Europe Calculates Adaptation Shortfall, Climate Slips Down Global Risk Agenda, Supply Chain Tech Company Closes $20mn Raise, and More

This year is already shaping up to be one of hard questions and unpleasant answers. “Do the productivity benefits of AI justify the colossal investments the technology has attracted?” is one. “Is Europe willing to oppose America in defense of Greenland?” another.

There’s one for the adaptation community, too — and it's fundamental to investors. The question is: “Where will most adaptation dollars be spent: on ‘eyes in the sky’ or ‘boots on the ground’?”

In my recent conversations with adaptation consultants and tech entrepreneurs, this question is clearly top of mind. The optimistic narrative put out by adaptation tech boosters is that better, faster, cheaper tools for identifying and monitoring climate risks (the ‘eyes in the sky’) are nearing their ‘hockey stick’ moment — poised to disrupt plodding legacy solutions and rake in cash. In this new world, those tipped to win include Earth Observation start-ups that are able to beam fine-grained climate impact data to clients, and climate intelligence companies offering models, forward-looking projections, and risk metrics to public and private asset managers alike.

Part of the bull case for the ‘eyes in the sky’ faction is that these tech tools help target spending where it matters most — making costly on-the-ground fixes more efficient. Say you know which access roads to your distribution warehouse are most prone to flooding. You can send construction crews to just those pinch points, instead of spending a wad on flood-proofing the entire network.

In this vision of the adaptation market, data solutions form the base of the pyramid, analytics and consulting sit in the middle, and ‘boots on the ground’ solutions at the apex. To investors, the bottom two layers look juiciest from a returns perspective, as tech margins are high — since you don’t need to hire five more geospatial data scientists to service five new clients, and you can bill them reliable subscription fees. The top of the pyramid is the least attractive for the opposite reason: physical solutions require lots of (expensive) labor and come with lumpy, project-based revenues.

But, but, but — this model has flaws. For starters, it presupposes that customers want to understand their climate risks and do something about them. This is, as it turns out, not a given. I was downhearted, if not surprised, to learn from a contact that a local government declined a climate risk assessment simply because they didn’t want to know. Why? Because knowing would mean they’d have to act — and that would cost money they’d rather not spend. I can’t help but wonder whether this dynamic also applies inside corporates and financial institutions with tight capital budgets.

And then, among those customers that do want to know their climate risks, there’s an assumption that they want precision over completeness. Let’s go back to our distribution warehouse example. Sure, a climate intelligence company may tell you one access road has a 90% chance of flooding and another just 5%. But if you’re allocating budget to flood mitigation, why wouldn’t you spend on trying to make both roads flood-risk free? No adaptation is foolproof. If a biblical rainstorm hits and both roads flood — overwhelming the measures on the high-risk route — you’ll face uncomfortable questions about why the low-risk road was left exposed, especially when the same protective steps could have made a difference.

This perspective flips the pyramid model described above, suggesting shallower demand for climate risk data and analytics than investors may expect. For some customers seeking comprehensive adaptation, broad-brush risk assessments — from public or open-source tools — might be sufficient. For others, they may skip right ahead to the engineering and construction firms able to put boots on the ground. Still others may not want risk assessments at all.

And if this model proves correct, it may force a class of adaptation investors to update their priors.

Louie Woodall
Editor, Climate Proof

✈️ See you in Canada? I’m attending the North51 conference in Alberta this week — please reach out if you’re participating and want to learn more about the intersection of Earth Observation and climate adaptation.

Europe faces a massive investment shortfall in preparing its agriculture, energy, and transport sectors for intensifying climate impacts, according to a new briefing by the European Environment Agency (EEA).

Annual adaptation needs for these three sectors could reach €53-137bn (US$62-160bn) by 2050, rising to €59-173bn (US$69-201bn) by 2100 depending on global emissions trajectories. Yet current funding lags far behind, hovering at just €15-16bn (US$17-19bn) per year — less than a third of the minimum required.

The EEA argues that the economic case for scaling up adaptation is strong, and could shore up the EU’s competitiveness. Climate-related damages in the bloc have already cost an average €40-50bn (US$47-58bn) annually in recent years, chipping away at countries’ economic growth.

Early adaptation investments have potential to avoid future losses and contribute to decarbonization efforts, delivering what the agency calls a “double dividend.” Measures that offer such a dividend include nature-based solutions, resilient infrastructure, and energy-efficient buildings.

Sector-specific needs highlight vulnerabilities. The energy sector alone could require up to €127bn (US$148bn) annually by 2100 under a high emissions scenario, while agriculture faces particularly acute regional risks, especially in southern Europe. Despite relatively higher adaptation funding for agriculture compared to transport and energy, the sector remains underprepared, according to the European Climate Risk Assessment. Private finance remains negligible, underscoring the need for stronger public-private partnerships and innovative financial instruments to close the gap.

Insured losses from natural disasters topped US$100bn in 2025, according to Munich Re, driven by a series of wildfires, floods, and severe storms. The German reinsurer said the single costliest event last year was the Los Angeles fires, which caused US$53bn of total losses, of which US$40bn were insured. Overall global losses hit US$224bn, below the 10-year average, of which US$108bn were insured. Last month, competitor Swiss Re put the global insured loss toll from natural catastrophes at US$107bn, claiming this was the sixth consecutive year in which insured losses topped US$100bn. (Munich Re)

Europe’s first dedicated facility for adaptation finance innovation is now open for business. The Adaptation Finance Innovation Lab (AFIL), launched under the Pathways2Resilience (P2R) project, is seeking proposals for novel financial instruments or business models that can unlock funding for climate adaptation. Six concepts will be shortlisted from the open call, with the Lab offering 13 months of tailored incubation support to enhance their bankability and investment-readiness. Proposals must target urgent regional risks flagged by the European Climate Risk Assessment and be piloted in one of P2R’s participating regions. The call is open to both public and private actors until April 10. (Pathways2Resilience)

The Insurance Council of Australia (ICA) has branded the Victoria bushfires an Insurance Catastrophe, triggering a full-scale industry response to prioritize affected policyholders and mobilize disaster response specialists. The fires, which have raged across the state since January 7, have led to over 2,300 insurance claims being lodged across 18 local government areas. Roughly 30% of property claims are total losses, and the ICA predicts commercial impacts are likely to climb as evacuated residents return to their homes and vehicles over time. (Insurance Council of Australia)

Natural catastrophes and and climate change were named the fifth- and sixth-ranked global business risks in Allianz’s 2026 Risk Barometer. The annual survey of risk management experts from almost 100 countries found that climate-linked disruptions —and policies for addressing them — are on the rise and adding to companies’ financial and operational vulnerabilities. Respondents said that business interruption is their biggest climate-related concern, followed by extreme weather damage to assets and the impacts of slower moving chronic changes to the atmosphere and environment. (Allianz)

PureTerra Ventures has launched a second investment fund focused on water technology, with €10mn (US$12mn) in public capital from Invest-NL. The fund, which is targeting €150mn (US$175mn) in total, will invest in early-stage companies developing technologies to improve water efficiency, reuse, and quality. PureTerra’s first fund raised €73mn (US$85mn) and supported 14 companies working on industrial water treatment and resource recovery. (PureTerra Ventures)

Global climate and environmental threats are slipping in the face of geopolitical and economic upheaval, according to the World Economic Forum’s Global Risks Report 2026.

While climate-related threats remain the most severe over the long term, they have been deprioritized in the short term as governments turn inward and amp up strategic competition. Only 8% of experts surveyed cited extreme weather events as a top risk likely to trigger a global crisis in 2026 — down from 14% last year — with geoeconomic confrontation and state-based armed conflict now dominating the risk agenda.

Other environmental risks, like biodiversity loss, ecosystem collapse, and critical Earth system shifts, all declined in perceived severity for the two-year horizon. However, at the 2036 horizon half of the ten most severe risks are environmental, led by extreme weather and biodiversity loss.

The report warns that climate action is in danger of being caught in “societal, political, and economic crosswinds” exacerbated by societal polarization. This makes cross-border climate risk management and adaptive action significantly harder.

Still, the data leaves room for hope. Among the under-30 demographic, environmental risks rank especially high, signaling the potential for future leadership to reassert climate adaptation as a priority.

The US Senate passed “minibus” legislation approving billions for climate and weather operations at the National Oceanic and Atmospheric Administration (NOAA), the National Science Foundation, and NASA, defying White House plans to gut the agencies. The Senate passed the minibus bill 82-15, following a 397-28 House vote last week, restoring NOAA’s satellite and weather service budgets and reversing staffing cuts to the National Weather Service. The bill now awaits President Trump’s signature. (NBC)

The US House of Representatives passed legislation Thursday that would bar retirement plan managers from considering environmental, social, and governance (ESG) factors in their investment decision-making processes. The Republican-led “Protecting Prudent Investment of Retirement Savings Act” passed 213-205, with three Democratic votes. Backers, including Representative Rick Allen, say the bill protects savers from “risky ESG funds,” while critics warn it could limit tools for managing long-term risks like climate change. The bill now heads to a divided Senate already weighing similar legislation. (Politico)

The UK government is falling behind on its legally binding nature and environmental targets, the Office for Environmental Protection warns in its latest annual report. Despite modest improvements in clean air and climate mitigation, progress across most environmental goals remains “too slow” and “largely off track.” On climate adaptation specifically, the report highlighted concerns over “generally poor adaptation planning across government’s nature programmes” and the “lack of a coherent strategy for adapting the agricultural sector.” On the flipside, it said there had been “positive progress” on the delivery of habitat restoration and protection, which is supporting resilience. (Office for Environmental Protection) 

Canada’s federal government and the Federation of Canadian Municipalities are injecting CAD$7.1mn (US$5.1mn) into 80 climate adaptation projects across the country, aiming to help municipalities assess climate risks and protect critical infrastructure. The projects span all parts of the country and focus on asset management and resilience-building. The funding comes via the Green Municipal Fund’s Local Leadership for Climate Adaptation initiative. (Federation of Canadian Municipalities)

The World Meteorological Organization and the International Water Management Institute have inked a long-term partnership to boost climate-resilient water management, early warning systems, and disaster risk reduction. The deal will see the two organizations promote the integration of climate and water data for anticipatory action, deploy AI and emerging tech, and embed socio-economic insights into climate services. (World Meteorological Organization)

US-based supply chain visibility technology company Tive has secured US$20mn in funding, led by climate resilience-focused investor The Lightsmith Group. 

Tive’s real-time tracking tech monitors the location and condition of in-transit goods, including variables like temperature, humidity, and shock, providing companies with early warning of disruptions tied to extreme weather and other events. With new funding, Tive plans to expand its AI-powered analytics and workflow tools to further embed resilience into logistics operations. Existing investors Sageview Capital, World Innovation Lab, AVP, and Supply Chain Ventures joined the funding round.

The company has over 3.5 million trackers deployed across 190 countries, concentrated among customers that ship temperature- and time-sensitive goods around the world. Its software platform, fed with information from these trackers, offers shippers ground-truth data needed to reduce spoilage, reroute shipments, and ensure business continuity when regular operations are disturbed.

The deal is the latest strategic investment by The Lightsmith Group, which targets growth companies supporting climate resilience. Other investments made by the firm include last year’s raise for Parsyl, a specialist insurer for food, beverage and pharmaceutical commodities in the marine cargo space.

Satellite analytics company Hydrosat has raised US$60mn in Series B funding to expand the reach of its climate-smart water and crop management tools. Hydrosat enables real-time monitoring of irrigation, vegetation stress, and drought risk — capabilities increasingly viewed as critical infrastructure for governments, insurers, and agribusinesses adapting to intensifying climate pressures. Hartree Partners led the financing, with participation from Truffle Capital, Space 4 Earth, and a number of repeat backers. (Hydrosat)

Nature intelligence firm Natcap has launched a data-driven platform to help companies map and manage nature-related risks across their value chains. The software brings together high-resolution geospatial data and financial analytics so that users can quantify these risks at the sub-regional level. Outputs from the tool support corporate reporting against voluntary and mandatory disclosure standards, like those introduced by the Taskforce on Nature-related Financial Disclosures. (Natcap)

OroraTech and Kepler Communications have launched the world’s first real-time thermal livestream of Earth, a breakthrough that could transform wildfire detection and environmental monitoring. The Munich-based thermal intelligence firm deployed four of its SAFIRE Gen4 thermal sensors on Kepler’s next-gen satellites via SpaceX, enabling persistent infrared data relayed through Kepler’s high-speed optical network. The on-orbit processing slashes data delays to minutes, offering near-instantaneous wildfire alerts globally. (OroraTech)

Canadian financial institution Manulife has launched a global forest restoration program using monitoring technology from Canadian startup veritree, marking the first deployment of the system in Asia. The initiative, called Manulife Impact Forests, includes reforestation sites in Canada, the US, Cambodia, Japan, and the Philippines. Veritree’s Smart Forest platform combines satellite imagery, on-the-ground data, and bioacoustic monitoring to track tree growth and site health. So far, more than 185,000 trees have been planted across 160 hectares, including areas damaged by wildfires in British Columbia’s Nicola Watershed. (Manulife)

Copernicus: 2025 was the third hottest year on record (Copernicus Climate Change Service)

The disaster management complex: Law’s adaptations in times of climate disaster (Sabin Center for Climate Change Law)

Unlocking the benefits of transparent and reusable science for climate risk management (Proceedings of the National Academy of Sciences)

Using a dedicated adaptation financing process to close subnational adaptation finance gaps in Europe (Ecological Economics)

Parasol Lost: Global risk management for human prosperity (Institute and Faculty of Actuaries)

Accounting for ocean impacts nearly doubles the social cost of carbon (Nature Climate Change)

Profit from preparation: Innovations and opportunities in disaster risk financing in developing countries (Center for Strategic & International Studies)

Thanks for reading!

Louie Woodall
Editor