Investing in Resilience: How Every Dollar Can Yield $10 in Climate Benefits

Well, the finance gap for climate adaptation just got a reality check.

A new report from the World Resources Institute says we've been undervaluing climate resilience by a wide margin.

It found that every $1 invested in climate adaptation generates more than $10 in benefits over a 10 year period, and this does translate to potential returns exceeding $1.4 trillion with average returns around 27%.

Annually.

Now the report also highlights a triple dividend of resilience impacting economic, social, and environmental benefits.

The findings could reclaim global climate talks ahead of COP 30 in Brazil.

Well joining me to break all of this down is Jeff Gitterman, CEO of Gitterman Asset Management.

Jeff, great to have you back.

Thank you so much for joining me.

Thanks for having me.

Well, we all know that when it comes to climate adaptation funding, it does false.

Short.

So what does this report tell you?

So they've been looking at climate adaptation and just looking at avoided loss economics.

So if we build this, will it save us money if a storm comes and the flood is 15 ft high, if this retaining wall goes up?

What it failed to really look at and all the prior examples and financing failed to look at is, is there an economic benefit to the social.

Environmental benefits that that retaining wall might actually improve to the local environment, the local climate.

There's very difficult once you get past the initial damage to look at what's happened to the water system, what's happened downstream to the water system.

Has it displaced people?

Has there been more migration?

Has there been less healthcare?

Has there been healthcare impact?

So all of these factors. now this first study has put really an economic dollar value on the social and environmental benefits, and this is after JPMorgan and GIC and man Group studies that have all said there's anywhere from a $6 for every $1 invested in adaptation there's anywhere from $6 to $45 of benefit available.

This is the first specific study that really gave.

Of data points on how do you really count the economic benefit of social and environmental factors.

Yeah, and as you mentioned, this report says every dollar invested in resilience can return 10.

So what's driving that and break this down for us.

So you look at what happened in Asheville.

So Asheville, you had the storm come in and you had an estimate of about $250 billion in damage for hilly.

I mean an incredible amount of damage that's insured losses and uninsured losses.

What it fails to account for is what have been the health impacts and the environmental impacts.

It washed away roads.

What did that do when it washed away roads to the balance of the rivers all downstream to the animals there?

What happens to the ecosystem that then occurs?

Do we wind up having thousands more deer, you know, it's this whole Downstream impact of the first initial impact of a climate storm or event, the fires in California, are there toxic chemicals that firefighters are breathing in?

What is the cost to that overinsured over the next 10 years for people that fall ill and the city and state have to cover that?

So all of these factors are now being brought back in.

It really goes beyond what we've talked about before.

Where if you spend some money on a house and that house is left standing or even better, if that house stops the fire because that doesn't catch on fire and then the downstream wind catches the next house on fire, if you have a smattering of houses like that in a community, does it stop the fire completely and then what are the long term impacts of stopping that fire much quicker?

Yeah, and Jeff, we are fast approaching CO 30, hard to believe, but it is the end of 2025 almost, so.

Break down the framework when it comes to the triple dividend and what should nations be paying attention to and why?

I mean, we focus a lot on mitigation and that's not working clearly.

The AI explosion is just destroying any net zero commitments that were there.

Everyone's pulling them back.

Coal plants are now being reinvigorated because of this huge demand for energy, so we've got to shift to the reality.

That we have to adapt or die.

I hate to say it that bluntly, but really at the rate that we're going on CO2 emissions, we're going to 3.5% at the current projections.

We need to put in adaptation and resilience investments and we need a lot of money flowing to do that.

But unlike mitigation, a lot of money flowing into that reaps an incredible amount of monetary.

An economic benefit downstream.

So investors think about three legs of the stool, water resilience, infrastructure resilience, and adaptation resilience.

Think of things like pest control companies that all of a sudden because of warming temperatures, their revenues are skyrocketing.

They're not cyclical anymore. heating and air conditioning companies, fire retardant companies.

These companies are all doing incredibly well.

Well, because unfortunately we're facing factors that we haven't had to face for years.

And Jeff, we have less than 60 seconds here.

So tell me about Climate Week and Climate Week's coming up.

We're hosting here Climate and Capital for the 4th year upstairs at the New York Stock Exchange on the 23rd.

On the 25th, I'm keynoting at the Javits Center at 9 a.m. in the morning on that Thursday, and then we're running water. and adaptation resilience programs the whole week during Climate Week.

You can check our website Guterman asset.com and please come out and show your support for dealing with the biggest problem that unfortunately this world has had to face.

Well Jeff, you and I will be talking more about Climate Week here on FinTech TV.

So as always, thank you so much for joining me and thank you so much for your insight and your perspective.

Thanks for having me.

Thank you.