equity Opportunity in Climate Adaptation and Resilience offers much-needed structure and analysis, which reveal a clear and compelling landscape of actionable opportunities — ranging from venture to growth and buyout. Investors who act now can help shape the industries that will define climate resilience — capturing commercial opportunity while driving progress on one of the most important challenges of our time.

The growing Climate A&R market

Over the past decade, each year has broken the previous year’s record for being the hottest in recorded history. As a result, climate-fueled extreme-weather events — including wildfires, heat waves, cold waves and floods — have increased significantly in both frequency and intensity.

In 2024, record flooding in Europe, record-high temperatures in Asia, a dangerously active hurricane season in the Eastern US and more caused an estimated $402 billion in damages — 20 percent higher than the 10-year inflation-adjusted average, according to reinsurer Gallagher Re. And in January 2025, simultaneous wildfires in Los Angeles and Winter Storm Enzo in the Gulf caused over $250 billion and $500 million in economic losses, respectively.

In response to this trend, climate-mitigation activities — including scaling renewable energy and nature-based solutions, and innovating to increase urban climate resilience — continue to be top investment priorities. But Climate A&R solutions are also urgently needed. At current levels of mitigation activity, a recent study by BCG and the World Economic Forum projects an increase in average global temperature over 3°C over pre-industrial levels by 2050 — slashing annual profits 5-25 percent in industries including telecommunications, utilities, food and beverages and construction.

One projection of the Climate A&R market’s size comes from the 2024 UN Adaptation Gap Report, which estimates adaptation financing needs of $215 billion-$387 billion a year between 2025 and 2030 in the Global South alone. Including developed countries, the projected demand for Climate A&R investments rises to between $0.5 trillion and $1.3 trillion annually by 2030.

‘Tomorrow’s’ opportunities, today

As the need to deploy Climate A&R solutions becomes more urgent, it is catalyzing the creation, maturity and growth of companies working to develop, deploy and scale climate-related innovations worldwide.

Speaking on May 7 during a panel discussion on investing in climate adaptation and resilience at Ecosperity Week, BCG managing director and partner Daniel Oehling, lead author of the report, said it aims to debunk key misconceptions that investors have about the adaptation sector.

“There is a misconception that this is still a very early-stage industry — and, as such, the companies are early stage, are small, are not profitable today, have high technological risk, and it’s not investable for a lot of private investors,” he said. “But what our work has shown is that these misbeliefs are not true … They are [already] highly profitable, and they are companies that you can act on as an investor.”

Mapping the most promising investment opportunities

Several Climate A&R classification frameworks already exist, but they usually classify solutions in terms of how they mitigate risks or prevent damage — not in terms of the demand they could create. Investors lacked a classification system based on how markets are structured, with comparisons of market sizes and growth rates, competitive dynamics and profitability.

So, the report introduces BCG’s Climate Adaptation and Resilience Investment Opportunity Map — designed to systematically guide investors by identifying and structuring the universe of opportunity areas in Climate A&R. The report further provides six sectoral deep dives, uncovering market dynamics sought after by private equity investors and spotlighting concrete, investable opportunities with strategies ranging from venture to growth to buyout. The resulting framework lays out the universe of investible possibilities, quantifies them and assesses the relative attractiveness of subsectors across time horizons using a range of current and leading indicators.

The Opportunity Map shows the breadth and depth of climate-related investment opportunities available today, through a three-layered segmentation:

Level 1. The first layer of 7 impact themes covers areas where climate change is currently having the greatest impact:
1. Food resilience
2. Infrastructure resilience
3. Health resilience
4. Business and community resilience
5. Water resilience
6. Energy resilience
7. Biodiversity resilience
Level 2. Each impact theme includes several subsectors with multi-billion-dollar markets, double-digit growth rates, healthy margins and a sizeable pool of investable companies — characteristics that private investors typically look for before making investment decisions.
Level 3. In each subsector, there’s a comprehensive list of solutions based on case studies, innovations and stakeholder analyses. These solutions span products and services across mature and emerging technologies, business models and value segments.

In some sectors and subsectors, mature Climate A&R business models will expand faster — creating tailwinds for growth or buyout strategies; in others, innovation will provide early-stage opportunities with high growth potential.

The report also projects growth, segments markets and identifies investment opportunities for the following six subsectors:

Climate intelligence solutions – Expected to grow by around 15 percent over the next five years (annual CAGR)
Climate-resilient building materials – Expected to grow by 6-8 percent
Human-engineered flood-defense solutions – Expected to grow by 7-10 percent
Climate-adapted agricultural inputs – Expected to grow by 4-7 percent
Urban and industrial water efficiency – Expected to grow by 6-8 percent
Emergency medical products and services – Expected to grow by 8-10 percent

As temperatures rise and extreme weather intensifies, the market for Climate A&R solutions will pay fast dividends for today’s forward-thinking investors while fortifying the world for a climate-changing future.