Private equity firms are targeting climate analytics as a key investment strategy in the rapidly expanding climate adaptation and resilience (A&R) market, according to a new report by Boston Consulting Group and Singapore investment fund Temasek.
With global adaptation finance needs projected to reach up to $1.3 trillion annually by 2030, investors are eyeing climate intelligence solutions as one of the most promising and scalable commercial opportunities in the field, the report states.
The climate analytics sector—spanning hazard warnings, catastrophe risk modeling, and long-term climate scenario analysis—is expected to grow 15% annually over the next five years. Growth is being driven by regulatory shifts requiring corporations to disclose physical climate risks, alongside a surge in demand for hyperlocal and industry-specific data solutions.
Private equity firms are already capitalizing on this momentum. As the report details, TPG Rise’s $100 million investment in Climavision in 2021 fueled the company’s expansion in AI-powered weather forecasting. Similarly, Union Park Capital has built a roll-up platform with AEM, acquiring multiple environmental data companies including Davis Instruments and Earth Networks. Meanwhile, Centata Growth Partners led a $33 million Series B in ZestyAI, which offers wildfire risk modeling to the insurance and real estate sectors.
Venture investments are also flourishing. Jupiter Intelligence, which provides asset-level insights into physical climate risks such as floods and extreme heat, secured $54 million from investors including CDPQ and Mpower Partners. Moody’s and S&P have acquired firms like Four Twenty Seven and The Climate Service, respectively, signaling a broader strategic shift toward integrating climate risk into traditional financial analysis.
The report highlights how the climate analytics segment breaks down into three core investment categories:
- Hazard Warning Providers – These firms offer short-term weather forecasting for operational decisions in sectors like agriculture and transportation. The segment is relatively mature and cash-flow stable, appealing to traditional buyout strategies.
- Catastrophe Risk Analytics – Serving insurance and reinsurance markets, this segment involves modeling medium-term risks like hurricanes and floods. While mature, innovation in AI and modeling is creating room for growth.
- Climate Change Analytics – A nascent but fast-growing area focused on long-term scenario modeling and financial impact assessment. With 25–30% projected annual growth and EBITDA margins of up to 40%, this segment is a hotbed for early-stage investment.
These developments align with broader market forces. Governments are mandating climate risk disclosures, while industries increasingly seek decision-support tools that translate complex climate data into actionable business strategies. Investors who can identify platforms with proprietary data models or domain-specific insights stand to gain significant upside.
