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CLIC™ conversations: adaptation

CLIC™ conversations: adaptation

Communities and businesses around the world will face profound changes in their operational environment and way of life as climate-damage manifests. Even in a best-case scenario, adaptation to climate change is an integral part of the transition to net zero.

In the sixth and final episode of our series on the climate transition, we discuss the need to prepare for, and adjust to, the effects of climate change. Discussions surrounding climate change have historically remained centred on mitigation, and activities that are either already low carbon or can survive a carbon-constrained world. However, physical manifestations of climate-damage are occurring and will without doubt continue to occur, increasing the need for action on adaptation.

In our view, there are opportunities for companies positioned to increase climate-resilience, monitor risks and manage impact, and it is important to focus on these adaptation companies as much as low-carbon solution providers.

Head of Sustainability Research, Thomas Höhne-Sparborth notes the importance of adaptation activities aimed at improving preparedness and resilience and reducing vulnerability to the effects of climate damage: “A large proportion of our global population lives in cities and many of those are in coastal regions. Physical risks can potentially impact the lion’s share of our economy and it is something we must adapt to.”

Quantitative analyst Laura Garcia highlights the importance of developing and leveraging technological solutions: “These can be used to predict hazards, to plan for better cities and projects with nature-based solutions and accountability. They can be used to measure emissions and impacts, and highlight what companies are doing on the ground which allows us to make better investment decisions.” 

To find out more about the challenges and opportunities presented by adaptation activities, listen to the full episode below.

Top three takeaways for investors

-    Investors should be aware of the physical risks presented by climate change, understand how different sectors may be impacted, and engage on the subject of taking action. 
-    We cannot pin all our hopes on engineering and construction solutions, but must also look to nature for solutions that can help us both mitigate and adapt to climate change.
-    Adaptation efforts are reliant on technological solutions that allow us to perform increasingly granular analyses and monitor risks. 

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