Climate Adaptation Unlocking Value Chains with the Power of Technology 2025

Executive summary As climate-related disasters intensify, leaders have no choice but to adapt Companies and organizations are becoming increasingly aware of the urgent need for adaptation. Supply chains, natural resources, physical assets, employees and bottom lines are being battered by an ever-rising number of climate hazards, such as severe storms, floods, droughts, wildfires, heatwaves and cold waves. Coupled with mounting pressure to measure, report and adapt to climate risks, immediate action from global leaders has become more urgent than ever. At today’s level of investment in climate action, the world will remain on its current trajectory of around 3°C warming and could incur losses of 16% to 22% in cumulative GDP by 2100.1 Investing in mitigation remains essential. By investing an additional and relatively small portion of GDP – less than 1% – into climate adaptation measures, it is estimated that economic losses of up to 4% of GDP could be avoided in the same timeframe. To make this investment a reality, leaders in the public and private sectors must collaborate to safeguard businesses, communities and ecosystems from growing economic and environmental impacts. Building climate resilience across value chains will unlock greater value for all Companies must recognize that not only are they individually vulnerable, but their exposure also depends on upstream suppliers and downstream clients. Collaboration is vital because if one part of the value chain fails, such as a key supplier being disrupted by climate impacts, it is likely to have system-wide repercussions. Building resilience across value chains requires significant investment, but when companies and their suppliers adapt together, the cumulative benefit multiplies, reducing costs for all. Technology and data are accelerating adaptation and enabling collaboration There are still significant barriers to developing adaptation approaches at scale. For example, the value of adaptation must be demonstrated to secure investment, there is a lack of common language and metrics for cross-stakeholder collaboration, and there is limited access to data, technology and internal capabilities to deploy solutions. Frontier technologies, including artificial intelligence (AI), are pivotal in overcoming those challenges. They allow organizations to identify and anticipate impacts, respond swiftly and build long- term resilience across value chains. Technology also enhances collective investment in adaptation by enabling standardized communication, risk measurement and data sharing – key to informed decision-making. Leaders’ investment in collaboration platforms will realize collective benefits of adaptation Value chains should collectively address adaptation by developing collaboration platforms, where technology-driven ecosystems enable stakeholders to work together to scale-up adaptation efforts, drive innovation and build resilience against future climate risks. Participants in these platforms should be able to share data, technologies and capabilities to develop and deploy adaptation solutions across the entire value chain. When establishing collaboration platforms, global leaders: –Engage in climate adaptation by creating or joining forums within their value chains. –Define the value at stake to create a shared purpose for adaptation. –Standardize adaptation through common language and metrics. –Align on secure data-sharing protocols. –Invest in innovation and infrastructure to host open technologies. –Involve local communities and stakeholders to scale-up adaptation solutions. The time to act is now – those who lead on adaptation will shape the resilient economies of tomorrow.Climate impacts are escalating rapidly, but technology is paving the way to adaptation. Climate Adaptation: Unlocking Value Chains with the Power of Technology 4