From Risk to Reward

This report by Boston Consulting Group (BCG), the Global Resilience Partnership, and USAID outlines the business case for private sector investment in climate adaptation and resilience. It identifies three primary opportunities: 'Protecting' existing assets and supply chains, 'Growing' the market for adaptation solutions, and 'Participating' in public sector implementation. The analysis emphasizes that adaptation is no longer a theoretical risk but a business imperative, particularly in emerging markets and developing economies (EMDEs), where investments often yield high benefit-to-cost ratios.

• Investments in climate adaptation and resilience can provide substantial financial returns, with benefit-to-cost ratios (BCR) for many companies ranging from 2:1 to 15:1. Certain specific measures, such as water collection and storage, have demonstrated BCRs as high as 53:1.
• The report identifies a 'Protect' opportunity where companies can safeguard value at risk by financing measures to protect assets, supply chains, and operations. Analysis of CDP disclosures shows that approximately 25% of over 18,700 companies identified the financial materiality of physical risks and the actions they are taking to manage them in advanced economies and emerging markets and developing economies (EMDEs).
• There is a 'Grow' opportunity for investors to finance companies developing adaptation and resilience solutions. The report found a robust pipeline of opportunities across various sectors, with food and agriculture accounting for 38% of tracked funding, energy 34%, health 10%, and water 4%.
• Adaptation and resilience solution providers are achieving strong valuation multiples. The median valuation multiple in the report's analysis was 9 times revenue, with some companies reaching as high as 77 times revenue. High multiples were particularly noted for Internet of Things (IoT) solutions in agriculture, which ranged from 3 to 77 times revenue.
• The 'Participate' opportunity involves private sector collaboration with the public sector to finance capital projects. This can take the form of public-private partnerships (PPPs), such as the Stormwater Management and Road Tunnel (SMART) in Malaysia, which used a 40-year concession agreement to combine flood protection with a revenue-generating motorway.
• Traditional accounting and valuation methods often fail to price in physical climate risks, leading to underestimated financial exposure. The report notes that infrastructure investors could risk losing over half of their global portfolios by 2050 if climate change continues unabated.
• The report highlights the role of the US government's President’s Emergency Plan for Adaptation and Resilience (PREPARE), which involves 19 federal agencies working to mobilize private capital and public investments in sectors impacted by climate change in developing countries.
• In EMDEs, local small and medium enterprises (MSEs) are critical for adaptation but often face capital constraints. The report mentions the UN Capital Development Fund's use of a results-based payment model to help MSEs in Africa secure upfront financing from local banks using donor agreements as collateral.

APA

Chau, V., Dhanani, Q., Matthews, N., Caines, C., Stroman, T., Gibbs, R., Yee, M., & Fielding, P. (2023). From Risk to Reward. Global Resilience Partnership. https://www.globalresiliencepartnership.org/wp-content/uploads/2023/12/from-risk-to-reward-report.pdf

Chicago

Chau, Veronica, Qahir Dhanani, Nathanial Matthews, Charmian Caines, Trish Stroman, Rebecca Gibbs, Maxine Yee, and Pippa Fielding. From Risk to Reward. Global Resilience Partnership, 2023. https://www.globalresiliencepartnership.org/wp-content/uploads/2023/12/from-risk-to-reward-report.pdf.

Wikipedia

{{cite report |last1=Chau |first1=Veronica |last2=Dhanani |first2=Qahir |last3=Matthews |first3=Nathanial |last4=Caines |first4=Charmian |last5=Stroman |first5=Trish |last6=Gibbs |first6=Rebecca |last7=Yee |first7=Maxine |last8=Fielding |first8=Pippa |title=From Risk to Reward |publisher=Global Resilience Partnership |date=December 2023 |url=https://www.globalresiliencepartnership.org/wp-content/uploads/2023/12/from-risk-to-reward-report.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chau2023from, author = {Chau, Veronica and Dhanani, Qahir and Matthews, Nathanial and Caines, Charmian and Stroman, Trish and Gibbs, Rebecca and Yee, Maxine and Fielding, Pippa}, title = {{From Risk to Reward}}, institution = {Global Resilience Partnership}, year = {2023}, month = dec, url = {https://www.globalresiliencepartnership.org/wp-content/uploads/2023/12/from-risk-to-reward-report.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }