J.P. Morgan Asset Management: Climate adaptation

Jennifer Wu, Scarlet O’Shea and Brian Kennedy

In brief:

  • Nature is vital to our economy and society, both in terms of the natural resources that underpin economic productivity, and the regulating role of ecosystem services in mitigating and helping us adapt to climate change.
  • Yet nature faces a multitude of threats, with climate change itself being one of the most important. These threats are compromising nature’s ability to sustain the natural capital and ecosystem services on which our economy relies, putting investments at risk as a result.
  • Helping nature adapt to these threats is therefore crucial. We look at investable climate adaptation solutions across natural resource-dependent industries, focusing on agriculture, food and beverages, forestry, pharmaceuticals and tourism, as well as exploring solutions that can help nature adapt in the face of rising global temperatures.

The foundational role of nature in sustaining the global economy is gaining increasing recognition, as are the systemic challenges posed by climate change. However, there is still insufficient discussion of the measures that must be taken to facilitate the adaptation of natural systems, and the industries that depend on them, to climate change.

Investors need to understand the scale and scope of nature’s economic contribution, the wide-ranging nature dependencies of key industries, and the various ways in which nature-related adaptation can be effective. They should also be aware of the significant nature financing gap, particularly in relation to adaptation, and the emerging mechanisms for overcoming barriers to investment in nature adaptation.

The increasing extent of solutions to help preserve the adaptive capacity of natural capital and ecosystem services means investors can direct capital to benefit from opportunities across sectors and regions, while helping to enable essential adaptation for and by nature in the process. 

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