Markets are starting to price a ‘resilience premium’ | Investment Week
An opinion piece by Alejandro Litovsky, founder and CEO of Earth Security, for Investment Week argues that while climate risk has been marking portfolios down for years, the reverse is also emerging — a measurable premium for the assets, bonds and infrastructure that build resilience.
After nearly 100 downgrades of power utilities since 2020, Moody’s did something unexpected in March 2025: it upgraded California’s PG&E, citing the utility’s $20bn investment in wildfire mitigation. For Earth Security founder and CEO Alejandro Litovsky, that reversal is a signal —markets beginning to pay a “resilience premium.”
Writing in Investment Week, Litovsky argues that as climate risk reprices assets downwards, the opposite force is now taking hold: assets, infrastructure and systems built to withstand physical stress are increasingly rewarded. The evidence is mounting across asset classes. In Florida, Swiss Re Institute research finds coastal habitats such as mangroves have cut insurance claims by roughly half. The IMF estimates climate vulnerability adds about 15.5 basis points to sovereign risk premiums for each percentage point of exposure — yet Tokyo’s €300m resilience bond drew €2.2bn of demand, seven times oversubscribed.
The catch, Litovsky writes, is that this evidence still sits scattered across rating agencies, insurers and market data. Build the architecture to surface it, he contends, and markets could steer the decade’s resilience-capital wave — already mobilising in the trillions — towards climate and nature.
Read the full opinion piece in Investment Week
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