The software of climate adaptation

Getting to the building blocks of sustainable capital allocation

Rendering of sustainable cities by an imaginative artist. Courtesy pexels.

Climate change manifests in our lives in two major ways. Firstly, we are seeing an accelerated increase in the environmental impacts and economic losses from physical climate risk. Secondly, we are observing the growing awareness of a climate emergency at the scientific (IPCC AR6) and geopolitical stage (COP26), likely to lead to new regulatory policy.

Climate risk is now financial risk. Extreme climate events and pressure from shareholders & regulators are driving financial institutions to assess climate risk and monitor emissions.

Cumulative sum of fire detections across the US Pacific northwest (CA, OR, WA) from Oct 2020. Source: NASA Terra and Aqua satellite data based on detections with greater than 95% confidence levels.

We live at a pivotal point in history. Over the past decades, we have seen many domains, such as web, mobile and payments, disrupted and redefined by software. Now, more than ever, we are ready for a software-driven, machine learning-powered approach towards climate adaptation. Here are the reasons why I feel the coming decade is one where we will see the emergence of software for climate adaptation:

• Data abundance: Climate data is inherently geospatial. By that, I mean there is spatial variability — different regions are affected differently by…