Investing in climate adaptation is not just good for the planet, it's good business

The Guardian

10-04-2025

Among the many shocks currently facing the international development community is the new direction of the US administration on climate, and the implications worldwide for mitigation and adaptation efforts.
This is not uncharted territory. While a withdrawal from the Paris climate agreement is undoubtedly a setback, it no longer carries the same level of disruption as it did. The global community has become more resilient and will continue to advance climate action.
We are hopeful because much has changed since the first Trump administration. Although climate shocks have become much bigger (just ask Los Angeles), so too has the response. New technologies are being harnessed to predict extreme weather events and build stronger cities and farming communities. Around the world, resilient infrastructure is the hot new investment class, with more than $2tn (£1.6tn) in assets under management.
Investment is pouring into renewable energy, green transport and smart agriculture in an effort to both slow down the accumulation of heat-trapping emissions and adapt to our warming planet. The benefits of taking early action are well understood, even if the needs outpace the funding for it.
Africa was an early champion of climate adaptation. That is because 17 of the 20 countries most vulnerable to climate change are on our continent. We wanted to move beyond disaster management to forward-looking strategies that reduced our exposure to climate risks. We sought solutions to protect our people and businesses from ever-more destructive weather extremes.
Adaptation is not simply a means of minimising the damage inflicted by extreme weather, although that alone would justify the investment. Done properly, it can transform economies, as well as strengthen them against natural disasters.
Climate adaptation is a framework for protecting infrastructure, securing food systems and creating new business and job opportunities. And it is being aided by a thriving market in climate solutions – from weather analytics and drought-resistant crops to green finance and parametric insurance against weather-related events, which pays out claims based on a predetermined trigger such as wind speed to help communities recover faster from natural disasters. These are the foundations that allow our communities and businesses to flourish.
Africa is proof that investing in climate resilience works. The continent's leading initiative in this area – the Africa Adaptation Acceleration Programme (AAAP) – has already channelled more than $15bn to strengthen essential systems against climate shocks. These funds are helping to secure the adaptability and livelihoods of nearly 60 million vulnerable people in 40 countries. Almost one million jobs have been created in the process.
Kenya was the first country in Africa to adopt a National Adaptation Plan. Its dependence on rain-fed agriculture, which accounts for a large proportion of livelihoods and economic activity, makes it especially vulnerable to droughts and floods.
Yet decisive action on climate adaptation has transformed these vulnerabilities into opportunities to accelerate green growth. Local entrepreneurs have pioneered solar-powered irrigation, and public-private partnerships are investing in water, sanitation and renewable energy. The country is a leader in geothermal power, which supplies nearly half of its energy needs.
These achievements exemplify adaptation's dual role as a protective shield against destructive events and a catalyst for sustainable development. Embedding resilience into public policy, urban planning and financial markets can safeguard communities and assets while stimulating growth.
Robust seawalls, for example, protect ports and international trade. Weather analytics and early-warning systems save millions of lives every year from impending weather disasters. Regenerative farming techniques revive degraded soils and increase crop yields. Nature-based solutions for restoring wetlands and woodlands reduce the impact of flooding and hurricanes.
Such measures often pay for themselves many times over, a 'resilience dividend' that compounds the economic and social benefits of preventive actions. These benefits multiply when governments, businesses and multilateral institutions collaborate to integrate adaptation into their decision-making.
This resilience dividend is real. It would be even greater if funding for climate adaptation matched Africa's needs. The Global Center on Adaptation estimates these needs at more than $50bn a year, whereas actual funding is only a fraction of that. Most climate finance comes from multilateral development banks, with hardly any private-sector involvement.
This is a shame because there are huge opportunities. The Global Center on Adaptation, through its dual headquarters in Rotterdam and Nairobi, is ensuring that adaptation solutions are co-created where they are needed most. The World Economic Forum estimates the market for climate adaptation solutions could be as much as $2tn a year.
Companies that develop cutting-edge solutions for climate adaptation – such as parametric insurance, weather analytics and water-efficient infrastructure – will gain a competitive advantage in a world where demand for these products and services is only likely to grow.
Investing in adaptation makes good business sense. It is the smart thing to do. Climate denialism should not blind investors and governments to the very real opportunities on their doorstep.
William Ruto is President of Kenya and Patrick Verkooijen is chief executive of the Global Center on Adaptation