The Resilience Advantage - Driving Private Equity Performance Through Climate Adaptation

Unwritten | The Resilience Advantage

Foreword

Phillip Marks - Unwritten, CEO

I'm delighted to share our latest paper, The Resilience Advantage. This is our latest perspective on how private equity firms can strengthen resilience to climate change and use precise, right-sized adaptation measures as a driver of portfolio company performance in years to come.

In my conversations this summer with leaders across our Private Equity and Infrastructure customer base, there is a recognition that this lever has a high ceiling for impact. This comes from the recent, lived experience within portfolio companies (or their peers) of shocks to their direct operations or supply chains from climate risks. As these shocks pose a greater impact on earnings, our customers are increasingly engaging their deal team and value creation colleagues in discussions about preventative investments that safeguard portfolio company revenues.

Against that backdrop, we've unpacked three key talking points in this paper:

Resilience can expand margins. We outline six operational levers that can be pulled to realise value from this agenda, each with measurable EBITDA impact.
Execution gaps may be holding firms back. We argue that strengthening resilience can be effectively managed by the PortCo teams of the future, but barriers exist today that threaten to confine insights and analysis to the desk.
A new operating model offers promise. AI-enabled, multilingual workspaces can embed climate risk and resilience capabilities throughout the portfolio, translating specialist insights into practical action for management teams to take on the ground. This technology can equip management teams to build resilience autonomously, without disproportionate expenditure of time, talent, or capital.

On behalf of the entire Unwritten team, we hope you enjoy the paper and wish you a restful summer break.

Section 1 - Why strengthening resilience to climate risks can expand margins

For most General Partners (GPs) in Private Equity today, the era of reliance on low-cost debt and roll-up strategies as primary engines for multiple expansion is in the rear-view mirror. More GPs are anchoring their investment thesis in deep operational transformation and tech-enabled value creation to drive the earnings growth and multiple expansion required for top-tier exits. Against this backdrop, severe operational shocks to the direct operations and supply chains of portfolio companies (PortCos) naturally gain a heightened level of significance.

Unplanned plant downtime now costs the world's largest 500 companies 11% of their revenues — totalling almost $1.4 trillion annually. On the supply chain side, averaging across industries, companies face major disruption of some kind every 3.7 years, well within a typical hold period. Over a ten year period, these shocks erase an average of 45% of LTM EBITDA across that window.

These disruptions have originated from a diverse array of sources, including cybersecurity threats, rapid technology advancement, regulatory shifts, legal challenges, public health crises, and financial instability. Deal teams and boards across the portfolio of many GPs are deeply interested in fostering strong business conduct and effective mechanisms that build resilience to this roster of threats. However, whilst extreme weather events and other climate risks ought to have sat amongst this ecosystem, they may have been misunderstood in past years or viewed by some leadership teams as being too infrequent or unlikely to warrant the preventative investment that can limit associated losses. Today, this perspective is undergoing fresh scrutiny as the financial impacts stemming from operational disruption brought about by the increasing frequency and intensity of weather events linked to anthropogenic climate change are observed across a broader range of countries and sectors.

As this downside exposure is becoming better understood by GPs and the leadership teams at their PortCos, buzzwords around physical climate risk, adaptation investment and strengthening resilience are becoming more commonplace in private markets. Less widely recognised have been the ways in which proactive investment in resilience strengthening measures that reduce the operational downtime impact from physical climate risks can deliver meaningful margin expansion at portfolio companies.

The table below holds six value creation levers, each with an operational problem that is worsened by increasing climate risks in the years to come and a solution set that holds a measurable EBITDA impact. Together, they make the case that strengthening operational resilience to climate risks belongs in the value creation plan.

Lever	The problem	Building resilience & bottom line impact
Secure insurance & reduce premium increases	Coverage is harder to secure for some portfolio companies affected by physical risks and premiums are climbing. Global insured P&C losses have exceeded $100Bn for six consecutive years, totalling $107Bn in 2025, and US property premiums rose ~48% between 2020 and 2024. Some providers have already exited parts of California and Florida after years of escalating losses. Most companies aren't presenting site-level risk data or documented mitigation to underwriters — so premiums get set on broader risk profiles, not the protections actually in place.	• Consider running site-level risk assessments for each insured asset; catalogue existing mitigation. • Where appropriate, invest in targeted resilience measures that enhance insurability. • Evidence can be presented to underwriters at renewal — in their language, with verifiable data. • EBITDA impact: Securing coverage can help protect some or all revenue streams from disruption arising from worsening physical climate change. Documented site-level adaptation actions can be presented to underwriters, with the potential to reduce premiums and lower costs.
Prevent operational downtime	Averaging across industries, companies can now expect to face supply chain disruptions of a month or longer every 3.7 years — well within a typical hold period. These shocks erase 45% of one year's EBITDA on average over a decade. Beyond direct losses, McKinsey also note that there is “an additional risk of permanently losing market share to competitors that are able to sustain operations or recover faster”, whilst S&P Global projects $1.2Tn in annual corporate physical risk costs will be added to this picture by the 2050s without adaptation.	• Facilities can be profiled by revenue contribution, operational criticality, and hazard exposure. • The cost of an outage at each site should be quantified in terms of lost revenue. • Where the risk to revenues is highest and implementation costs are lowest, targeted adaptation measures may be warranted. • EBITDA impact: Revenues can be preserved as recovery times at critical facilities are cut and the opportunity window for faster-recovering or unaffected competitors narrows.
Win new RFPs and reduce existing customer churn	Large companies are required by EU regulation to report on the environmental performance of their supply chains — and around 90% of their footprint sits with (often smaller) suppliers. In addition to large buyers demanding data, competitive RFP processes are demanding that applicants evidence robust ESG policies and strong business conduct around risk and resilience. Suppliers who can't meet this moment are disadvantaged in procurement and contract renewals.	• Key buyers or prospective customers subject to sustainability reporting requirements such as CSDDD — or where a cultural preference exists for robust ESG policies and strong business conduct around risk and resilience — can be identified. • Ensure that ESG data infrastructure and risk analysis consistently meets the needs of proposals or existing customers' supply chain reporting demands. • Sustainability attributes, data and analysis can then be tracked and presented in competitive RFP processes. • EBITDA impact: Existing revenue streams can be protected where customers require supplier data. New streams may be opened up by a stronger profile in procurement processes.
Protect the supply chain	Global supply chain disruptions rose 38% YoY in 2024. In the same year, 76% of European shipping companies reported disruption throughout the year, with climate change cited as a significant driver. Coupled with this, only 42% of companies see into tier two or beyond of their supply chain, where concentrated dependencies sit. Such complex and delicate supply chains are experiencing further shocks through worsening physical climate risk and volatile, uneven transition risks associated with a fractured climate policy landscape globally.	• The specific vendors and sites that constitute critical points of concentrated vulnerability within the supply chain can be identified and mapped. • Modelling the hypothetical financial impact of an outage at a key vendor site builds the evidence base. • Consider near- or dual-sourcing strategies where physical risks present a material threat to a specific vendor in the supply chain. • EBITDA impact: Strategic implementation of dual-sourcing and near-sourcing can mitigate the margin compression typically associated with increasingly frequent and intense physical climate risks. By maintaining business continuity, companies can stabilise their revenue streams and hedge against sudden increases in supplier costs.
Lower borrowing costs	Some lenders are increasingly asking for environmental risk data in credit assessments at origination and refinancing. Sustainability-linked loan (SLL) issuance reached $463Bn globally in 2024 — up 18% YoY, and the bar for credible KPIs was raised in 2025 — favourable terms now require real data behind the commitment. In March 2025, Moody's upgraded PG&E Corp., citing wildfire risk mitigation as a factor strengthening its financial profile.	• Reporting infrastructure for credible SLL KPIs — including climate risk assessment findings, emissions data and CAPEX against adaptation plans — underpins favourable terms. • This data and analysis can then be presented to the lending group where favourable rates are being sought through an SLL (or equivalent) during refinancing. • EBITDA impact: The cheaper cost of capital does not directly alter operational EBITDA, but it can support improvements in Free Cash Flow.
Strengthen sustainability story at exit	Today, buyout funds hold ~32,000 unsold companies worth $3.8Tn, with nearly 40% held for five years or more. In a crowded exit market with interest rates and inflation also remaining elevated, buyers are running rigorous risk diligence and often assessing climate risks. It is reported that PE investors can capture a 6–7% uplift in exit multiples from well-executed sustainability strategies. Documenting climate risk assessment results, and subsequent actions taken to build resilience, can help maintain control over the narrative presented in Vendor Due Diligence (VDD).	• A well-evidenced resilience narrative can be built for each PortCo during the hold period, including site-level risk assessments for all critical assets and documented adaptation measures, alongside key episodes where such measures delivered a clear ROI. • ESG vendor due diligence can be commissioned as part of the sell-side process. • EBITDA impact: A robust and well-documented climate resilience strategy can drive multiple expansion, particularly when it demonstrates a strong return on investment throughout the hold period and offers a compelling outlook for the next ten years.

Section 2 - A new operating model for strengthening resilience

The Centralised Status Quo

While the investment case for building resilience to climate risks across the portfolio is evidenced in the prior section and offers tangible opportunity for some GPs, an execution gap can persist that prevents the financial opportunity being realised within the hold period or on exit.

In the current paradigm, GPs are typically responsible for conducting climate and nature risk assessments of PortCos. These are deployed primarily for initial due diligence, reporting, and periodic portfolio monitoring during major inflection points for portfolio companies, such as rapid inorganic expansion. The disconnect in this status quo is that while the GP is proactively seeking to understand the financial risks, PortCo management teams sit on the front line of operational exposure. PortCo executives manage the day-to-day realities of supply chain fragilities, physical asset degradation, and volatile commercial shocks driven by shifting policy agendas, technological disruption, and ever-changing customer sentiment. While the data generated by the GP has potential to be decision-useful for these operators, traditional frameworks may fail to bridge the gap between investor-level insight and frontline execution.

The Drivers That Limit Action

Historically, translating portfolio-wide climate insights into localised, company-level value-creation strategies has been limited by three entrenched structural barriers:

The Maturity Gap: Sustainability and climate literacy within mid-market PortCo leadership teams remains uneven. A foundational lack of familiarity with climate risk outputs and complex underlying models can limit engagement.
Architectural Mismatch: Fund-level climate assessments are frequently designed by external advisors or legacy tools tailored for aggregate portfolio oversight. Consequently, the outputs are rarely structured or granular enough to be operationally actionable for a PortCo.
The Language and Resource Bottleneck: Particularly within lower-middle market PortCos, language barriers and constrained resources can cause bottlenecks. When climate risk summaries are distributed to portfolio companies as standalone PDF files written in English, absent any supporting materials for capacity building or frameworks for implementation, PortCo management teams can feel alienated and stifled in their ability to generate operational value.

To overcome these hurdles, already stretched and time-poor GP sustainability teams would need to dedicate disproportionate effort to act as teachers, translators, and data specialists. Alternatively, some PortCos would need to absorb the cost of hiring local advisors or licensing separate tools. This inefficient duplicative approach forces the PortCo balance sheet to fund the same work twice.

A New Operating Model

Advances in technology and specialised applications of AI are beginning to unlock a new, highly collaborative operating model. This shift can help both GPs and PortCos pursue their distinct and overlapping risk management and value-creation goals across the hold period, without disproportionate expenditures of time, talent, or capital on either side.

By pioneering a secure, cloud-based architecture, platforms like Unwritten are designed to extend workspace access across a GP's portfolio. This decentralised approach can turn climate risk and resilience analytics into a more accessible, localised capability. Within this modern operating ecosystem, each PortCo is equipped with a tailored workspace built on three pillars:

On-Demand Localised Upskilling: Multimedia educational curricula and technical toolkits are delivered in the user's native language. This works to raise PortCo management to a common baseline of climate competence without taxing GP resources.
Multilingual AI Copilots: Native AI tools operate across languages to interpret complex risk signals, explain methodology, automate tedious data ingestion, and accelerate the planning of localised resilience strategies.
Deeply Collaborative Workflows: A direct, secure workspace facilitates real-time alignment between the GP and individual PortCos. This space streamlines data ingestion, standardises report generation, and clearly evidences the implementation of asset-level adaptation measures.

The Commercial Upside

Building resilience to climate risks across portfolio companies can mitigate material financial impacts and position the business as a premium, sustainable asset with longevity. GPs now have the option to more effectively cultivate that resilience through a new operating model that directly equips management teams with innovative tools. The next section details how that operating model can be deployed at scale.

Through Unwritten, we analyse climate risks using publicly available location data and provide our portfolio companies with secure access to review, amend, and validate their own site information. Both Hg and portfolio companies can independently explore the results and generate insights through its AI feature: Hg uses the insights to support investor reporting and portfolio oversight, while portfolio companies can identify, prioritise, and implement actions to reduce or mitigate climate-related risks. This collaborative approach ensures that the analysis is both accurate and actionable, enabling portfolio companies to strengthen their operational resilience through practical, data-driven adaptation strategies.Caroline Löfgren, Chief Sustainability Officer, Hg

Section 3 - Establishing The New Operating Model: A Five-Step Framework for General Partners

GPs can use some or all of the steps in this Section to guide their roll-out of the new operating model.

Step 1 - Understanding materiality

Using initial findings from due diligence or portfolio analysis, the GP can play an important role in ensuring analysis is well directed and relevant. It can use its toolkit to narrow the focus of PortCo management from an initial, larger universe of assets across direct operations and the supply chain, down to the often far smaller group of sites where physical climate risk poses a financially material threat to the business. This helps direct downstream effort by the PortCo toward where the return on resilience investment is likely to be highest.

Profile each PortCo for overall exposure using diligence screening or the latest portfolio analysis results.
Sequence engagement to start with the PortCos where physical climate risk is most material and where the remaining, anticipated hold period is longest — resilience work may need runway to translate into realised value ahead of exit.

Outcome: A sequenced list of the PortCos that the GP would like to engage on resilience building work, containing the sites at each company that may require deep-dive analysis.

Step 2 - Setting portfolio companies up for success

Before any analysis starts, the GP and each relevant PortCo stakeholder (often a Head of Sustainability, or similar) should establish a preferred engagement model for this work, laying out the roles, responsibilities and governance measures that fall on both sides. Our starter checklist of items to cover is below:

Data — Who will hold the “Master” view of company and asset data relevant to this exercise? Who will upload this data to the climate risk assessment tool and ensure sufficient QA has taken place? How often will this data be refreshed?
Analysis — Once data is uploaded, what are the specific analytical tasks that the PortCo stakeholder should carry out?
Reporting — What are the key internal and/or external reporting outputs that will communicate this analysis? What cadence will be used for each reporting output/audience? Who will hold the pen on drafting, reviewing and sign-off for each output?
Acting on findings — Once material risks are pinpointed, how will resilience measures be agreed upon between the GP and PortCo management?

Outcome: A standard operating procedure document, reviewed by the GP's Sustainability Lead and relevant PortCo stakeholders.

Using Unwritten's analytics allows for ongoing assessment and monitoring of climate related risks across our portfolio, moving away from an annual assessment that was conducted in the past, primarily for reporting. This allows us to engage with our portfolio companies to deploy timely and strategic mitigation measures or opportunities to create resilience during our holding period and beyondYve Kindargi, Sustainability Manager, Oakley Capital

Step 3 - Building Capacity

For PortCo stakeholders to own and operate this workstream with significant autonomy, they need proficient knowledge of the analytical toolkit as well as the necessary context to engage credibly with insurers, lenders, customers, and buyers. The process of building this capacity must be time-efficient; accessible to all PortCos, irrespective of their native language or degree of sophistication on climate topics; and mustn't fall squarely on the shoulders of the GP to be delivered.

A scene-setting workshop, delivered by the GP or a third-party expert, can inject early momentum into this programme and lay down the key context. As we discuss in Section 4, the latest AI-powered training tools then offer a deeply efficient mode of delivery for the core curriculum, available in any language and conveniently hosted within the risk analytics software.

Outcome: Confident PortCo stakeholders capable of autonomously operating the analytical toolkit, critically assessing results, selecting levers to build resilience and presenting the associated business case to board members where required.

Step 4 - Generating an accurate view of net risk

For the sample of site locations where the gross climate risk is operationally and financially material, a ledger of existing resilience measures should be entered into the analytical toolkit to ensure that actual exposure isn't overstated. This is a task which should be revisited regularly as new measures are implemented, new sites are added through inorganic platform expansion, existing mitigation measures are upgraded, or hazard data is materially improved.

Examples of structural operational resilience measures — flood barriers, drainage upgrades, raising critical equipment, installing backup power, fire suppression, structural reinforcement.
Examples of continuity-focused operational resilience measures — published business continuity plans, alternate production routing, inventory buffers at critical points.

Outcome: An up-to-date view of material climate risks facing the portfolio company, net of the latest measures taken to adapt the business model and provide structural resilience.

Step 5 - Selecting and implementing levers

For each site where net risk remains material, a selection of right-sized measures to build resilience should be shortlisted, selected and then implemented in a timely manner. Consider the checkpoints below when executing this Step:

Generate the shortlist of site-level, hazard-specific resilience measures, with CAPEX intensity indicators and anticipated impact.
Where a second opinion is preferred before CAPEX is deployed, engage third-party specialists such as site-inspection firms or supply chain experts with industry-specific expertise.
Build a CAPEX/OPEX plan with sequencing and budget, agreed between PortCo and GP.

Outcome: A well sequenced adaptation and resilience plan for the remainder of the hold period, with cost estimates.

Step 6 - Monitoring

As the adaptation and resilience plan is implemented at key sites, the PortCo uses the workspace to evidence this accordingly and the live calculation of net risk improves. The governance model outlined in Step 2 should propose the cadence or materiality thresholds which dictate when input data should be updated on the workspace. Similarly, whilst the GP isn't running implementation, it should review analysis at an agreed cadence and collaborate with the PortCos as required.

Outcome: A quarterly (or similar) progress report on the implementation of resilience strengthening measures which can inform conversations at any time with board members, LPs, lenders or insurers.

Section 4 - The Unwritten Advantage

Executing against a value creation plan lever often requires collaboration across multiple stakeholders within PortCo operations and driving operational excellence and transformational change from within. Unwritten has built the operating system to equip existing sustainability stakeholders at PortCos with the tools to efficiently and autonomously strengthen operational resilience to physical climate risks without the need to ramp up such programmes at scale. The system is designed to accommodate varying levels of sustainability maturity across PortCos. Developed through repeated deployment across multiple organisations, our approach is grounded in practical implementation experience and designed to deliver results in real-world operating environments.

Our three-pillar approach provides a repeatable framework for scaling resilience-building across PortCos, combining local ownership with portfolio-wide consistency and oversight.

Pillar 1: Enablement

Setting PortCos up for success through clear role definition, engagement and democratised access.

Unwritten removes the barriers to entry, freeing up teams to focus on driving operational improvements rather than navigating process complexity. Each PortCo gets a dedicated, secure, private workspace. Their team logs in, sees their assets and risk data, and works in their own language — the platform translates everything in real time. The GP sets the agenda and expectations, retains full visibility across all workspaces, and can step in at any point.

Sustained engagement. Traditional workshops are one-and-done, with engagement typically dropping after the consultant leaves. Unwritten Workspaces embeds learning directly into day-to-day workflows, ensuring engagement builds and compounds throughout the hold period.
Global teams included. GP-language materials exclude non-English operations teams. Unwritten's real-time translation means the site lead anywhere in the world can engage directly, without delay.
One environment, clear roles. Email and shared drives fragment the work. Unwritten's dedicated workspace puts the PortCo in the driving seat — the GP shifts from running the process to overseeing it.

Pillar 2: Accuracy

Providing a high-resolution, site-level view across the portfolio, adjusted for resilience measures, with continuous monitoring of emerging risks.

Unwritten assesses site-level physical climate risk analysis against 18 physical hazards using models that offer up to a 30m spatial resolution globally. The platform's AI Copilot compiles thousands of data points to recommend highly specific adaptation and resilience strategies for each site automatically, with cost indicators and expected outcomes. PortCo stakeholders can easily input or update existing site-level adaptation measures, so that the platform can calculate an accurate view of net physical risk exposure.

Pillar 3: Efficiency

Optimising workflows for GPs and PortCos to accelerate risk assessment and strengthen resilience, whilst minimising manual effort.

While the case for climate risk assessment and resilience planning work is strong, this accounts for only a fraction of the comprehensive value creation plan that is being implemented across the hold period. As such, this work must be efficient and not draw on a disproportionate amount of resources. Unwritten streamlines the process through key efficiency drivers:

Seamless Data Integration: What traditionally takes weeks of manual data gathering and entry is reduced to a simple upload. Unwritten's AI Copilot handles multi-format data ingestion automatically across the entire portfolio.
Rapid Strategy Development: Rather than waiting weeks for consultant-led or in-house resilience agendas to be developed, the platform utilises rigorous site-level analysis to generate customised mitigation and adaptation plans in minutes.
Dynamic Exportable Content Generation: Moving beyond rigid PDF templates and static spreadsheets, Unwritten provides AI-driven document editing. Users can employ natural language prompts to instantly adjust the tone, technical depth, and visual elements to suit any stakeholder audience.

Operational resilience, strengthened across your portfolio

Unwritten Workspaces is the operating system for strengthening PortCo resilience — a secure, private environment for every portfolio company to assess physical risk, build adaptation plans, and manage the evidence base that feeds insurance, financing, customer, and exit conversations. Used by teams and portfolio companies at leading private market investors across four continents.

References

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