Climate impacts are increasing, and we know that more finance is
needed. This includes finance for adaptation, where the annual
gap is estimated at $387 billion by 2030 and cannot be met by
public finance alone. Private investment in adaptation has lagged
far behind that in mitigation. This is because revenue streams
are limited, investor time horizons can be short, and there are
limitations to data about the economic and social impacts of not
investing in adaptation, as well as a lack of established
methodologies for integrating adaptation and resilience into
climate investments.
We must develop approaches so that climate- and nature-related
physical risks are more accurately priced into investment
decisions. There is also more we can do, including continuing to
reform the Global Financial System so that more finance is
available from multilateral development banks and development
financial institutions to support mobilising private finance for
adaptation. We can collaborate with institutional
investors, industry bodies, Development Finance Institutions and
technical experts to build the business case for climate
resilient investment across technologies, sectors and scales of
investment. Effective partnerships between the public and private
sectors will be critical to making these approaches a reality.
FCDO is increasing its collaboration internationally and across
the private sector to drive forward this agenda.
