Houses washed away by floods, power lines buckling under extreme heat, and drought threatening food and water supplies are becoming all too common – and they carry a massive economic toll. In the last year alone, the world experienced more than 150 extreme weather events, causing an estimated USD 320 billion in losses, around 40% above the decade-long annual average. The need to adapt and build resilience has become urgent.

Yet adaptation has not been a major magnet for capital. The sector attracted just USD 30 billion in new investment in 2024, far short of the hundreds of billions experts estimate is needed to mitigate climate-related financial damage in the coming decades. Encouragingly, this gap is beginning to close as adaptation and resilience move from distant concern to present-day priority.

According to the London Stock Exchange Group, 34% of large and mid-cap companies in the FTSE All World Index now reference adaptation measures in their annual disclosures, with corporate adaptation finance growing at a four-year compound annual rate of 21%. Firms providing adaptation solutions generated over USD 1 trillion in green revenue last year.

The technology industry is emerging as a key investor in adaptation and resilience. Extreme heat, droughts and floods threaten operations. Data center operators are increasingly seeking efficient cooling technologies, smart water management, large-scale solar, and sustainable building designs. These measures help maintain round-the-clock operations during extreme weather while cutting emissions and utility bills, conserving energy and water, and reducing strain on local grids and resources.

While companies do not commonly disclose adaptation spending, those that do report average outlays of around USD 200 million, with utilities and transport firms often investing USD 1 billion or more per company.

Tailwind, a strategic venture fund focused on resilience, highlights growing demand for adaptation solutions in sectors such as agriculture and infrastructure (satellite surveillance, high-resolution weather and seasonal forecasts, grid resilience), water (AI-powered flood risk assessment, smart metering, stormwater management), health (rapid diagnostics, wearable cooling, air quality sensors) and buildings (fire-resistant materials, thermal efficiency). Innovation across adaptation solutions is advancing rapidly, from genetic modifications for climate-resilient crops to early warning systems for health and advanced climate data models.

The economics of adaptation and resilience are also compelling. The World Resources Institute finds that every USD 1 invested can generate more than USD 10 in benefits to society over 10 years, implying potential returns of over USD 1.4 trillion. Projects often deliver a “triple dividend” of returns across financial, environmental and social dimensions, which should particularly appeal to impact-focused investors.

Regulation is another driver. In Japan, labour safety rules now oblige companies to protect employees from heatstroke through measures such as cooling systems and sun protection, with penalties for non-compliance including fines and even imprisonment. In the UK, trade unions are pushing for maximum workplace temperatures with improved cooling and energy efficiency measures.

Environmental and geopolitical upheaval are taking investors into uncharted territory. There will be new risks to manage, and investors must ensure the companies they own prioritise their own resilience. But there will also be new opportunities. Resilience-focused investors navigate uncertainty by not avoiding disturbance but actively engaging with it and investing in innovative solutions. In doing so, they can tap attractive growth potential in adaptation and resilience technologies – a burgeoning industry that deserves a place in every investor’s portfolio.

Read more: Sustainability at Pictet

– Author: Katie Self, Senior Investment Manager, Thematic Equities, Pictet Asset Management

– This contribution is brought to you by Pictet, a valued diamond event partner of Building Bridges 2026.