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This transcript has been lightly edited for length and clarity.

An 80-page report on climate risk won’t stop a flood. Companies spend $100-200,000 on the analysis, and almost none of the budget survives for anything to get built. A senior leader I spoke with this year told me about the day she carried out one of these reports to the board. Eighty pages, beautifully designed, one of the big names, and she asked the only question that matters, which is: “What's the plan?”

And the room said: “Are we all right for the next ten years?” [and the answer given was] “Probably, in most locations.” That was the end of the conversation. Meanwhile, her company had factories sitting on the riverbanks of Southeast Asia. The waters came, and then protecting them was an enormous engineering job. In her words to me: “Why didn't we do anything about this years ago?”

That’s why my company exists. Climate modeling companies took what they built for essentially financial services and insurance companies and brought it to organisations which own factories, hospital infrastructure, etc, but missed out on what’s required for action. So same story, different ending.

A long-term customer of ours had thousands of sites, and a handful of them had serious flood exposure. Instead of just a report, they got risk quantified financially, [so they could see] what they're going to lose and what protecting them costs.

They decided to invest into deployable flood defenses. But a barrier isn't a defense — it's a promise. Someone has to go and physically put it up, and the official flood warning systems were reaching them too late.

So we put sensors upstream and used that data to provide them with 24 hours early warning. Same river, same rainfall, completely different warning, and they were able to save costs on damages, insurance, and were able to be resilient for the community that they serve. So the climate change is inevitable, but the damage doesn't have to be.

Everything we actually care about runs through physical spaces. The food on the shelf, hospitals we rely on, the schools our children go to, energy security through the grid, food security through supply chain. All those places were built for a climate that no longer exists.

They’re not failing because they’ve been built badly. They’re failing because the world underneath has moved. And every year, the gap between what they were designed for and what they now face gets wider. And that actually changes over time. So it isn’t just more storms, it’s that the cost of doing something about it keeps going up, and the options are narrowing, and drainage schemes become more of a relocation [issue].

[But] we've left it largely to somebody else: to the government, to local authorities, to the regulator, or to the next administration or insurance companies. Most of what needs protecting, though, isn’t always owned by government. It’s owned by companies. It’s owned by us — the places we live in. And it’s the factories, it’s the depots, the care homes, the supermarkets — the places we work.

We can do something about, it rather than leaving it for someone else. So climate adaptation isn’t easy, but it’s a solvable problem, and if we can act early on it, it will pay for itself.

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Honestly, because I got it wrong first!

For the first two years of SmartResilience, I built it to partner with insurers, which as an industry was hard to motivate. This was back in 2019-20. It nearly finished us.

What it taught me is something this market hasn’t quite learned yet — which is adaptation isn’t sold to people who price risk, it’s sold to people who carry the risk. Those are two very different businesses, two very different use cases. I’ve now understood that and have built a company with a completely different product.

The other reason is I’m an engineer by training, and I’ve been fortunate enough to be supported by the UK government, receiving an enterprise fellowship with The Royal Academy of Engineering and the 1851 Royal Commission. Engineering is a discipline of consequences. We can create a scenario model, a probabilistic model, but you also have to do something that people can act on.

I’ve believed in coming up with and partnering with engineers to provide physical solutions on the ground. That’s not a tick box exercise. That means in practice that we’ve built this with operators in mind, and something that everyone — from your site managers, your facilities managers, to people on the ground — can use, rather than it just being a compliance and a finance function.

We offer a software-as-a-service solution that’s here to help drive operational resilience — with reporting as a byproduct. Climate adaptation is a long-term problem, and you’ve got different teams, and people, and skill sets that need to come in to solve this challenge.

Imagine you’re a global manufacturing company, or a healthcare company, and your strategy team is based in New York. You’ve decided you want to build a business case for climate resilience because you can see the increasing regulations and questions from investors. The first part is understanding your risk exposure, financially, for all your operations, and potentially your supply chain. Once your team agrees on the total risk and your priority, the second part — and this is where most organisations stall — is to actually work with the property teams, whether they’re in Africa, Europe, or, Asia, [and] survey partners — to send back recommendations on adaptation measures, with specifications so that we can then apply that back into the vulnerability models and have the return of investment [logged].

All of these things take time. Our unique selling point is really around embedding early warning systems based on sensor data. This is something that we could deploy in four to six weeks, so that you can have your emergency response against a natural disaster, so that you can protect your, people, staff, and customers whilst you're working towards a long-term adaptation plan. That’s how we’ve been working on driving operational resilience into our customers’ operations.

Our customers are asset-heavy organisations, either in critical infrastructure or near critical infrastructure. For example, large, enterprises in food, healthcare, manufacturing, energy.

A common thread between all of them is that business interruption isn’t acceptable to them. Typically, customers who worked with us have saved — on average — $1-3mn in prevented, uninsured damage costs and 1-3% on insurance premium where they’ve gone through the full process end-to-end with us. So climate resilience doesn’t need to be a cost of compliance. It can actually be a saving against uninsured damages, long-term asset value protection, business interruption, and insurance savings.

Take an example like a hospital. If it floods, it’s not just a revenue problem. Staff can’t get in, patients can’t be discharged, and there is nowhere else for these people to go. So companies spend a lot of time making sure that their key sites are protected. Or take a distribution center for food. You’re not just losing a building — you're actually losing shelf space within the supermarket. That converts into a budget. And typically, organisations already have money committed towards resilience capex, maintenance programs, site investment programs. So we help them drive some of that towards resilience and adaptation.

The market’s still in its infancy, and has been mainly taken over by regulations and compliance — but it’s maturing into integration and operational resilience.

When you think of climate risk management, a lot of the market is currently discussing financial modelling and average annualised loss or losses over other return periods — 2050, or even 2100.

But actually extreme weather events are happening now. We like to present ourselves as a fire alarm — but for extreme weather and climate. That’s something you can have on every site that’s constantly monitoring and looking out for you when you’re not working and actually provide that early warning and intelligence so that you can actually take some form of action before things go wrong.

I’d say our lowest point was probably around 2020-21.

I’d built a business plan using the insurance industry as a distribution channel. On paper, it was obvious. Everyone who I’ve spoken to in consultancies — all the smart people in the world said this makes a lot of sense. I spent a good two years really trying to make that work.

But the problem was not all insurers wanted to reduce the risk. Their main priority was to price it, and hope that as long as nothing happens in the next 12 months — the policy period — they’d be okay. We spent a lot of time, energy, and money into these channels, and it drove us into a bad place.

Then around 2022-23, I decided to pivot into the space where people actually care about these risks. They actually want to do something about it, and most importantly, they own it. That’s when we really started focusing on operators directly, where we could go one by one to who actually cared about this and wanted to make a difference within an organisation. That’s what saved us.

 Within climate adaptation, climate risk itself is a difficult sell, because you’re selling, a form of insurance essentially for something that may or may not happen in the future. And on a sunny day, if you go to someone talking to them about flood risk solutions, they might go: “Actually, it’s not today’s problem, it’s some other day’s problem.”

So I think coming up with a return on investment is difficult. One of the early mistakes I’ve seen founders make — which I did — is to go and find a big player and try to partner with them. What I really learned — quite painfully — is that you have to go and find that one person within one team, within one organisation, who really needs this product, who really needs this solution for the problem they’re facing, rather than trying to conceptually change the organisation to become more resilient.

It’s actually finding that one person in operations or in finance — whoever needs this product — and then expanding from that point.

  A lot of capital is going into big mega infrastructure projects: to build dams, reservoirs, and flood protection for cities. That’s funded by governments, and that’s great — it provides large populations with protection they need.

I’d say where less capital’s flowing is probably on the upstream food supply chain, into agriculture and farming, especially as farmers are finding it more and more difficult to have predictable harvesting seasons and predictable revenue. And a lot of our society is dependent on imported food. That’s an area which I'm quite concerned about and hope more capital flows into.

 One thing I’d really like to find out is: at the moment, adaptation gets taken into account on a case-by-case basis. It comes up at renewal, usually for large corporates, and it’s a slightly different conversation every time, depending on the broker, the underwriter, the site, and also the cycle of the market, if it’s a hard or a soft market.

 What I’d really love to know is whether anyone is working on a standardised format, something potentially every insurer could ingest, so that adaptation could become a normal part of underwriting, instead of a bespoke conversation every year.

If anyone’s working on that, or knows others who are working on it, I’d like to have that conversation with them. 

Is selling adaptation SaaS solutions through insurers a fool’s errand?

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Thanks for reading!

Will Everill & Louie Woodall
Editor, The Adapt | Editor, Climate Proof