Climate resilience needs a better business case
Darren Clifford, founder and managing partner of Adapt[us] Capital talks about the need for storytelling around climate adaptation and resilience
For years, climate investing has centered on mitigation — technologies designed to cut emissions and address the root causes of climate change. But as climate shocks become more visible, and as geopolitical instability reshapes how investors think about risk, adaptation and resilience are moving to the center of the conversation.
Darren Clifford, the founder and managing director of Adapt[us] Capital invests at the intersection of these issues.
Clifford spoke with The Cooler to share his views on how resilience is not just a climate story. It is, increasingly, a commercialization story — and simply a better way to understand where long-term value will be created.
From mitigation to adaptation
Q: There’s been a noticeable shift toward resilience and adaptation. How real is it?
A: It’s real, but it’s not a clean break. A lot of this still comes back to the impact-investing lens. Historically, impact has focused more on mitigation because that’s framed as solving the problem. Now people are starting to come around to the idea that maybe it’s also good for society if we become a little more resilient.
Q: Do you think the market still undervalues adaptation?
A: I do. I still think there’s some shortsightedness there, because people aren’t fully thinking through the opportunities adaptation presents. Most societies have a lot of inertia. We get used to doing things a certain way, and we just keep going. But climate change is going to force people to do things differently. Once people are forced to change, the question is: what do they change to? That’s the bigger opportunity. You can put something positive in front of them — something that’s better for the individual, but also better for society as a whole.
Resilience as strategy
Q: What does resilience look like when you move from impact language to business language?
A: In a lot of cases, adaptation has already been happening — we just haven’t called it resilience. We’ve called it supply chain optimization. For years, companies have been asking what they need to do to make supply chains more robust. In times of peace and stability, a fully integrated supply chain and cost minimization tend to win. But in times of instability — whether from weather, geopolitics, or something else — resilience starts to win.
Q: What do companies still get wrong about that tradeoff?
A: The big mistake is treating cost minimization as the end goal. Cost minimization is not profit maximization. You have to look at both cost and value creation. That’s why this becomes a strategy question. There isn’t one perfect answer for every company. The question is whether the kind of resilience you’re building is actually consistent with the rest of your strategy.
On premiums, markets, and what lasts
Q: Is the market now willing to pay for resilience in a way it wasn’t willing to pay for “green”?
A: More willing, yes. But I’d be careful. There’s no green premium at scale. So is a resilience premium more attractive? Yes — but that’s not saying much. The resilience premium is highly valued because of the environment we’re in today: supply chain disruptions, geopolitics, and broader instability. The challenge as an investor is that I can’t invest based on what’s popular today. I need to invest based on what’s going to matter five to ten years from now, when I’m trying to grow and exit these businesses.
Q: How do you distinguish climate risk from geopolitical risk in that framework?
A: Climate risk is systematic. It’s predictable. You know it’s coming, and you can adjust for it in your models. The best analogy is demographics twenty years ago — you could look forward and position around it. Geopolitical risk is different. It’s idiosyncratic. It depends on who’s in government, whether conflict escalates, whether conditions stabilize. That’s much harder to underwrite. So yes, both can increase the value of resilience, but one is a lot easier to build a long-term investment thesis around than the other.
Centralization, distribution, and the cost question
Q: A lot of resilience technologies depend on more distributed systems. Does that model work economically?
A: It can, but the answer isn’t just capex. People often focus on the fact that you pay the upfront cost once, and that capex can come down as you scale. That’s true. But what also matters is the opex. If a big centralized production system still has a lower ongoing cost than a distributed one, then in stable periods the centralized model is going to be hard to beat. If you can get the operating costs to a competitive place, then the resilience argument gets a lot stronger.
Why resilience is hard to sell
Q: Why is resilience still such a hard consumer pitch?
A: Because there’s a huge disconnect between people’s perception of risk and the actual risk they face. Somebody sees a flood hit the next town over last year and thinks, “I’m fine. That was the one-in-ten-year flood. I’ve got time.” But that gap between perceived risk and actual risk is a huge challenge for companies trying to sell resilience. They’re basically going to market saying, “Help me help you,” and a lot of consumers don’t think they need the help.
Q: So what kind of pitch does work?
A: The companies need better value propositions. This is the part that is in their control. The question is simple: how is your product better, faster, cheaper? If resilience is the only thing you’re selling, that’s hard. But if there’s something there that people already want, then resilience becomes a very strong second leg of the story.
Performance first, resilience second
Q: What’s an example of that in practice?
A: Cooling is a good one. People want air conditioning because they want to be cooler. If you have a system that uses a fraction of the electricity of a traditional unit, that’s already compelling. Then the resilience story comes in behind it: it doesn’t take much backup energy to keep running, so after a hurricane or outage you still have cooling. That matters, especially when you look at what happens after an event, when the AC is down and there are real health consequences. But it works because the product is already better on its own terms.
Q: What’s the biggest commercialization barrier?
A: Consumers still think in capex more than opex. They look at the upfront purchase and not always at the operating savings over time. That makes “loss avoidance” a hard business case to communicate. A lot of these companies are probably going to have to follow the Tesla path: start with a smaller segmented market that values premium features, get a foothold, and then work toward broader adoption over time.
The advantage of long-term ownership
Q: Who do you think is best positioned to win in a resilience economy?
A: Long-term owners. The people best positioned may be the ones who think across the life of the asset — families, generational owners, anyone making decisions with a longer horizon. If you’re just optimizing for quarterly profit, you may look efficient in the short term, but I think those are the players that are going to struggle more over time. In a resilience world, the people making long-term decisions are going to be better off.
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