A Tale Of Two Climate Realities

I had the pleasure of attending my first New York Climate Week this year on behalf of Verdantix, meeting with sustainability and climate leaders across industries. I have to admit, I’d expected the tone to be relatively grim, given the current geopolitical environment. However, while there was a clear recognition of the stark reality that we face, the energy around the city was unmistakable – focused, urgent and full of momentum.

One of the themes that shaped the week was the word ‘and’. We’re at a critical crossroads: 2024 has brought record-breaking heat and mounting financial losses, even as decades of established climate science are being sidelined and regulatory drivers diluted. As David Wallace-Wells from The New York Times noted at Deloitte’s event, Debate: AI for Sustainability – Friend or Foe?, we are now living in the climate reality we once hoped to avoid when the Paris agreement was first signed.

There is no single solution: it’s time to take resiliency seriously, not only for firm longevity, but for broader societal stability. At Moody’s event, Redefining Resilience: Understanding Physical Risk and Uncovering Opportunity, Rowan Douglas, CEO of Climate Risk and Resilience at Howden Group, noted that insurance – once sidelined from capital markets – is becoming a key contingency for securing competitive financing and protecting portfolios.

Statements such as this can lead to discouragement. Climate change is one of the biggest challenges of our lifetimes – and tackling it can start to seem impossible. But – or perhaps ‘and’ (that word again!) – in these unprecedented times, there is also incredible opportunity.

At Jupiter Intelligence’s event From Risk to Return: Climate Adaptation and the Future of Financial Resilience, speakers from BlackRock, J.P. Morgan, the Man Group and OCC noted that the conversation is shifting from compliance to value creation. That theme came through clearly in my own discussions with clients. While ‘value’ may look different across sectors and firms, it’s there for the taking.

It's also clear by the numbers. In S&P Global’s panel discussion, Energy Pathways in a Transformed Marketplace, Karen Fang, Managing Director and Global Head of Instructure Finance at Bank of America, noted that in 2024 we hit the $2 trillion mark in climate finance investments, of which 40% occurred in China. There is a $15 trillion opportunity through to 2040 to revitalize and strengthen our infrastructure, to ensure that we’re prepared for current and future climate realities. Firms are preparing for this today, investing heavily in expanding their teams to be able to address these challenges directly.

Risilience, a climate risk analytics software provider, released its new Climate and Nature Risk Report during Climate Week, revealing that over a third of capital expenditures among 513 surveyed firms are aligned with their sustainability goals. To me, this signals a shift – and an indication that firms are ready to meet the moment, embedding sustainability and resilience within their workflows and tackling the threats to their industry head on.

It's clear – we need to prepare for the uncertainty that lies ahead. It’s getting hotter, the climate is becoming increasingly destabilized and we may not have all the tools at our disposal today to address the challenges of tomorrow. To paraphrase Adam Slakman, Managing Director and Head of ESG Americas at J.P. Morgan, a certain portion of investing in adaptation and resilience requires a leap of faith.

You may be wondering: where does Verdantix sit among these industry heavyweights? The answer is – right in the mix. Verdantix is well-positioned to support both vendors and buyers across our broad coverage areas. We serve as a critical connector between data, analytics and service providers, helping firms across sectors mitigate risk and uncover new opportunities.

If there’s one message that came through loud and clear this week, it’s that climate change is sector-agnostic. And if you're waiting for regulation to act, don’t – because you risk missing out on the trillions of dollars in value tied to the transition towards a more resilient, lower-emission economy.