The letter examines how rising global temperatures are producing warmer, drier fire-weather conditions that lengthen wildfire seasons and increase their severity across the American West and, increasingly, Europe. Smoke from Canadian wildfires blanketing New York this summer illustrates how communities far from a fire’s origin remain exposed to its consequences. Redwood Grove views this persistent increase in physical risk as a durable driver of capital allocation, as fire departments modernize aging fleets, utilities harden their networks, and governments invest in prevention, suppression, and recovery. The letter frames climate adaptation as a multi-year investment theme spanning durable equipment, critical components, and resilient infrastructure—reinforced by a conversation with Admiral James Stavridis, who named climate change among the nation’s greatest security risks. The letter also welcomes David Bluestein, who joins the firm to lead business development.
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2026 Climate Impact Report
Builds on last year’s finding of a market-wide retreat from Net Zero commitments, showing RGC’s portfolio held its ground even as voluntary reporting slipped. Only 3% of the portfolio is Not Aligned with net zero goals — the lowest of any benchmark tracked — while 48% is Aligned or Aligning (62% once non-reporting clean tech holdings are included), and the portfolio remains the most carbon-efficient among its peers at 65 tons of CO₂ per $1 million of sales versus 105 for the Russell 1000 Value. Also asks whether AI is becoming the next high-emissions sector, as data center growth is now outpacing Big Tech’s own decarbonization targets.
Water Under Pressure: Climate Risk and the Economics of Scarcity
Climate-driven disruptions to the water cycle are creating mounting economic pressures—from municipal credit risk to infrastructure demand—highlighting a critical and often overlooked investment theme.
Opportunity in an Era of Policy Volatility
Rapidly shifting federal policy has driven market volatility that reflects narrative churn more than underlying fundamentals. Redwood Grove views this environment as a source of opportunity, focusing on companies positioned to benefit from structural change while underwriting long-term climate risk rather than short-term noise.
