Driving Finance Today for the Climate Resilient Society of Tomorrow

The document analyzes the financial system's failure to integrate physical climate risks into investment decision-making, which creates a growing adaptation financing gap. It identifies twelve key barriers—including inadequate public support, moral hazard, and low technical capacity—and proposes six systemic recommendations for the Global Commission on Adaptation (GCA). These include accelerating climate-relevant financial policies, developing robust risk management practices, and utilizing public institutions to catalyze private investment through blended finance and innovative instruments like resilience bonds.

• There is a significant and growing gap between the required financing for climate adaptation and available funds, with annual costs estimated between US$140 billion and US$300 billion by 2030.
• The financial sector predominantly focuses on climate mitigation and the low-carbon transition, while the integration of physical climate risks into investment decisions remains nascent and underdeveloped.
• Properly pricing physical climate risks may trigger 'capital flight' from the most vulnerable countries and communities, potentially increasing pressure on public balance sheets and contributing to economic destabilization.
• A pervasive 'moral hazard' exists where the expectation of government backstops or post-disaster aid discourages private and public investment in ex-ante resilience and adaptation.
• The report identifies twelve primary barriers to scaling adaptation finance, categorized into inadequate support, weak industry policy/practice, market barriers, nascent risk management application, and low institutional capacity.
• Current climate risk disclosure is often insufficient due to information asymmetry and a lack of mandatory requirements, though frameworks like the TCFD are beginning to address this.
• Blended finance, which uses public or philanthropic catalytic capital to take higher risks, is essential for 'crowding-in' private investment in markets perceived as too risky.
• Innovative financial instruments are emerging to bridge the gap, including resilience bonds, catastrophe (CAT) bonds, and parametric insurance products like the CCRIF and ARC.
• The report recommends that the GCA promote mandatory climate-related financial disclosures and the development of a standardized taxonomy for adaptation and resilience investments by January 2020.
• Financial system governance bodies are urged to integrate physical climate risk into stress-testing and monetary policy, basing scenarios on expected warming trends rather than just international commitments.

APA

World Resources Institute (2019). Driving Finance Today for the Climate Resilient Society of Tomorrow. https://files.wri.org/s3fs-public/uploads/Finance_for_Climate_Resilient_Society_-_Global_Commission_on_Adaptation.pdf

Chicago

World Resources Institute. Driving Finance Today for the Climate Resilient Society of Tomorrow. 2019. https://files.wri.org/s3fs-public/uploads/Finance_for_Climate_Resilient_Society_-_Global_Commission_on_Adaptation.pdf.

Wikipedia

{{cite report |author=World Resources Institute |title=Driving Finance Today for the Climate Resilient Society of Tomorrow |date=September 2019 |url=https://files.wri.org/s3fs-public/uploads/Finance_for_Climate_Resilient_Society_-_Global_Commission_on_Adaptation.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitute2019driving, author = {{World Resources Institute}}, title = {{Driving Finance Today for the Climate Resilient Society of Tomorrow}}, institution = {World Resources Institute}, year = {2019}, month = sep, url = {https://files.wri.org/s3fs-public/uploads/Finance_for_Climate_Resilient_Society_-_Global_Commission_on_Adaptation.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }