A glimpse of a possible 3°C world – every region will be affected in different ways FIGURE 13 Change in total annual precipitation Change in precipitation (mm)Likelihood of 1-year droughts Annual likelihood (%) No data <-100 -100 – -51 -50 – -26 -25 – +24 +25 – +49 +50 - +100 >+100No data 0-10 11-33 34-50 51-67 68-90 91-100No data <1x 1x 2x 3-4x >4xChange in frequency of historical "1-in-100-year” storm Times more/less frequent Changes in precipitation volume, drought likelihood and storm frequency will require new commercial solutions to manage more frequent and severe weather events Source: see endnote.48OBSERVATION 5 Climate adaptation markets are becoming material, including in the Global North In an increasingly warming world, solutions that help companies and countries adapt or build resilience are becoming as critical as those for mitigation. The markets for these solutions extend beyond the Global South – long the frontline of climate impacts – into the Global North, where risks are mounting just as rapidly.45 With a warming climate, extreme weather events will continue to become more frequent and severe, with commensurate increases in damage. The need to protect against these impacts will continue to grow (see Figure 13). Low- and middle-income countries face the greatest vulnerability, due to their higher-than-average exposure to extreme weather, generally weaker infrastructure, limited financial means to invest into resilience, and a higher economic reliance on agriculture and outdoor labour. But developed nations are also under pressure. In the US, droughts threaten water resources and storms threaten infrastructure, while wildfires in California in January 2025 caused an estimated $250 billion in damage.46 In Europe, Spain’s deadly floods in 2024 were a reminder that growing risks also loom in other advanced economies.47 Already a Multi-Trillion-Dollar Market: CEO Guide to Growth in the Green Economy 22

Already a Multi-Trillion-Dollar Market 2025