For policymakers and investors, adaptation must become the foundation of credible climate action, not an afterthought, says Gustave Loriot-Boserup, Founder of Compass Insights.
On 12 December 2015, the Paris Agreement was signed. For the first time, countries came together and vowed to hold the increase in global temperatures to well below 2°C and pursue efforts to maintain temperatures below 1.5°C.
After Paris, there was a real sense of optimism. Science had won. Politicians would finally take action. And society would ultimately benefit.
We assumed that scientific authority, reinforced by the growing visibility of climate impacts would be sufficient to legitimise the climate agenda. Those who weren’t on board were dismissed as climate deniers, as uneducated, or as simply wrong.
Yet climate action does not unfold in models or treaties. It unfolds through households, workers, communities, and voters. It requires consent, cooperation, and endurance over decades. It requires trust in institutions and a willingness to sacrifice for an abstract collective future.
For many, that ask was too great. Their own vulnerabilities felt far more urgent than a distant temperature target. After all, why would someone worried about paying next month’s energy bill care about net zero decarbonisation pathways? Why should they accept a carbon tax on fuel when petrol prices are already rising? Why should they bear the burden of an agenda designed by a political elite that seems indifferent to their struggles?
Shooting the messenger
This is where climate policy in the western world failed. You cannot build lasting political and societal change by telling people that their concerns don’t count. When you do, they retreat into defensiveness, into identity, into blame. They look for someone to hold responsible, and often that means the messengers themselves: the institutions, the experts, the political class demanding change.
The climate movement assumed this disconnect would resolve itself. As climate impacts became more visible, as the fires spread, the floods worsened, the heatwaves intensified, surely people would see the urgency and rally to the cause. The evidence would become undeniable. Resistance would fade. Action would follow.
It did not. Instead, as impacts intensified, politics fractured further. Take the 2003 European heatwave. An estimated 70,000 people died across the continent, many of them elderly and isolated. It was, at the time, one of the deadliest climate-related events in modern European history. If fear and visibility were enough to mobilise societies, this could have been a turning point.
It was not. The heatwave triggered public outrage, but the attention focused overwhelmingly on immediate failures: unprepared public health systems, the lack of air-conditioning units and the protection of vulnerable populations. Nobody was asking whether we should decarbonise faster, but whether governments could be trusted to protect citizens against the risks right in front of us.
Consider any other recent climate impact event — the severe flooding experienced across the UK for example: homes destroyed, businesses lost, infrastructure disrupted, and entire communities left dealing with long-term damage. Yet again, these events were not experienced as evidence of the need for climate action, but as proof that the government could not manage risks already on its doorstep.
In fact, there is no academic evidence in the scientific literature that suggests that catastrophic climate events result in stronger public support for climate mitigation. What can be seen, however, is that disasters tend to punish incumbents for perceived incompetence. That distinction matters. Because legitimacy is precisely what is needed to pursue long-term climate agendas, where benefits are diffuse and costs are felt in the present. When disasters erode confidence in public institutions, they do not create momentum for transformation, they weaken the very foundations on which it depends.
Building societal capital
We don’t have to look very far to see this dynamic play out. Consider Covid-19. The pandemic offered a clear example of how institutional competence in managing threats builds the societal capital needed for collective action. In South Korea for example, the government responded swiftly and competently: widespread testing, contact tracing, clear communication, and effective protection of vulnerable populations. Because people trusted their public health institutions, the response never became deeply politicised. Compliance with collective measures remained high, even when they required personal sacrifice.
The US experience told a different story. Covid-19 was immediately politicised. Low institutional trust meant that mask-wearing, lockdowns, and eventually vaccines weren’t evaluated as public health measures but as political loyalty tests. This in turn undermined the capacity for collective action.
The same principle also holds for climate policy. Japan offers a compelling example of this. For decades, the country has invested heavily in disaster preparedness: early warning systems, resilient infrastructure, community-based disaster response programmes. This demonstrated competence on adaptation has strengthened public trust in its institutions and probably helped to depoliticise climate policy more broadly. Unlike in much of the West, climate mitigation hasn’t fractured into tribal warfare. It is treated as a technical and governance challenge, not a moral identity issue imposed by elites.
If there’s one thing that the last ten years since Paris should teach us, it is that climate policy cannot be sustained without political legitimacy. This is why a stronger focus on adaptation matters: not because it replaces mitigation, but because it builds the precondition mitigation depends on: trust that institutions can manage risk competently and will not demand sacrifice without providing support.
In practice, this means prioritising visible protection: heat-resilient housing, flood defences. These are not speculative interventions. They are the basic functions of a state managing known risk. Their political value lies not in preventing every disaster, but in demonstrating competence when shocks arrive. This in turn, creates the political capital needed to pursue the harder work of mitigation: carbon pricing, and industrial transitions such as the shift from internal combustion engines to electric vehicles. The mistake of the past decade was not an excess of ambition, but a mis-sequencing of it. We tried to transform systems before reassuring societies. We relied on urgency to generate legitimacy, when legitimacy needed to come first.
Lessons for investors
There are lessons here for institutional investors as well. To preserve credibility, responsible investment needs to stay anchored in the financial materiality of the investors and issuers it represents, before it attempts to pursue systemic transition agendas. This is where climate adaptation matters. Not because it means abandoning mitigation targets, but because it is the precondition for successful transition planning.
The most direct climate risks investors and issuers face will result from physical climate impacts that are now locked in and cannot be diversified away. For long-term investors, strengthening their stewardship of vulnerable assets and increasing capital flows towards adaptation finance not only mitigates their exposure to these risks, but also establishes the foundation for systemic transition risk management.
For policymakers and investors, adaptation must become the foundation of credible climate action, not an afterthought, says Gustave Loriot-Boserup, Founder of Compass Insights.
On 12 December 2015, the Paris Agreement was signed. For the first time, countries came together and vowed to hold the increase in global temperatures to well below 2°C and pursue efforts to maintain temperatures below 1.5°C.
After Paris, there was a real sense of optimism. Science had won. Politicians would finally take action. And society would ultimately benefit.
We assumed that scientific authority, reinforced by the growing visibility of climate impacts would be sufficient to legitimise the climate agenda. Those who weren’t on board were dismissed as climate deniers, as uneducated, or as simply wrong.
Yet climate action does not unfold in models or treaties. It unfolds through households, workers, communities, and voters. It requires consent, cooperation, and endurance over decades. It requires trust in institutions and a willingness to sacrifice for an abstract collective future.
For many, that ask was too great. Their own vulnerabilities felt far more urgent than a distant temperature target. After all, why would someone worried about paying next month’s energy bill care about net zero decarbonisation pathways? Why should they accept a carbon tax on fuel when petrol prices are already rising? Why should they bear the burden of an agenda designed by a political elite that seems indifferent to their struggles?
Shooting the messenger
This is where climate policy in the western world failed. You cannot build lasting political and societal change by telling people that their concerns don’t count. When you do, they retreat into defensiveness, into identity, into blame. They look for someone to hold responsible, and often that means the messengers themselves: the institutions, the experts, the political class demanding change.
The climate movement assumed this disconnect would resolve itself. As climate impacts became more visible, as the fires spread, the floods worsened, the heatwaves intensified, surely people would see the urgency and rally to the cause. The evidence would become undeniable. Resistance would fade. Action would follow.
It did not. Instead, as impacts intensified, politics fractured further. Take the 2003 European heatwave. An estimated 70,000 people died across the continent, many of them elderly and isolated. It was, at the time, one of the deadliest climate-related events in modern European history. If fear and visibility were enough to mobilise societies, this could have been a turning point.
It was not. The heatwave triggered public outrage, but the attention focused overwhelmingly on immediate failures: unprepared public health systems, the lack of air-conditioning units and the protection of vulnerable populations. Nobody was asking whether we should decarbonise faster, but whether governments could be trusted to protect citizens against the risks right in front of us.
Consider any other recent climate impact event — the severe flooding experienced across the UK for example: homes destroyed, businesses lost, infrastructure disrupted, and entire communities left dealing with long-term damage. Yet again, these events were not experienced as evidence of the need for climate action, but as proof that the government could not manage risks already on its doorstep.
In fact, there is no academic evidence in the scientific literature that suggests that catastrophic climate events result in stronger public support for climate mitigation. What can be seen, however, is that disasters tend to punish incumbents for perceived incompetence. That distinction matters. Because legitimacy is precisely what is needed to pursue long-term climate agendas, where benefits are diffuse and costs are felt in the present. When disasters erode confidence in public institutions, they do not create momentum for transformation, they weaken the very foundations on which it depends.
Building societal capital
We don’t have to look very far to see this dynamic play out. Consider Covid-19. The pandemic offered a clear example of how institutional competence in managing threats builds the societal capital needed for collective action. In South Korea for example, the government responded swiftly and competently: widespread testing, contact tracing, clear communication, and effective protection of vulnerable populations. Because people trusted their public health institutions, the response never became deeply politicised. Compliance with collective measures remained high, even when they required personal sacrifice.
The US experience told a different story. Covid-19 was immediately politicised. Low institutional trust meant that mask-wearing, lockdowns, and eventually vaccines weren’t evaluated as public health measures but as political loyalty tests. This in turn undermined the capacity for collective action.
The same principle also holds for climate policy. Japan offers a compelling example of this. For decades, the country has invested heavily in disaster preparedness: early warning systems, resilient infrastructure, community-based disaster response programmes. This demonstrated competence on adaptation has strengthened public trust in its institutions and probably helped to depoliticise climate policy more broadly. Unlike in much of the West, climate mitigation hasn’t fractured into tribal warfare. It is treated as a technical and governance challenge, not a moral identity issue imposed by elites.
If there’s one thing that the last ten years since Paris should teach us, it is that climate policy cannot be sustained without political legitimacy. This is why a stronger focus on adaptation matters: not because it replaces mitigation, but because it builds the precondition mitigation depends on: trust that institutions can manage risk competently and will not demand sacrifice without providing support.
In practice, this means prioritising visible protection: heat-resilient housing, flood defences. These are not speculative interventions. They are the basic functions of a state managing known risk. Their political value lies not in preventing every disaster, but in demonstrating competence when shocks arrive. This in turn, creates the political capital needed to pursue the harder work of mitigation: carbon pricing, and industrial transitions such as the shift from internal combustion engines to electric vehicles. The mistake of the past decade was not an excess of ambition, but a mis-sequencing of it. We tried to transform systems before reassuring societies. We relied on urgency to generate legitimacy, when legitimacy needed to come first.
Lessons for investors
There are lessons here for institutional investors as well. To preserve credibility, responsible investment needs to stay anchored in the financial materiality of the investors and issuers it represents, before it attempts to pursue systemic transition agendas. This is where climate adaptation matters. Not because it means abandoning mitigation targets, but because it is the precondition for successful transition planning.
The most direct climate risks investors and issuers face will result from physical climate impacts that are now locked in and cannot be diversified away. For long-term investors, strengthening their stewardship of vulnerable assets and increasing capital flows towards adaptation finance not only mitigates their exposure to these risks, but also establishes the foundation for systemic transition risk management.
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