Climate Finance

The pressing need for financing climate resilience/adaptation is widely acknowledged. Estimates converge on a consensus that the global funding shortfall for adaptation in both built and natural environments is expected to reach between $300 billion and $500 billion annually by 2030. This need is particularly evident against the backdrop of soaring national debts worldwide, rendering public sector financing alone unsustainable. Currently, only approximately $50 billion/year is allocated worldwide for adaptation; While multilateral development banks can offer financial assistance, many countries are hesitant to take on additional debt burdens.
The primary reason adaptation finance comprises only 7% of total climate finance is the lack of a clear method to provide investors with a rate of return on their investments in addressing this shortfall. There is compelling evidence that investing in adaptation yields substantial benefits. Harvard Business Journal’s Climate Alpha research indicates that early investments in climate-resilient regions could generate over 70% higher returns on real estate portfolios by 2030. This includes land acquisition, affordable housing construction, and adjusted premiums to facilitate orderly climate-induced migrations, with an estimated 600 million people beingt displaced by 2030.
However, realizing this profit potential has been challenging because, until now, there was no scientifically valid methodology to measure the reduction in economic, and if desired, social and societal damage from disasters. The International Sustainable Resilience Center, Inc. (ISRC), based in the US, has a tool that provides a scientifically-based approach that provides financial and social/societal returns from investments that increase resilience. The Disaster Impact ToolkitTM provides an accurate estimate of the reduction in losses from these investments. For more information, click here.

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