Global spending gap in climate resiliency

Published this week, the REF 2023 Synthesis Report brings to the forefront a growing concern in the world of climate action — the significant global spending shortfall in climate resiliency. With annual investments currently hovering below $50bn, we’re far from the annual commitment of $160bn to $340bn needed to ensure robust responses to the climate crisis on a global scale.

The rise of resiliency in climate conversations

As the climate discourse evolves, resiliency has emerged as a pivotal theme. The concept, which emphasises the need to bolster systems and infrastructure to weather climate-related disruptions, is anticipated to be a focal point at COP28 later this year, alongside the already pressing topics of adaptation and finance.

Supporting the findings of the REF 2023 Synthesis Report, SP Global‘s research titled ‘Crunch Time: Can Adaptation Finance Protect Against the Worst Impacts From Physical Climate Risks?’ published earlier this year underscores the escalating physical impacts of climate change. Furthermore, it warns that the golden window for implementing cost-effective resilience and adaptation measures is swiftly narrowing.

Their study references the United Nations Environment Programme (UNEP) Adaptation Gap Report from 2022. According to the UNEP’s report, yearly adaptation expenditures could surge to anywhere between $315 billion and $565 billion by 2050. What’s driving this urgency? The increasing awareness of imminent climate impacts, combined with emerging market incentives that prioritise resilience, is creating a wave that’s expected to accelerate the pace of change in the forthcoming years.

What this means for asset managers and stewardship professionals

The data is clear and the urgency is palpable. For asset managers and stewardship professionals, this signifies not only an opportunity but a duty. By channelling investments into initiatives that amplify climate resiliency, we can bridge the existing financial gap and fortify our global response to the climate crisis. The time for strategic, forward-looking action is now. As we edge closer to pivotal gatherings like COP28, the role of finance in driving and safeguarding climate resilience has never been more paramount.

 

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