Mobilizing Private Adaptation Investment
Unlocking adaptation investment from the private sector requires greater clarity on risk and return profiles of adaptation investments as well as catalytic use of public finance to de-risk private investment.
2030 Goals
- There are clear and tested pathways for different types of private institutions (e.g., asset managers, commercial FIs, corporations, etc.) to invest in adaptation and resilience, with developed business models and tested rates of return.
- Private institutions have substantially increased capacity and expertise across teams, especially finance and operations, to proactively identify and pursue adaptation investment opportunities and to evaluate, price accurately, and act on physical climate risk impact across investment portfolios.
StatusNo progress
No progress
- Private sector adaptation commitments tracked in Climate Policy Initiative's Global Landscape of Climate Finance include ~USD 500 million from corporations and ~USD 500 million from institutional investors (including foundations). This is likely a significant underestimate.
- Virtually no private sector companies self-identify their investments as “adaptation.” The lack of data on private sector adaptation finance yields significant uncertainty regarding current progress on addressing climate vulnerabilities and leaves decision-makers without critical information about where they should target additional investment.
Leading Actors
Private FIs
Lightsmith Climate Resilience, Sun Funder
Public FIs
The Global Fund for Coral Reefs, British International Investment
Multilateral Development Banks
Asian Development Bank (ADB), African Development Bank (AfDB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank (IDB), New Development Bank (NDB - BRICS Bank), World Bank
International Organizations
United Nations Development Programme, Green Climate Fund, Global Environment Facility
Supportive Stakeholders
Adaptation and Resilience Investors Collaborative (ARIC), Investment Mobilisation Collaboration Alliance (IMCA)
Milestones
The below events contain milestones related to Mobilizing Private Adaptation Investment.
November
UNFCCC COP30
Milestones
Mobilizing Private Adaptation Investment
New financial instruments announced, including adaptation-focused bonds and guarantees to crowd in institutional investors. Commitments from corporates and investors to scale up adaptation finance, leveraging blended finance models and de-risking tools.
Resources
A wide range of efforts exist to draw the private sector into adaptation (both organized by the private sector and externally organized). Some of these are listed below.
Evolution of CRAFT
Private Finance, Mobilizing Private Adaptation Investment
The Lightsmith Group, with funding from Nordic Development Fund (NDF) and the Global Environment Facility (GEF), is leading the Climate Resilience and Adaptation Finance and Technology-transfer facility (CRAFT) project. The funding will support development and launch of the first private sector investment strategy for climate adaptation and resilience solutions. Conservation International is the GEF Implementing Agency for this project.
Project GAIA
Private Finance, Mobilizing Private Adaptation Investment
A multi-stakeholder climate and blended climate finance platform, supported by public and private sector organizations that offer long-term loans for climate adaptation and mitigation investments in 19 of the most climate-vulnerable countries in the world, making the funding accessible through sources previously unattainable to participating countries.
InsuResilience Investment Fund
Private Finance, Mobilizing Private Adaptation Investment
InsuResilience Investment Fund (IFF), managed by BlueOrchard, combines resources from the private sector, in this case, impact funds, with technical assistance and concessionary first-loss guarantees from public institutions like the KfW Development Bank.
SCALE
Private Finance, Mobilizing Private Adaptation Investment
The SCALE project explores the launch of a new scalable climate finance platform to provide the full range of equity, credit, and technical assistance to private companies whose technology and solutions address the impacts of climate change globally. Building on the lessons learned from the first private investment fund for adaptation and climate resilience, Lightsmith will map climate resilience companies, engage investors and funders, and design systems for the new platform strategy.
G20 Sustainable Finance Working Group
Private Finance, Mobilizing Private Adaptation Investment
Under the 2024 Brazilian Presidency, focus on nature-based solutions financing by exploring innovative financial instruments and leverage risk-sharing to maximize private sector participation.
UNFCCC Adaptation Private Sector Initiative (PSI)
Private Finance, Mobilizing Private Adaptation Investment
UNFCCC's Adaptation Private Sector Initiative (PSI) under the The Nairobi work programme: UNFCCC knowledge-to-action hub on adaptation and resilience, The Private Sector Initiative (PSI) aims to catalyze the involvement of the private sector in the wider adaptation community.
CPI report: Tracking and Mobilizing Private Sector Climate Adaptation Finance
Private Finance, Mobilizing Private Adaptation Investment
CPI Analysis finds the need to develop a taxonomy for tracking private sector finance in adaptation and build a machine learning model and dataset to support the expansion of its tracking.
Mobilization of Private Finance by Multilateral Development Banks and Development Finance Institutions in 2023
Private Finance, Mobilizing Private Adaptation Investment