As climate change intensifies, physical climate risks are increasingly affecting businesses, infrastructure and communities, with direct implications for banks and their clients. Extreme weather events and longer-term changes in climate patterns can disrupt operations, damage assets, reduce revenues and affect borrowers’ ability to repay loans.
A new report explores why financing adaptation and resilience is both a risk management imperative and a commercial opportunity for banks.
Moving from guidance towards practical applications in banking products, credit decisions and client engagement, it examines how banks can assess physical climate risks, identify eligible adaptation and resilience activities, integrate resilience considerations into existing lending processes and develop financing strategies that support clients in responding to climate impacts.
By embedding climate resilience into mainstream banking practices, financial institutions can better manage physical risks, support their clients’ long-term resilience and help mobilize finance for a more climate-resilient economy.
Related: UNEP FI’s 2025 Practical Guidance on Implementing Adaptation and Resilience for Banks