Climate Adaptation Unlocking Value Chains with the Power of Technology 2025

Introduction Current climate mitigation and adaptation efforts are clearly insufficient to prevent historic temperature increases and catastrophic impacts. However, while businesses and organizations may have been slow to act, frontier technologies can help them adapt. At today’s investment levels, the world is on track for a 2.6-3.1°C rise in temperature over the pre- industrial average by 2100,2 wreaking enormous damage to the global economy, natural ecosystems and human life. Emissions growth may have slowed over the past decade, but it has not fallen. To prevent the 2015 Paris Agreement’s goals from being shattered – and to ensure that Earth system’s tipping points are not breached – emissions must decrease by 5.5% annually from 2024 to keep warming below 2.0°C by 2030 and by 9.0% annually to stay below 1.5°C. As a comparison, global greenhouse gas (GHG) emissions fell by 4.7% from 2019 to 2020 during the COVID-19 pandemic, before bouncing back to even higher levels.3Weather is becoming more extreme Speeding up the pace of climate adaptation is critical. The past decade has featured the 10 warmest years on record,4 with 2024 entering the record books as the first calendar year to exceed 1.5°C above pre-industrial levels. That makes last year the hottest since records began in 1850 – until this year, that is.5 The physical impacts of climate change are becoming increasingly evident and persistent,6 pushing adaptation to centre stage. The World Economic Forum’s Global Risks Report 2024 listed extreme weather as the most likely global risk to trigger a major crisis in the next decade.7 Slow- onset events such as droughts and sea-level rise are worsening, while extreme weather events – wildfires, heatwaves, cold waves and floods – are occurring at unprecedented rates (see Figure 1). If current trends persist, the United Nations (UN) In the race against climate change, organizations must shift to a value chain perspective to address adaptation. 9% the amount emissions must decrease annually from 2024 to stay below 1.5°C. 4.7% the amount emissions fell from 2019-20 during the COVID-19 pandemic. United Nations Environment Programme 2024 saw an unprecedented number of climate-related disasters FIGURE 1 Note: Climate-related disasters include heatwaves, wildfires, droughts, extreme weather events, floods and landslides. Source: Boston Consulting Group (BCG) analysis.Not exhaust ive North American heat wave and w ildfires, S umme r 2024 Hurricanes B eryl, July 2024, and F rancine, S eptember 2024Europe fl oods, Januar y 2024; Storm Boris, September 2024 Floods i n Pakistan, March 2024 Eastern Europe heatwave, Jul y 2024Heatwave in Mecca, June 2024UAE fl oods, April 2024Southeast Asia heat wave, Spring 2024Wildfires in Siberia, June 2024Wildfires in Canada, July 2024Wildfires in Portugal , September 2024 Yagi typhoon and fl oods in Southeast Asia, September 2024 Hurricanes H elene, S eptember 2024, and M ilton, O ctober 2024 Brazil floods, Sp ring 2024Kenya fl oods, April 2024Wildfires in the Amazon, Summe r 2024Sahel, Namibia drought s, 2024Floods i n Spain, October 2024 Chido cyclone in Mayotte, December 2024 Climate Adaptation: Unlocking Value Chains with the Power of Technology 5