Enduring the Tempest: Guiding Investments in Climate Change Resilience
In the year 2025, Local Pensions Partnership Investments Ltd (LPPI) published a document detailing their investment strategies, with a particular focus on climate adaptation and resilience. The document, intended for Professional Clients in the UK only, is proprietary and confidential, and should not be shared without LPPI's prior written consent.
The document comes at a time when the world is grappling with the escalating effects of climate change. Severe weather events such as wildfires, heatwaves, droughts, and floods have been on the rise globally, with the number of extreme weather events increasing by 83% in the 20 years to 2019 compared to the prior period.
In response to this growing challenge, global spending on climate adaptation more than doubled in the five years to 2022, reaching $76bn. According to the World Resources Institute, every $1 spent on climate adaptation can yield over $10.50 in benefits.
The document by LPPI highlights several key investment themes for climate adaptation and resilience. These themes focus on sectors and solutions critical to enabling large-scale climate adaptation efforts that require significant private capital. The themes include:
- Climate-adapted agricultural inputs that boost productivity despite climate stresses.
- Engineering solutions for flood defenses to protect communities.
- Building materials designed for increased climate resilience.
- Cooling technologies to mitigate extreme heat impacts.
- Emergency medical products and services to respond to climate-related health risks.
These themes align with the broader sustainability focus of Temasek, a Singaporean investment company, which has sustainability-aligned investments valued at S$46 billion as of FY2025. Temasek's investments cover key areas such as food, water, waste, energy, materials, clean transportation, and the built environment, all of which contribute to climate adaptation and resilience.
The Private Equity Opportunity in Climate Adaptation and Resilience, a study conducted by BCG, Temasek, and Ecosperity in May 2025, emphasizes the enormous market opportunity for private capital to invest in these adaptation solutions. The global adaptation market is expected to reach US$1.3 trillion by 2030.
The UK, too, has been experiencing the effects of climate change. This year, the UK experienced its hottest June on record. However, less than 5% of UK homes have air conditioning, indicating a need for investments in cooling technologies.
LPPI's Environmental Opportunities Fund includes climate adaptation as one of its three environmental objectives. The Fund aims to invest in companies that are making a positive impact on the environment, including those that are developing climate resilient building materials such as self-healing concrete and heating and cooling investments.
The document also notes that the International Chamber of Commerce reports that 4,000 extreme weather events caused $2 trillion in economic losses in the decade to 2023. CPI forecasts up to 3x as much annual spend required by 2030 for climate adaptation.
It is crucial to invest wisely in climate adaptation and resilience to mitigate the economic and health impacts of extreme weather events. The World Health Organisation estimates over 175,000 annual heat-related deaths in Europe alone over the 20 years to 2019.
In conclusion, LPPI's document provides valuable insights into the key investment themes for climate adaptation and resilience. By focusing on sectors such as climate-adapted agricultural inputs, human-engineered flood defence, climate-resilient building materials, cooling technologies, and emergency medical products and services, private capital can contribute significantly to climate crisis mitigation, nature-positive outcomes, and inclusive growth.
- The document by Local Pensions Partnership Investments Ltd (LPPI) underscores the significance of financing for climate adaptation and resilience, a growing concern in light of the escalating effects of climate change.
- In line with the focus on climate adaptation, LPPI's Environmental Opportunities Fund invests in sectors such as climate-adapted agricultural inputs, which are crucial for enabling large-scale climate adaptation efforts that require substantial private capital.
