The investment opportunity for climate adaptation solutions could increase to US$9 trillion by 20501 with UNEP’s 2025 Adaptation Gap Report finding that the private sector has the potential to provide around US$50 billion per year in adaptation finance, if backed by policy action and blended finance solutions.

Climate adaptation, the process of adjusting to actual or anticipated climate effects, requires financial institutions to understand and manage physical climate risks, such as extreme weather events and sea-level rise, while also mobilizing capital to build resilience across economies and communities.

We work with the finance sector to scale finance for adaptation through the development of innovative financing solutions and supporting financial institutions in assessing and disclosing their physical climate risk in line with their commitments under the Principles for Responsible Banking and Principles for Sustainable Insurance, as well as through the products and services provided by UNEP FI’s online Risk Centre.

Developing countries need 12-14 times the current levels of adaptation financing2, but public budgets alone cannot bridge this gap. Private finance is essential to closing this shortfall and strengthening resilience across economies, sectors and communities – UNEP FI’s work connects public and private sector finance, helping to mobilize private capital for adaptation in emerging markets and developing economies.

 

Highlighting some of the engagement opportunities for financial institutions

 

Banks

The Principles for Responsible Banking provide dedicated learning and resources on climate adaptation for banks. By providing finance for the technologies, products and services that enable people, businesses and nature to adapt to a changing climate, banks play an important part in increasing the resilience of society and the economy. We work with our members to make it easier for banks to provide finance for adaptation and resilience outcomes, including through our 2025 Practical Guidance on Implementing Adaptation and Resilience for Banks.

Insurers

The Principles for Sustainable Insurance provide dedicated learning and resources on climate adaptation for insurers. Through the pricing and managing of risks insurers play an important role in scaling finance for adaptation and resilience. UNEP FI’s collaboration with the V20 group of climate vulnerable countries aims to create more climate resilient economies by supporting insurance and credit solutions for medium, small and micro enterprises through UNEP FI’s V20 Sustainable Insurance Facility.

Investors

Through the Adaptation & Resilience Investor Collaborative (ARIC), UNEP FI and development finance institutions (DFIs) are creating tools to expand concessional finance and mobilize private capital for adaptation in emerging markets and developing economies. The Investors Resilience Challenge has been developed through ARIC to make it easier for DFIs and private investors to work together for adaptation and resilience outcomes.

 

For more information about how to get involved, contact Paul Smith.

 

Enhancing the understanding of information flows relating to climate change adaptation

Open to all financial institutions, including commercial and central banks, insurers and development finance institutions, as well as businesses, communities and academia is the UNEP FI run community of practice on climate change adaptation impact measurement and information flows – supported by UNIDO. This community focuses on improving how climate adaptation data is understood, consolidated, and used, so financial institutions can make better-informed investment and financing decisions. 

 

Recent webinars and resources
Webinar | What counts as climate adaptation finance? Unlocking a multi-billion-dollar opportunity for financial institutions

This webinar introduces UNEP FI’s new Adaptation Finance Taxonomy Playbook, designed to support financial institutions in navigating these challenges. Join to gain practical guidance, explore real-world case studies, and discover tools that can help translate adaptation ambition into actionable financing strategies.

Publication | Adaptation Finance Taxonomy Playbook

This playbook translates existing taxonomy approaches and technical guidance into practical, decision-useful tools that financial institutions can apply in real-world settings. By clarifying definitions, offering step-by-step guidance, and illustrating application through case studies, the Playbook enables financial institutions to more effectively identify, assess and scale adaptation finance opportunities across jurisdictions.

Webinar | Financing climate adaptation and demonstrating its impact in Latin America and the Caribbean

This session examines how banks, insurers, development finance institutions, and investors operating across Latin America and the Caribbean can use the Adaptation and Resilience Impact Measurement Toolkit to help strengthen the business case for adaptation finance, improve transparency around adaptation outcomes, and support better decision-making.

Webinar | Turning climate adaptation investments into real-world impact in Africa and the Middle East

This session examines how banks, insurers, development finance institutions, and investors operating across Africa and the Middle East can use the Adaptation and Resilience Impact Measurement Toolkit to close the adaptation finance gap.

Toolkit | Adaptation and Resilience Impact Measurement Toolkit

The Adaptation and Resilience Impact Measurement Toolkit is available as both an excel file and a web app and downloaded alongside an explanatory word document. It provides sustainability, investment, impact and risk teams at financial institutions with a practical, credible framework for assessing, tracking, and reporting adaptation and resilience impact across their financing activities.

Webinar | Demonstrate the impact of climate adaptation and resilience investments: A new toolkit for banks, insurers and investors

Financial institutions increasingly recognize the urgency of investing in climate adaptation and resilience, but many still struggle to measure, track, and credibly demonstrate their impact. To address this challenge, UNEP FI is launching the Adaptation and Resilience Impact Measurement Toolkit.

For more information about how to get involved, contact Diana Diaz.

 

1World Economic Forum, Sizing the $9 trillion climate adaptation investment opportunity, 7 August 2025
2UNEP, Adaptation Gap Report 2025, 29 October 2025