From risk to return: investing in climate change adaptation

[Extract] Executive Summary. Too often, climate change is thought about as a challenge for future generations. But as records continue to be broken, it is increasingly clear that the effects of climate change are being felt today. There is no doubt that the Paris Agreement was a major milestone in establishing the framework for tackling climate change, by setting the global goal of limiting global warming to less than 2°C and moving to a net zero emissions economy by the second half of the century. But we should not lose sight of the fact that 2°C warming still involves substantial change for our infrastructure, our economy and our communities. For investors, this means that the physical risk dimensions of climate change must be part of the risk assessment process, and that increasing investment into adaptation to ameliorate the effects of climate must accelerate. Given that climate change has been such a dominant topic in public debate for a number of years now, it is perhaps surprising that relatively little work has focused on the practical aspects of adaptation, particularly on how to finance it. Where this work has taken place, it is predominantly focused on public finance, while the hard yards of increasing private sector investment into adaptation is only now beginning. This report looks explicitly at how to increase investment into adaptation. Developed through a multi-stakeholder climate adaptation finance consultation process, it aims to identify real world investment barriers and recommend potential solutions, with the goal of enabling the finance sector to access adaptation investment opportunities. It also sets out a pathway ahead with specific recommendations that IGCC will be taking forward. Comments of participants in this process are included throughout the report. Throughout this guide, we have sought to identify practical examples of investment models currently being applied or with the potential to be adopted to meet the challenges to adaptation investment identified through this consultation process. By looking at what works today, we are better able to identify solutions for scaling up investment