Hazard alerts among climate adaptations with big investment potential: Report

Need for solutions triggering creation of firms working on such innovations

- Audrey Tan

Hazard warning systems, flood pumps and barriers, as well as emergency medical services, are among the solutions identified in a new report as having the most investment potential over the next five years, as the world prepares to grapple with the impact of climate change.

The May 7 report by global management consultancy BCG and Singapore's investment firm Temasek shows that expenditure for climate adaptation and resilience is projected to rise to between US$500 billion (S$646 billion) and US$1.3 trillion a year by 2030.

Financing for climate adaptation projects currently stands at around US$76 billion a year, with governments accounting for most of it, the report noted.

But the growing need to deploy such solutions to cushion people from climate impact is triggering the creation and growth of companies working to develop, deploy and scale climate-related innovations worldwide, said the authors.

This presents an opportunity for investors.

The 36-page document, released during the Temasek-convened sustainability conference Ecosperity Week, adds to the growing momentum among the global climate community to make a business case for climate adaptation — often the less funded prong of climate action, as compared with emissions-cutting activities.

Singapore sovereign wealth fund GIC had on May 2 released another report pointing to the US$9 trillion investment opportunity for this sector by 2050, up from the current US$2 trillion.