Adaptation Investors:
Profiles and Playbooks
Editor's Note
The profile series is where we highlight and map specific sub categories within the adaptation space. This edition, our very first, is about investors. Investors investing, and in one instance, laying the groundwork to invest in, climate adaptation.
2025 is gearing up to be a significant year for adaptation investment. Much has been clarified and much is new. New financial models and technologies are springing up and taking hold of the industry’s imagination. The stages and players involved are demonstrably even more focused. And frank. Public and philanthropic dollars are stepping in to de-risk adaptation plays. AI-driven climate risk analytics are becoming a core asset class, helping investors price risk and crack new financial products like resilience bonds and parametric insurance.
This profile piece essentially categorises seven such investment organisations and the sophisticated operators defining them. The Q&As are an opportunity to see what they see. To follow their interpretations, diagnoses and assessments of the climate problems and solutions they have narrowed in on. To see the investor landscape from their lens is also an opportunity to draw sharper distinctions between adaptation and resilience. The distinctions in the business models, processes and the internal impediments, be they cognitive or cultural, that have prioritised one at, arguably, the expense of the other.
Until recently, adaptation investing didn't have any distinct characteristics. And now that that’s changing, the evolving perspectives and playbooks that, up until now, were isolated to industry insiders and seemingly floating in the public periphery, are landing and starting to fuse with bright new suppliers, new tech and the financial neural network holding it all together.
What jumped out at me when I was reading the interviews was the semantics. You can hear in the answers below how agency is taking precedence over process. There is a lot of sound judgement on display. The investors we interviewed demonstrate a specialised, independent brand of reasoning. What we are listening to here are the first few seconds of the first movement of a symphony. A drastic departure from the cacophony of adaptation investment spiel that filled the airwaves in preceding years. It’s in that shift, in the coalescing, that you can see a lingua franca and a critically important investment space starting to take shape, albeit slowly.
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The Tech Company Investing in Sustainability
Q. Why is private investment in climate adaptation so low?
Private investment in climate adaptation has lagged because the business models aren’t as clear-cut as mitigation—there’s no equivalent of power purchase agreements or corporate carbon buyers, and the go to market is still maturing.
But that’s changing fast: adaptation startups are gaining traction, corporate players are realising resilience is a bottom-line issue, and new financing models are making these bets a lot more attractive.
Top 3 key trends in climate adaptation finance in 2025
Blended Capital Goes Mainstream – Public and philanthropic dollars (including corporate foundations like Cisco Foundation) are stepping in to de-risk adaptation plays, making them way more investable for VCs and institutional capital.
Adaptation and Resilience Tech Finds Its Market – Startups are cracking the go to market puzzle, with insurers, agribusiness, and infrastructure players emerging as major buyers of resilience solutions.
Data is the New Currency – AI-driven climate risk analytics are becoming a core asset class, helping investors price adaptation risk and unlocking new financial products like resilience bonds and parametric insurance.
Three major gaps in climate adaptation finance
Massive Funding Shortfall – Developing countries need up to $359 billion annually for climate adaptation, but current funding is less than a tenth of that, creating a huge financial gap.
Delayed Fund Disbursement – Even when funds are pledged, only about 66% actually reach the intended projects, slowing down critical adaptation efforts.
Insufficient Local Financing – A mere fraction of adaptation finance is directed to community-level initiatives, leaving the most vulnerable populations without the resources they need to build resilience.
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
At the Cisco Foundation’s Regenerative Future Fund, we see information asymmetry as an opportunity rather than a hurdle—it’s where impact investors can add real value. Investing at Seed and Series A, we rely on a mix of deep sector research; operator insights; and partnerships with scientists, policymakers, and local communities to get a clearer picture of what works and what’s the most transformative. Since adaptation and resilience markets are still evolving, we focus on founders and teams that understand their customer deeply, have clear impact metrics, and are building business models that can scale. By staying close to the ecosystem and sharing knowledge across our portfolios, we turn gaps in information into smarter bets on resilience.
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The Cisco Foundation was established in 1997 by a gift from Cisco. The Foundation partners with organisations to create, validate, and scale digital solutions that promote sustainability, well-being, and self-reliance in economically underserved communities worldwide. Cisco Investments, Cisco’s venture funding arm, invests in transformative companies focused on clean energy, carbon removal, and circularity.
The City VC and Private Equity Principals
Q. Why is private investment in climate adaptation so low?
Adaptation has historically received only 3-5% of climate finance. And, while funding for climate mitigation startups increased 13X from 2013-2023, funding for climate adaptation startups only doubled during that time.
Traditionally, governments and cities have been the largest buyers of adaptation solutions in the form of hard grey infrastructure to protect coastlines and other areas from flooding.
That’s increasingly changing due to extreme weather events, which are becoming more frequent, leading to a more than 500% increase in natural disaster hard costs since 2000.
Last October, two hurricanes alone caused ~$80B in property damage in the US. The January fires in LA caused ~$30B in property damage. They’re a microcosm of the ~$450B+ in damages in 2024, growing at an accelerated pace already in 2025. Alongside homeowner damages, the World Economic Forum estimates that $4 trillion in corporate assets alone will be at risk in the next 5 years.
Top 3 key trends in climate adaptation finance in 2025
1. 2 in 5 Americans are already likely to have invested in home hardening and adaptation landscaping solutions, and 1 in 3 Americans are likely to (or already have) bought a back up power source like a generator or home battery. Given the highly visible disasters over the last year, we expect this trend to continue, and homeowners to continue to invest in making their homes resilient – whether that’s in better roofing solutions in the Midwest due to increased hail, vegetation management to prevent (or limit the damage of) wildfires, flood insurance in East Coast cities, in-home energy storage in Texas due to power outages, and more.
2. Corporates and infrastructure players will increasingly begin to build resilience into their CapEx decisions, to ensure the long-term viability of their assets. This is especially true (and urgent) for utilities. The US has the largest number of power outages on a per capita basis of any developed country globally, driven by climate disasters. Utilities already spend $50B a year to recover from climate-related disasters, and have a $500B gap in infrastructure that needs to be upgraded based on IFC analysis. These corporates need industry-specific products that enable them to evaluate cost-benefit tradeoffs of future investments, like Rhizome’s work in the utility space.
3. More founders will build adaptation and resilience into their mitigation solutions, creating 'dual benefit' products within the climate space. For example, startups building rooftop solar solutions will design them for higher wind and hail likelihoods, HVAC innovators like Harvest Thermal will build energy storage into products that reduce energy consumption and emissions, and more. These changes are what we at Streetlife call 'obviously better stuff' for consumers and corporates alike.
4. Despite the talk in Washington, the federal government will continue to buy adaptation solutions that enhance force readiness, energy security, and overall operational resilience. The Department of Defence (DOD) bought $3.7B in climate resilience products last year – from distributed energy assets and water resilience to adapting facilities to increased heat and other conditions – and will continue to do so.
Three major gaps in climate adaptation finance
There are so many gaps in adaptation funding. Just three sectors to call out, related to the above:
1. Building on my comments above, startups that target industry-focused resilience needs (within the corporate and infrastructure spaces), with both climate risk and financial insights. We would love to see solutions for transportation infrastructure and energy assets in particular.
2. Startups that focus on coastal resilience solutions. Today there is only one NOAA storm gauge for all of Manhattan in New York City, the only city with a parametric storm surge insurance product (the MetroCat Re). If we’re going to help cities and corporates better prepare for storm conditions, insure assets, and engage emergency management operations through those storms, we need more granular (and real-time) visibility.
3. Startups focused on a range of solutions for extreme heat conditions – from solutions for physical environments like shading, reflective surfaces, and thermal efficiency, to solutions for body cooling like wearables.
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
At Streetlife, we invest in companies that solve core business pain points across five core sectors. Because we invest in the built environment and adaptation, we’re almost 'anti-fad / anti-FOMO' investors. The built environment accounts for 40% of emissions, but only gets 8% of venture capital. Climate disasters threaten $4T in corporate assets by 2030, and is expected to cause 14.5M deaths by 2050 – yet gets only 3-5% of climate investments. We’ll continue doing what we always do: underwriting strong companies that scale critical solutions in the industries that need them most.
Streetlife Ventures invests in B2B pre-seed and seed stage startups at the intersection of climate and cities across five main sectors: adaptation, energy, mobility & logistics, buildings, and waste & water.
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The New-to-Adaptation VC
Q. Why is private investment in climate adaptation so low?
One contributing reason is the lack of well-trodden business models and commercial successes to point to as examples, as well as the need to quantify value more precisely. Many investors active in climate adaptation are coming from an adjacent realm, and looking to apply their known playbooks in this arena, which may not work well. In our case as an example, coming from climate mitigation investing, if we look at an air purification adaptation company that has a benefit of energy savings, we know how to quantify the value of the energy savings, but need to sharpen our understanding and methods to be able to quantify the primary adaptation benefits.
Top 3 key trends in climate adaptation finance in 2025
Wildfire tech, urban infrastructure, crop production and resilience.
Three major gaps in climate adaptation finance
Marine and terrestrial ecosystems, health and safety, water and sanitation. But there are many more - Tailwind's gap analysis is a great guide here.
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
We are learning all we can about the adaptation landscape by working with expert groups and communities like Tailwind and Adapt Unbound. Ultimately, we think it may take some time for the investor community to have a reliable view on returns, but the climate crisis won't wait. As a catalytic investor with unique capital and risk/return requirements, we will both (a) build internal tools for assessing impact, and (b) blaze the trail with adaptation investments we believe can bring extraordinary impact and value, despite imperfect and full information.
Azolla Ventures is an impact-first investor supporting early-stage technology companies that can achieve large-scale climate impact. Previously focused exclusively on climate mitigation and emissions reduction, Azolla will soon begin supporting adaptation and resilience solutions.
The Venture Arm of Big Tech
Q. Why is private investment in climate adaptation so low?
Private investment in climate adaptation lags far behind mitigation due to several key challenges. Adaptation solutions are often less well-defined, highly localised, lack regulatory incentives, and designed to address chronic risks or unpredictable 'black swan' events, making them difficult to commercialise. The highest demand comes from governments, municipalities, and utilities—entities with long sales cycles and constrained budgets—deterring private investors. Additionally, while adaptation and resilience investments generate clear economic benefits, monetisation remains a challenge due to ambiguity over who should bear the costs. As a result, public funding has largely led the way in adaptation financing.
Top 3 key trends in climate adaptation finance in 2025
Supply Chain Resilience – As climate change exacerbates supply chain disruptions, companies will increasingly invest in circular economy solutions, inventory and surplus management, and other risk mitigation technologies.
Off-Grid Energy Generation – The surge in data center development and efforts to reduce dependency on grid interconnection amid capacity constraints have fueled a growing push for off-grid electricity generation. However, these solutions are poised to evolve into critical climate adaptation drivers, addressing the systemic risks posed by climate-induced disruptions to the broader energy infrastructure.
Insurtech Innovation – As entire industries and communities become 'uninsurable', Insurtech solutions that incentivise resilience and active risk management will play a critical role in bridging insurance gaps.
Three major gaps in climate adaptation finance
Coastal Resilience – Nature-based solutions for coastal protection remain underfunded due to high upfront costs and uncertainty over financial responsibility.
Resilient Infrastructure – The construction industry has been slow to adopt resilient materials, as seen in disasters like the LA fires, leaving buildings vulnerable to extreme weather events.
Disaster Recovery – Current recovery efforts are largely reactive, with limited investment in proactive, efficient disaster response and rebuilding strategies.
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
At Hitachi Ventures, we take an outside-in approach, engaging with investors, founders, and subject-matter experts to inform our thesis-building and navigate information gaps. We then leverage Hitachi’s deep expertise to gather further insights, reducing uncertainty and strengthening our investment decisions.
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Hitachi Ventures is the global venture capital arm of Hitachi Ltd., investing in early-stage startups across digital, environmental, industrial, and healthcare technologies.
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The Adaptation Investment Working Group
Q. Why is private investment in climate adaptation so low?
The capital markets:
1. don’t understand the opportunity for their participation, see resilience as a problem for governments to address (not the private sector).
2. don’t understand the terminology around climate and climate solutions.
3. don’t see an opportunity to make money by investing in 'resilience'.
4. Companies that are offering solutions may be 'hidden' – they don’t always identify themselves as 'climate solutions companies' (can give examples if needed – think healthcare companies developing drug treatments and vaccines for emerging diseases related to climate change and extreme heat).
Top 3 key trends in climate adaptation finance in 2025
1. Unveiling a hidden market, showing that resilience companies are already attracting capital, and demonstrating that the current market for A&R is huge. This is what I called creating a sense of 'FOMO' – fear of missing out on a large investment opportunity (examples: GARI showed the existing market for listed equities in The Unavoidable Opportunity, Tailwind recently estimated the current A&R market at $1.4 trillion based on demand/spend).
2. Showcasing specific investible company examples across sectors and growth stages (i.e. energy, healthcare, etc. from startups to venture capital to private equity to listed equities).
3. Blended finance – even though this will have some headwinds due to U.S. policy and budget cuts, it’s still a strong tool globally for intertwining public and private financing to make investments work. Similarly, using all levels of incentives (NGO, state, local, corporate) to help attract capital and create demand for resilience solutions (example: investment in startup that reduces food waste, with incentive to avoid local tipping fees for food waste).
Three major gaps in climate adaptation finance
1. The narrative on investing in resilience – needs to flip from focusing on lack of A&R investment to showing traction and momentum.
2. The terminology – needs to be simplified to terms the average investor can relate to, instead of using jargon from the international development world. Most adaptation and resilience solutions are familiar products. In the energy sector, think products that provide grid resilience. In healthcare, think new vaccines and drug treatments. In AI it could be flood forecasting or remote diagnostics. Focus on needs rather than 'climate' labels to help investors realise they already know this category.
3. The perspective - Instead of treating adaptation as a new sector for investors to learn about, focus on adaptation as a lens for any sector – i.e. if you invest in energy/healthcare/real estate/agriculture, etc., look at which companies in your sector are building for the future with climate in mind, etc. Show resilience as a growth driver for any sector and 'Skate to where the puck is going'.
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
Resilience investments are a hidden market, with successful companies that are already attracting capital and delivering strong returns in every sector. We are on a mission to demystify these investment opportunities.
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GARI brings together private and public sector stakeholders to discuss and drive investment in climate adaptation and resilience.
The Water-Tech VC
Q. Why is private investment in climate adaptation so low?
It's a combination of a logical historical focus on mitigation, and the expertise of existing climate investors being focused on energy and mitigation. Investors invest in what they know, which is energy and energy’s adjacencies. The entrepreneurs have focused on the same thing, so the combination isn't great for traction outside those areas. We have some work to do in terms of proving the case for ventures in adaptation, but the business cases are becoming more and more obvious. It also helps that adaptation investments are by definition responding to pain in the market - climate change is driving a truck through so many aspects of billions of people's lives. Adaptation investments respond to that pain, versus building a market for CDRs that we hope companies will continue to buy, for example.
Top 3 key trends in climate adaptation finance in 2025
1. Growth capital elevating the most developed companies.
2. Private Equity is very thirsty for water deals.
3. Venture financing for water will double to $2bn in 2025.
Three major gaps in climate adaptation finance
1. Water - that it accounts for at best less than 3% of overall climate ventures is insane. The US's infrastructure has literally aged out, and most emerging market infrastructure hasn’t been built yet.
2. Just like everyone else, dedicated and imaginative First of a Kind (FOAK) financing would help a lot.
3. More LP capital - a bit self-centered…
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
Same way as we always have! We work hard to understand the opportunities in front of us, and as water specialists we tend to have a differentiated understanding both of an array of technologies and of the markets being served. We won't always be right, but we won't be wrong for the wrong reasons, and that's a big asset.
Burnt Island Ventures invests in and supports entrepreneurs developing scalable solutions to address the global water challenges exacerbated by climate change.
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Q. Why is private investment in climate adaptation so low?
Until recently adaptation didn't have any distinct characteristics that would let you track it in one piece. A bulk of what we consider adaptation would just be civil engineering expenditures for state and local governments, infrastructure, or even crop insurance. I think it's less likely that it's low, and more likely that it isn't yet coalesced into one asset. This was true for solar and wind power, too. Did you invest in it like a power plant? What was the return profile, and how many other financial instruments could support it? Now it's a fully mature asset that has experts and specialists purely for the investment in specific types of solar and wind.
Adaptation investment is actually quite high, but we see it reflexively. The Louisiana Coastal Master Plan, HVAC filtration systems for fire smoke, or even the increase in sports stadiums with roofs and air-conditioned boxes. What is the grand challenge, is getting the market and consumer to understand just how much adaptation is *required* for our way of life.
Top 3 key trends in climate adaptation finance in 2025
2025 is finally the year adaptation takes off, especially what I call ‘readiness’ investments. I expect to see more fire suppression technologies (better chemicals, automated systems, robots). I also expect to see a policy fight in California and Florida around the pullout of insurance companies, and a public one similar to the fight over healthcare. Last, we will see extreme approaches start to emerge as philanthropy and venture capital enter the space directly. This might include radiative forcing, cloud seeding, or land lift injections.
Three major gaps in climate adaptation finance
The main thing is still the main thing: Flood damage is woefully under invested. Modeling, small government mobilisation, and cost for engineered solutions each need improvement. Nearly 2/3rds of every climate dollar we spend in a climate disaster is a flood. Beyond that, heat effects on productivity and safety are immensely under invested, and could cost trillions as temperatures increase, and lead to political unrest. Last is air quality, which has improved in some places, there's still much we can do as it is in many places the single greatest cost to health outcomes.
Q. How are you navigating information asymmetries and knowledge gaps in order to reliably calculate returns on investment and make informed investing decisions in 2025?
Deep long range domain knowledge, and strong technoeconomic analysis are the key points for determining the best assumptions of outcomes. Trying to time a market, cost of capital, or whim of policymakers is rarely a very bankable approach.
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