Financing Climate Adaptation and Resilience

Meggie Eloy

5 years: Technical analysis

In this video, Meggie explores why adapting to climate change is just as vital as cutting emissions. She breaks down the key differences between adaptation and resilience, highlighting why investment in climate-proof infrastructure, food systems, and public health is essential for long-term stability.

ESG Bond Markets

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Financing Climate Adaptation and Resilience

4 mins 40 secs

Key learning objectives:

Understand adaptation and resilience (A&R) and why they are essential
Recognise the scale of financing needed for A&R projects
Identify key principles for credible resilience investments

Overview:

Adapting to climate change is as crucial as reducing emissions. Investment in adaptation and resilience (A&R) projects helps communities and ecosystems withstand climate impacts. The UNEP estimates a $300 billion annual need by 2030, but current funding falls far short. Climate Bonds Initiative has identified seven key resilience themes and aims to mobilise $1.5 trillion in investments by 2025. By financing A&R projects, we reduce risks, protect livelihoods, and enhance economic stability in a changing world.

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Summary

What is the difference between adaptation and resilience?

Adaptation involves taking proactive steps to reduce climate risks, such as developing drought-resistant crops or building sea walls. Resilience, on the other hand, is the ability of communities, ecosystems, and economies to withstand, recover, and thrive amid climate challenges. Examples include urban forests that cool cities during heatwaves and flood-resistant infrastructure that protects coastal areas.

Even if emissions stopped today, locked-in climate impacts, like extreme weather and rising temperatures, make adaptation essential for survival and economic stability.

Why is investment in adaptation and resilience critical?

The UNEP estimates that developing countries alone will need $300 billion annually by 2030 for adaptation, yet current funding is only $27.5 billion. This massive funding gap must be closed to help communities and ecosystems cope with intensifying climate risks.

Investment in adaptation and resilience protects lives, infrastructure, and economies. Without it, climate impacts will drive higher economic losses, social instability, and increased inequality.

What principles guide effective adaptation and resilience investments?

Climate Bonds Initiative (CBI) has outlined three key principles:

Substantial contribution to climate resilience: Projects must meaningfully reduce risks (e.g., flood defences) or address climate stressors (e.g., water efficiency in drought-prone regions)
Avoiding maladaptation: Investments must not worsen climate vulnerability, such as creating social inequities while reducing emissions
Avoiding significant harm: Projects should not undermine other sustainability goals, like biodiversity loss from large-scale renewable energy projects

These principles ensure adaptation financing is effective, equitable, and environmentally responsible.

What are the key themes in adaptation and resilience?

CBI has identified seven key resilience themes for investment:

Resilient agrifood systems: Strengthening food security amid climate shifts
Resilient industry and commerce: Making supply chains and production more climate-proof
Resilient cities: Designing urban spaces that withstand extreme weather
Resilient health: Protecting public health from climate-related risks
Resilient infrastructure: Building durable energy, transport, and water systems
Resilient nature and biodiversity: Enhancing ecosystems to mitigate climate impacts
Resilient societies: Strengthening social structures and governance for climate adaptation

These categories help direct capital towards projects with tangible climate resilience benefits.

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Meggie Eloy

Meggie Eloy is a Senior Technical Analyst in CBI's Capacity Building and Technical Assistance team, providing technical assistance to prospective debt issuers through portfolio reviews, entity readiness assessments, GSS+ training, and capacity building. She also supports clients in creating credible transition plans by reviewing existing plans to ensure they follow best practice guidelines. Prior to her role, she worked in CBI's Certification team, reviewing and processing green bond applications to determine certification. She has assisted in delivering over 300 billion US Dollars of Use of Proceeds debt instruments, focusing on limiting global warming to at or below a 1.5°C future. Meggie has worked across sectors such as Renewable Energy, Low Carbon Buildings, Low Carbon Transport, and the transition of hard-to-abate sectors like Steel, Cement, Hydrogen, and Basic Chemicals. She holds an MSc in Corporate Environmental Management from the University of Surrey, a BSc in Geography from the University of Leicester, and a CFA Level 4 qualification in Climate and Investing.

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