Resilience, AI, and climate finance
Three questions I’m bringing from London to Climate Week NYC
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I came home from London Climate Action Week in June with a notebook full of scribbled ideas and half-finished thoughts. A few of them have stayed with me, sharpened by a summer of record-breaking heat and smoke, fires across Europe and the Pacific Northwest, flooding in Nepal, and financing to help some of the world’s most climate-exposed communities prepare for and recover from these shocks, still nowhere near what is needed.
Acumen’s perspective is specific and partial: 25 years of backing intrepid enterprises serving low-income communities that other investors deem too expensive to reach. That vantage point may look narrow but, to me, it is where three questions that affect all of us come into focus.
1. How do we price resilience in developing markets?
Resilience is easiest to understand through what people actually pay for. A farmer buys a solar irrigation pump because it turns one growing season into two. A trader buys a cold storage unit to reduce food spoilage. A business purchases insurance against a specific loss. They are buying a product or service that helps mitigate a setback, absorb a shock, or recover more quickly when one occurs.
For enterprises serving low-income customers, however, climate risk also shows up one step removed: through the financial resilience of the people they serve. A lost harvest cuts customer income, which cuts what a borrower can repay. And a single drought or flood can affect thousands of customers in the same place at the same time.
GOGLA surveyed 2,600 pay-as-you-go solar customers in Kenya and Uganda who were behind on their repayments. More than half said drought, crop disease, floods, or extreme heat had cut their income. Likewise, in India, increasingly frequent climate shocks are causing structural risk to the microfinance sector that serves over 70 million low-income households. In fiscal year 2024-25, portfolios at risk more than tripled from 2.1% to 6.2%. The weakening repayment capacity further drives up the cost of capital for the most exposed and least protected.
That correlation is what makes resilience difficult to price. Diversification works when losses are spread across customers, geographies, and time. Climate shocks can do the opposite, hitting whole communities and portfolios at once. In wealthier markets, mechanisms such as reinsurance, catastrophe bonds, and government backstops can help distribute that risk. In many lower-income markets, those protections remain limited or unavailable.
Resilience becomes investable only when entrepreneurs, lenders, and investors find better ways to price and share risk, not simply document exposure to it. At Climate Week NYC, I’ll be listening for examples of how investors are doing that — and what could translate to the markets Acumen knows best.
2. Will AI expand opportunity or concentrate it?
Meaningful access to AI depends on two factors: an internet connection and reliable power. The map of who benefits from arguably the most significant technology shift since the internet is, more or less, the map of who already has that infrastructure in place. Without deliberate efforts to broaden access, AI risks compounding old inequalities.
Capital flows point to the same challenge. Of the $42.7 billion in AI capital committed across five emerging market regions since January 2023, 94% went to compute infrastructure, rather than to businesses using AI to deliver products and services to customers on the ground. Infrastructure investment is necessary, but infrastructure alone does not determine who ultimately benefits. And yet, AI is accelerating what entrepreneurs can do. Crop2Cash, co-founded by Acumen fellow – Michael Ogundare, is an agricultural technology company that uses AI to provide real-time, personalized advice to smallholder farmers in their local languages. It is using AI to serve customers faster and cheaper to deliver at scale, not to make Crop2Cash an AI company.
We are seeing a similar dynamic in e-mobility, where AI can help companies optimize battery performance, manage charging networks, and operate fleets more efficiently. When those efficiencies bring down the cost of serving customers, cleaner electric 2- and 3-wheelers that were once out of reach can start to make economic sense for lower-income users.
AI can expand opportunity when businesses intentionally use it to lower the cost, improve the quality, or extend the reach of products designed for low-income customers.
This has direct consequences for how Acumen invests. We are not looking for AI companies simply because they use AI. We are looking for companies where the technology can shift unit economics and create tangible value for customers who have historically been difficult to reach. As Climate Week NYC grapples with the AI revolution, that is the question I’ll keep asking: who benefits?
3. What actually moves money from commitment to action?
There is a hopeful theory that when wealthy countries feel the climate crisis directly, solidarity follows. Researchers have called this summer’s heat the most severe on record in Western Europe. If adaptation is becoming a line item in European budgets as a result, will that mean more funding for Africa and South Asia, or will it mean less?
Developing countries will need more than $310 billion a year for adaptation by 2035, according to UNEP. International public adaptation finance is running at just $26 billion a year and that figure predates the steep aid cuts that followed.
So what will it take to move capital into that gap?
Commitments are not enough. Capital moves when someone does the work of creating a market it can actually enter: matching different appetites for risk, solving for currency, and building the vehicles and pipeline investors need to deploy.
Match risk to the right capital. Our Hardest-to-Reach initiative brought 23 entities — philanthropists, impact investors, development finance institutions, a multilateral development bank, a global development fund, and a commercial bank — behind a single $250 million target, which closed in January. We built a dual, blended structure that allowed each to take a position they could actually hold. The point is not that every investor needs to take more risk. It is that the structure has to put the right risk in the right hands.
Design for currency risk, not around it. The naira has lost roughly 70% of its value against the dollar since 2022. A company can be growing sales locally while still losing ground in dollar terms. That is not a side issue for international investors; it is part of the economics of investing in these markets. More local-currency debt can help. So can backing businesses whose revenues and costs are naturally aligned in the same currency. But where foreign capital is required, currency risk also needs to be explicitly priced, hedged, or shared rather than left for the company to absorb.
Build the market, not just the pledge. Even deeply committed investors can struggle to deploy capital into climate-exposed markets if there is no fund or instrument through which to invest: no investable pipeline of companies, no local team to originate or assess opportunities, or no catalytic layer able to take risks that commercial capital cannot yet hold. Those pieces do not appear because a commitment has been announced. They have to be built, often over years.
That is the less visible work of climate finance, but it may be the most important. Market creation is not simply about finding more money. It is about building the structures that allow different kinds of money to move.
What I’m bringing to New York
In New York, many rooms will understandably focus on the mounting toll climate change is taking in the U.S. and Europe, the AI revolution, and the geopolitical forces reshaping global finance. My attention will also be on what those debates mean for the world’s most climate-vulnerable markets.
The thread connecting these three questions is design. Without structures intentionally designed to reach the people markets have often overlooked, resilience stays uninvestable, AI’s benefits stay unequal, and capital stays committed rather than deployed. The technologies, entrepreneurs, and business models already exist. The question I’m bringing to New York is whether we are willing to design the capital to meet their needs.
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