Climate adaptation for private equity funds: from risk assessment to value creation

Physical climate risks and private equity: what's at stake?

For years, the climate agenda in the investment industry has been dominated by decarbonation. Adaptation, the ability of companies to manage and respond to the physical impacts of climate change, has remained in the background. That is changing.

Even under a highly optimistic +1.5°C warming scenario (a threshold we are already approaching), "once-in-a-century" floods events are projected to occur approximately every 30 years and heat extremes are ~4.1x more frequent.

The financial materiality of these risks, operational disruptions, asset impairments, supply chain vulnerabilities, is becoming harder to ignore across sectors and geographies.

For investment funds, climate adaptation is not only a risk management issue. It is also a lens for identifying companies whose business models are well-positioned in rapidly growing adaptation markets, across sectors ranging from water management and infrastructure to agriculture, construction and healthcare.

A joint report to turn adaptation into action

Blunomy partnered with the Climate Working Group of the France Invest Sustainability Commission, which hosts the French chapter of the International Climate Initiative (iCI), on a collaborative effort involving several fund managers and portfolio companies. The objective: equip private equity practitioners with a clear, pedagogical reference guide on climate adaptation, covering key concepts, analytical frameworks and sector-specific considerations, to help them integrate these issues throughout their investment processes.

Publication 01 - Reference guide on Climate Adaptation - Executive summary

Publication 02 - Reference guide on Climate Adaptation - Knowledge synthesis

→ Download the executive summary and the synthesis

Climate Adaptation Toolkit for Private Equity Funds

To support fund managers in taking action, Blunomy and France Invest have developed a practical, entry-level toolkit to help structure the approach to climate adaptation, assessing portfolio companies' maturity in managing physical risks, estimating potential financial impacts on their business models, and conducting first assessments drawing on public data sources and investee information.

→ Get the toolkit

→ Contact our team if you have any question or a support how the climate adaptation toolkit can be applied to your portfolio companies: hello@theblunomy.com

Supporting investment funds at every stage of the investment lifecycle

Blunomy works with investment funds to translate climate adaptation from a strategic intention into operational reality, from LP fundraising through to asset management and exit.

Any questions? Get in touch: hello@theblunomy.com