Climate Adaptation Unlocking Value Chains with the Power of Technology 2025

The previous analysis of three key value chains shows that business leaders are beginning to recognize the benefits of developing and implementing adaptation strategies and the need to accelerate the deployment of adaptation systems. However, despite this growing awareness, three main challenges remain: –Demonstrating the value of adaptation investments to investors and other stakeholders to attract greater financial support. Companies need to better comprehend and articulate the risks posed by climate hazards, the costs avoided through adaptation and the opportunities these projects create, in order to secure backing from both private and public entities. Since risks and rewards are often unevenly distributed across the value chain, it is essential to value and distribute costs and benefits fairly to incentivize all stakeholders. –Navigating the lack of standardized metrics, frameworks and regulation around adaptation. Organizations need to keep evolving to comply with current and future climate-related regulations as they adapt to climate change. Developing standardized approaches early on will help them avoid potential penalties, strengthen stakeholder relations and establish themselves as sustainability leaders. –Accessing data, technologies and capabilities to roll out adaptation strategies at speed and at scale. Limited or costly access to relevant and comprehensive climate and value chain data restrains effective value chain-wide predictive modelling and data-driven decision- making. Max Gulde, CEO of constellr, explains: “Traditional Earth observation models provide discrete images, where a single image is only encapsulating 2% of the data that is useful, while you still have to pay for the entire image”. Unequal access to advanced technologies, such as analytical tools and affordable computing resources, coupled with gaps in internal expertise and capabilities limit companies’ (especially SMEs’) ability to analyse data, model scenarios and execute adaptation strategies. To overcome these challenges, global leaders can start by rethinking their approach to innovation in adaptation and asking the question: Am I better off adapting alone or collaborating with others in the value chain? In this context, it may be worth drawing on James Moore’s idea of a business ecosystem, wherein a company, along with its partners, co-evolves novel capabilities around an innovation. The ecosystem’s partners work cooperatively to support the new product, meet common objectives and, eventually, develop the next innovation. Relevant in the context of climate change, Moore likened companies to species in a biological ecosystem, where they co- evolve, cooperate and compete, influencing each other’s survival.60 In the same way, value chain-wide adaptation can be accelerated through collaboration platforms – technology-driven environments in which stakeholders, along a value chain or within a region, share data, tools and resources to drive innovation and scale-up climate adaptation solutions. Collaboration platforms – objectives Collaboration platforms serve three main objectives: to scale-up, innovate and protect.1. Scale-up Collaboration on adaptation projects should aim to maximize impact by pooling investments, sharing costs and reducing individual risk. Expanding project reach can generate collective benefits and have a positive influence on nature and communities beyond the immediate value chain, laying the groundwork for long-term protection. Adaptation applications will become more economical as their use expands along the value chain. 2. Innovate Research and innovation in adaptation must accelerate by fostering breakthrough technologies and solutions that are specific to the value chain. Leveraging start-ups and open-source platforms will enhance the adoption of new technologies, driving sustained progress. 3. Protect Ultimately, value chains must safeguard themselves against future hazards by implementing technology- driven solutions, such as early warning systems.61 Ensuring compliance with unified regulations and standards on adaptation will further secure long- term sustainability.2.1 Framing objectives and roles of collaboration platforms Climate Adaptation: Unlocking Value Chains with the Power of Technology 29