Climate change is creating enormous challenges for businesses, governments and ordinary homeowners. Rising temperatures, flooding, severe storms and other weather-related problems can cause billions of dollars in damage. And the costs don’t necessarily end when the immediate disaster is over. But for some companies, the need to adapt to a changing climate is also creating business opportunities.
While investors may associate climate-related investments with solar panels, wind turbines or electric vehicles, there’s another side to the equation. Companies that make air-conditioning equipment, manage water supplies and help rebuild damaged infrastructure can also benefit from spending on climate adaptation. Here are three ways investors can participate in this growing market.
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Carrier Global: Keeping Buildings Cool as Temperatures Rise
Air conditioning may not be the first thing that comes to mind when investors think about climate change.
But as temperatures rise, keeping homes, offices and other buildings cool becomes increasingly important. And one of the biggest names in the business is Carrier Global, which trades on the New York Stock Exchange under the ticker CARR.
Carrier has a long history in the air-conditioning business. In fact, the company traces its roots to the invention of modern air conditioning in 1902. Today, Carrier manufactures heating, ventilation and air-conditioning equipment for residential and commercial customers, including temperature-control systems used in transportation and other industries.
In addition to the rising need for HVAC systems, Carrier benefits from the replacement needs of customers with older, energy-inefficient systems.
And business has been growing.
In the second quarter of 2026, Carrier reported net sales of $6.35 billion, an increase of 4% from the previous year. Orders were even stronger. Carrier said companywide orders increased approximately 40%, excluding two businesses it was exiting. Commercial HVAC orders jumped about 65%. The ongoing explosion of AI data centers has helped Carrier significantly, as orders in this category more than quadrupled.
There are risks to an investment in Carrier, however. In spite of all this good news, for example, Carrier’s operating profit actually fell 9% in the second quarter, to $825 million. The company reported that its margins were squeezed by higher input costs and changes in its product mix, even as sales increased.
The tough housing market is also a headwind for Carrier, as higher interest rates have slowed new construction. Homeowners are also feeling the pinch of high inflation, with some of them delaying expensive equipment replacements.
Still, the need for better heating and cooling systems will always be there. Summers continue to get hotter, equipment continually ages, and profitable businesses continue to expand. Carrier offers investors a relatively straightforward way to participate in this industry.
Xylem: Investing in the World’s Water Infrastructure
“Climate change” is not synonymous with “global warming,” although the two terms are often interchanged. Beyond rising temperatures, climate change is creating a host of other calamities, from flooding and droughts to unpredictable rainfall. Taken as a whole, these occurrences make it difficult for many communities to maintain reliable water supplies.
That’s where Xylem comes in.
The company, which trades under the ticker XYL, provides water technology and equipment used by customers around the world. Its product line includes pumps, water-treatment equipment, monitoring systems, and technology designed to help customers manage water more efficiently.
Although these products are all related, as a whole, they give Xylem several diverse sources of revenue. Cities may need to upgrade aging water infrastructure, for example, while industrial customers may need better systems for treating and reusing water. Communities facing heavier rainfall may also have to invest in equipment capable of handling increased water flows.
Xylem’s recent financial results show that it’s in a very profitable business. In the second quarter of 2026, the company reported that orders jumped 42%, reaching approximately $3.1 billion. Adjusted earnings per share increased 16%, to $1.46. Overall, the company reported revenue of $2.3 billion, up 2% from the previous year.
One of the risks of investing in Xylem is that water projects can often take years to complete, and orders don’t immediately translate into actual revenue. Expensive projects can get delayed or canceled, minimizing the effect of a good order flow.
But water is essential to communities and businesses alike. As climate change contributes to shifting water-management needs, companies that can help provide reliable solutions, like Xylem, could continue to grow their profits.
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AECOM: Rebuilding and Preparing for the Next Disaster
AECOM, an infrastructure consulting and engineering company with the ticker ACM, benefits from both the “before” and “after” of climate-related events. Specifically, the company helps design and manage major infrastructure projects, including transportation systems, water facilities and coastal protection initiatives.
It also works with governments and other organizations on disaster recovery and rebuilding. After Superstorm Sandy, for example, AECOM worked on flood-protection projects in New Jersey designed to reduce the risk of future flooding. That’s the “before the next disaster” part of its business.
For the “after” part of its business, the company also provides disaster-recovery services. These include damage assessments, infrastructure repair planning, and reconstruction management.
Its financial results illustrate the opportunities, along with some of the risks.
In the third quarter of fiscal 2026, AECOM reported that its total backlog increased 13% to a record level. During the same quarter, the company secured approximately $4.2 billion in new project wins.
But the results weren’t all positive.
AECOM recorded a $337 million pre-tax charge related to delays and higher costs on a construction-management project. The company reported an operating loss of $76 million for the quarter. This highlights one of the biggest risks of investing in large infrastructure businesses. Projects can be expensive, complicated and subject to unexpected delays.
Spending decisions by governments and private-sector customers can also change with political priorities and economic conditions. Unlike some businesses, in which revenue is fairly predictable, AECOM could lose sales and contracts through little fault of its own.
With the increasing prevalence of climate-related disasters in the country, however, AECOM’s business is likely on fairly solid ground.
Investment in a changing world
Each of these three companies, Carrier, Xylem, and AECOM, could benefit in different ways from climate-related spending. Whether you’re looking to invest in heating and cooling, water-management technology and equipment, or climate infrastructure and disaster recovery, these three businesses stand to profit.
None of these companies is a pure climate-change investment, however. Carrier also benefits from ordinary equipment replacement and construction. Xylem serves customers dealing with water problems that have nothing to do with climate change. And AECOM works on many types of infrastructure projects.
But that may also be part of their appeal.
Investors don’t have to predict the next major hurricane, drought or heat wave to participate in these businesses. They can invest in companies supplying products and services that customers need for a variety of reasons.
Climate change presents enormous economic risks, and there’s no guarantee that companies addressing those risks will deliver strong stock-market returns. But for investors looking beyond traditional renewable-energy stocks, HVAC equipment, water infrastructure and rebuilding services offer three other ways to participate in a changing world.
This article is for informational purposes only and does not constitute investment advice.
