16/04/24

GREEN FINANCE: Standard Chartered, KPMG, and UNDRR aim to boost climate adaptation funding ahead of COP29

As published on: fintech.global, Tuesday 16 April, 2024. 

Standard Chartered, KPMG, and the United Nations Office for Disaster Risk Reduction (UNDRR) are urging for a significant increase in the mobilisation of funds for adaptation and resilience, especially in emerging markets, ahead of COP29.

This call to action coincides with the launch of a groundbreaking roadmap by Standard Chartered, KPMG, and UNDRR aimed at catalysing and aligning efforts across sectors to address the substantial financing gap in adaptation and resilience, according to ESG News.

The newly introduced Guide for Adaptation and Resilience Finance, developed in collaboration with more than twenty leading financial institutions, Multilateral Development Banks (MDBs), and NGOs, including the African Development Bank and the United Nations Environment Programme Finance Initiative, serves as a practical resource for investors, commercial banks, and other financial institutions by:

Establishing a common reference for adaptation and resilience, alongside a comprehensive list of financeable themes and activities, thus creating a classification framework.
Streamlining the decision-making process for financing adaptation and resilience through principles and guidance derived from the latest best practices and frameworks.
Identifying priority investments and their co-benefits, such as emissions reductions and nature protection and conservation, in addition to adaptation and resilience benefits.
The Guide encompasses over 100 investable activities across adaptation and resilience, including climate-resilient crops, vertical farming, natural flood protection, water conservation and efficiency measures, public hospital infrastructure investment, renewable energy storage solutions, and mangrove conservation and replanting.

Recent UN analysis underscores the urgency of addressing climate impacts, with 2023 being recorded as the hottest year on record, accompanied by rising sea levels and an increase in the frequency and intensity of extreme weather events.

Economic losses from natural and climate-related disasters exceed USD 330 billion annually, highlighting the dire need for action.

Despite the pressing need, less than 10% of climate finance is currently allocated to adaptation, exacerbating the global financing gap. Current funding levels fall significantly short of the estimated USD 212 billion per year needed through 2030 in developing countries alone.

Marisa Drew, Chief Sustainability Officer, Standard Chartered, said: “Finance and investment for adaptation and resilience needs to rapidly scale to address a critical shortfall amid rising demand. We need to embed adaptation and resilience into financial decision-making, to ensure we understand and manage the financial risks and recognise the potential of adaptation and resilience as investable asset classes. The Guide will help offer confidence to investors looking to allocate capital to adaptation and resilience projects, helping to advance sector-wide understanding and drive the critical step-change we need to see in capital mobilisation for this crucial area of sustainable finance.”

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KPMG United Nations COP29 Climate finance ESG