Frontier markets are particularly vulnerable to the impacts of climate change — extreme weather events, reduction in land for agricultural activities, reduced availability of water, and market shocks are increasing the risk of food insecurity, conflict, and displacement. It’s been estimated that by 2030, climate change could push a further 100 million people into poverty, with developing countries bearing an estimated 75–80% of its costs.
Startups and venture capital have a key role to play in increasing climate resilience. Innovation and high-impact entrepreneurs are developing scalable solutions to help communities adapt to climate change — solutions that will support people through financial shocks, like insurance and technology-enabled financial tools; solutions that can enhance their livelihoods, like climate-smart agriculture technologies; and solutions that can increase the resilience of their communities, like secure property rights and sustainable supply chains.
The U.N. Secretary-General, António Guterres, has called for 50% of the total share of climate finance to be spent on climate adaptation. This mandate will require us to leverage all the tools in our toolbox. Entrepreneurs will have to test a variety of business models, funds will have to be open to different return horizons, and funders will have to unlock a variety of catalytic capital structures. We’re seeing the market for climate adaptation solutions growing and have intensified our focus on climate resilience.
We are building a constellation of investments across three themes of financial resilience, adaptive agriculture and livelihoods, and climate-smart communities, that collectively give individuals and communities the agency to adapt and thrive in the face of climate change.
Confronting climate change is the most pressing issue of our time, and action on climate adaptation now will drive climate resilience in the future. The founders of transformative solutions in emerging markets are building toward this future, and we are here as investors and partners to accelerate their growth.