Whether you believe the cause is man-made, due to sun spots, or just random noise, there’s no escaping that the planet’s temperature has risen.
(Well, OK, unless warming stopped in 2000, which some scientists and investors believe).
With that warming comes all sorts of consequences, including rising sea levels, erratic weather, changing coastlines and other changes.
While it’s a pretty grim picture for an environmentalist, it’s also a business opportunity.
Oxfam released a report saying it is critical that we invest in businesses that are working on “climate change preparedness”. They call it the “adaptation marketplace,” which is built on smart policy-making that looks ahead at the impacts of climate change.
Specifically, Oxfam says there are seven sectors that will profit from climate change. They also highlight a few of the industry leaders in the space.
As droughts ensue, and water supplies dwindle, technologies that help us use water efficiently will be in greater need.
Pentair Inc. (PNR) is a leader in the field selling water pumps and filtration systems. The company had $3 billion in sales last year.
Siemens Water Technologies employes 5,700 people worldwide. It is a leader in water recycling as well as emergency water supply and conventional water treatment.
Regardless of how hot it gets, the burgeoning global population needs to be fed. Companies that look to improve agricultural techniques in an increasingly water-challenged future are ahead of the curve:
AgraQuest Inc. Maker of renewable, biologically based pest and disease control products. It expects the market for products like what it makes to grow from $1 billion this year to $5 billion--$10 billion worldwide by 2017.
CH2M HILL: A fortune 500 company with construction on every continent but Antarctica, this company is a specialist in big sustainble projects. It's worked on the Panama Canal, the zero carbon city in Abu Dhabi and the 2012 London Olympics, amongst other projects.
The most obvious solution to climate change is using more renewable, clean energy sources like wind and solar.
General Electric (GE): Oddly, Oxfam only highlights GE. While GE is huge in alternative energ--number two in turbines, increasing solar, controlling government policy--we think there's room for other companies like First Solar (FSLR) or SunPower (SPWRA). Maybe it's because GE is the only full service organisation out there.
Extreme weather events are more likely with warmer temperatures. Companies that help prepare for hurricanes, cyclones and other events can help save lives and property.
WeatherPredictConsulting Inc. is developing a technology it calls AeroEdge which is an 'aerodynamic retrofit technique designed to protect roofs.' When a hurricane hits, the damage to the roof is the most costly.
With bad weather destroying property, the insurance industry will find itself paying out for weather-related damage in the coming years. That's good news for risk analysts, planners, project managers and financial service providers who will find their skills in demand.
Swiss Re is already seizing climate change-related market opportunities. Says Oxfam, 'Swiss Re is developing specific insurance products to help clients mitigate and transfer climate risk, such as weather risk insurance and catastrophe bonds, securities that provide coverage for natural catastrophe-related risks. Investors who buy these bonds receive a fixed rate of interest but lose all or part of the principal if a specified event, such as a hurricane, occurs.'
Ah, consultants. They can be a punchline, but their expertise in planning, analysis and modelling are invaluable for calculating the best alternative energy plans.
ICF International Inc. has been working on this for over a decade. It helps governments and corporations adapt to climate change. We'd add in McKinsey, who are big consultants doing good work in alternative energy.
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