As much as climate change is now in regular rotation in the daily news, we’re still a long way from knowing exactly how it will change life as we know it. But as changes become evident, new business opportunities have already presented themselves – take, for example, extinction tourism: The concept surfaced in marketing campaigns in 2008 as companies began offering packages tied to global warming, “using climate change as a marketing pitch, a ‘see it now before it’s gone’ kind of thing,” said Ayako Ezaki, communications director for the International Ecotourism Society at the time.
That same year, as scientists measured and reported a record melt in the Arctic ice and Al Gore's An Inconvenient Truth hit theaters, a half-dozen major investment houses launched mutual funds to leverage imminent opportunities from climate change.
One man’s tragedy is another man’s boon, as they say: Since then, more and more companies have found ways to leverage the impending climate crisis for profit. In Windfall: The Booming Business of Global Warming (2014), journalist McKenzie Funk set the stage for three systemic effects of global warming - melting ice caps and glaciers, droughts and desertification, and floods resulting from rising oceans – and highlighted global players that are already in motion to seize the opportunities:
- For oil giants such as Chevron, Shell, Rosneft and Statoil, a huge market is opening as the Arctic ice retreats offering massive new oil fields and shipping routes. Greenland’s oil reserves make it “an untapped Gulf of Mexico in the North Atlantic,” as it continues to push for independence from Denmark, while readying itself for millions in new tax revenue from shipping, mining and farming opportunities. Alcoa even has plans to build a huge aluminum smelter powered by the melting ice.
- Agri-business giants including Monsanto and BASF have filed over 150,000 patents for food plant seeds to corner the GMO market; China is investing in huge farms in newly free African countries; and Goldman Sachs and Morgan Stanley, side-by-side with sheiks in the United Arab Emirates, are buying up farmland in anticipation of future droughts and crop failures.
- Israeli firm IDE, an example of what Funk calls an "integrated global-warming response company," is leveraging its desalination technology to build new snowmakers for ski resorts in the Alps facing warmer seasons.
- Dutch engineers see sea-level rise as an opportunity, and companies such as Dutch Docklands are selling flood-management expertise to countries new to the threat of sea-level rise, pitching visions for floating cities in the Maldives and other regions that will find themselves underwater in the future.
Funk chronicles the rising class of “profiteers of climate change [and] brings a dizzyingly abstruse phenomenon down to a more human scale,” wrote The Wall Street Journal. “It turns out that climate change is rather like the financial crisis. Those who may have caused it with their emissions are likely to profit most from it, and the gulf between the world's rich, who can protect themselves from its worst effects, and the poor, who cannot, will only widen," the Journal asserts.
What's the latest in impact investing?
Explore the latest tools, guides, platforms and organizations making it easier than ever for investors to put their money where their values are — at New Metrics '19, Nov. 18-20.
I recently caught up with Funk to gain more insight.
Have there been any significant changes since your book was published?
MF: Just before the book was published — but too late to make any changes to the text — Monsanto paid nearly a billion dollars to purchase the Climate Corporation, which provides weather insurance for farmers, along with a suite of apps to help make decisions in a ‘weirding’ world. Both brands were in the story already. But that Monsanto would pay that much says something about the scale of the climate market to come.
Is your thesis that every disruption is also generative?
MF: I can't think of any examples — in any human or natural system — where disruption is 100% purely bad for every single player affected. But that's different than saying we live in a zero-sum world. Climate change is producing more far more losers than winners, and bigger losses than wins.
Does your research indicate a greater future societal divide between the haves and the have-nots?
MF: Yes, the major point of the book is to say that climate change exacerbates the existing divide between haves and have-nots. It's not the only such trend — look at the increasing wealth gap in the U.S. for instance, which has little to do with climate change — but in the long term, may be the biggest.
Do you think the climate crisis is reversible?
MF: I do think it's reversible on a geologic scale, absolutely. What that means for humankind in the meantime, especially our most vulnerable, is an open question. We won't reverse it nearly quickly enough.
Is there greater profit to be had in this coming boon from the climate crisis than in longer-term righting the ecosystem so some balance is restored?
MF: No, I don't think there's a greater profit to be had in disaster, and that's reflected in where most of the money is still going. Even as we continue failing to address our emissions problem, even as we commit to more and more temperature rise, most of the smart money is flowing toward "green" technologies that will help slow warming. Adaptation is still a much smaller industry than mitigation. It will grow as the planet further warms, but if we're to have much hope, both will grow.