Real - and perceived - barriers to private finance. Organizations launch Guide for Adaptation and Resilience Finance.

Today is Thursday, April 18, 2024.

The Guide for Adaptation and Resilience Finance is a recently published set of recommendations for expanding private sector finance towards climate adaptation and resilience.

After COP28 urged the need, emphasising emerging markets, the document is the result of a partnership among UN, through its Office for Disaster Risk Reduction (UNDRR), KPMG, Standard Chartered Bank (UK) and other major financial institutions, multilateral development banks and NGOs.

According to the press release, “today, less than 10% of all climate finance is allocated to adaptation. The global adaptation financing gap is widening, and current levels of funding remain well below the estimated USD 212 billion per year needed through to 2030 in developing countries alone”.

And from the publication itself, “primarily, the Guide was designed for Financial Institutions (by this we mean commercial banks, development finance institutions, and investors). However, it has a broad applicability for other financial institutions and investors engaging their clients in financing and investment opportunities related to natural hazard adaptation and resilience, including private lending and investment arrangements and public market capital raising”.

The Guide maps over 100 activities of interest - eligible investments - clustered into seven “resilience” groups: agrifood systems, cities, health, industry and commerce, infrastructure, societies, nature and biodiversity nature-based solutions.

Here a few examples:

1. climate-resilient crops

2. vertical farming

3. parametric insurance schemes for agriculture

4. relocation, including building of new settlements

5. desalination plants in areas of water stress due to climate change

6. health surveillance technologies to identify and pre-empt natural hazard driven disease patterns

7. emergency onsite backup power

8. siting cabling and electrical equipment above likely flood levels

9. mangrove conservation and replanting.

10. early warning systems

Each eligible investment is assessed taking into account environmental objectives and social outcomes.

Click here for the UNDRR press release and at the image below to download the 39-pages report itself.

Table 3 on page 9 is interesting. It brings real and perceived barriers to private finance for natural hazard adaptation and resilience.

As every region on Earth is facing increased natural hazards, it’s a key roadmap to become available ahead of COP29, be followed and executed.

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April 2024. Guide for Adaptation and Resilience Finance. Cover page.