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  • At the 2nd annual Finance for Adaptation Technologies & Solutions Roundtable (FASTR) held during London Climate Action Week 2020, investors and other stakeholders agree that climate adaptation and resilience is a real opportunity
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At the 2nd annual Finance for Adaptation Technologies & Solutions Roundtable (FASTR) held during London Climate Action Week 2020, investors and other stakeholders agree that climate adaptation and resilience is a real opportunity

Source(s):  United Nations Development Programme (UNDP)

Private sector engagement and investment in climate adaptation continue to move into the mainstream, and leading public and private stakeholders outline new and existing financings, projects, studies, risk analysis, measurement methodologies, products, and other initiatives in climate adaptation to further accelerate adaptation investment.

The second annual Finance for Adaptation Technologies & Solutions Roundtable (FASTR) took place virtually during London Climate Action Week (LCAW) 1-3 July 2020. Co-convened by the Lightsmith GroupGlobal Adaptation and Resilience Investment (GARI) working group, COP26 Unit of the UK Cabinet OfficeWillis Towers Watson, the Coalition for Climate Resilient Investment (CCRI), Global Environment Facility (GEF), Macquarie’s Green Investment Group (GIG), Global Commission on Adaptation (GCA), World Resources Institute (WRI), Global Center on AdaptationUN Development Programme (UNDP), and UN Environment Programme Finance Initiative (UNEP FI), this event was designed as a platform to (i) elevate the discussion around the importance of scaling climate adaptation and resilience finance, (ii) showcase concrete technologies, products, and solutions that can address the climate risk problem, and (iii) explore investment strategies and instruments that can be used to directly support climate adaptation.

As a reprise to the first inaugural FASTR event held in 2019, this year’s roundtable sought to highlight progress made since last year’s event, and to sustain the momentum around finance for climate adaptation and resilience in the lead up to UNFCCC COP26 (postponed to November 2021). Given LCAW 2020’s virtual format this year in light of Covid-19, this year’s FASTR discussions took place via three webinar sessions across three days. Each session brought together leaders from across the public and private stakeholder spectrum to focus on a different piece of the finance for climate adaptation narrative: (1) contextualizing the adaptation finance gap, (2) providing examples of concrete solutions, and (3) discussing how investors can scale up those solutions and incorporate climate resilience into investment decision-making more broadly.

As Jay Koh, Co-Founder and Managing Director of the Lightsmith Group, highlighted in his introductory remarks, FASTR is “focused on finance – the idea that there is a need for funding and resources to support adaptation […] and focused on the future, on solutions and technologies” and is designed as a roundtable “where we’ve brought together some of the leading experts on the planet to share their perspectives – from the policy side, the company and entrepreneurial side, from the investor and funder-side – to really talk about this critical issue.”Against the backdrop of the Covid-19 crisis, the need to build resilience into our social and financial systems has become ever more clear.

As Dr. Barbara Buchner, Global Managing Director at Climate Policy Initiative, noted, “Covid-19 has exposed the fragilities of our economies and our vulnerabilities to future risk, including that of climate change. It has deepened existing inequalities and laid bare how our social and economic fate is inextricably linked to that of nature”.

Each session was kicked off by opening remarks from a leader in climate adaptation. Naoko Ishii, serving her final month as CEO of the Global Environment Facility, opened Session I: The Adaptation Gap, reflecting on eight years leading the GEF and the “journey of adaptation” how “we were able to break this myth that the private sector is not interested in adaptation”, citing the successful launch of Climate Resilience and Adaptation Finance & Technology Transfer Facility (CRAFT) at the end of 2019, with support from the GEF and the Nordic Development Fund. Ishii reiterated the need for “transformational impact”.

Emma Howard-Boyd, Chair of the UK Environment Agency and UK Commissioner for the GCA, kicked off Session II: Practical Solutions for Climate Adaptation echoed the need for transformation, and particularly in the context of the Covid-19 recovery, the need “to ‘build forward better’ and think about the future in everything we do.”

Finally, Session II: How to Invest in Climate Adaptation & Best Practices was opened by Jon Johnsen, CEO of PKA (the Danish pension fund with EUR45 million of assets under management), who showcased how for PKA, “it’s simply good business to mitigate climate risk in our portfolio” and underscored the immediate opportunities that exist today to invest in adaptation and resilience.Across the three panel discussions, some key themes emerged:

  • Importance of considering the most vulnerable communities in scaling climate adaptation and resilience solutions. Physical climate risks disproportionately impact underserved and vulnerable communities, and FASTR speakers underscored the importance for investments and other efforts in climate adaptation and resilience to consider those most at-risk and vulnerable. Saleemul Huq, Director of the International Centre for Climate Change and Development in Bangladesh, noted how less than 10% of public sector financing for adaptation is channeled towards the most vulnerable, and from the private sector that number is virtually zero. Technology can have a role to play. Cody Friesen, Founder and CEO of Zero Mass Water, a company that has developed the Source Hydropanel (a modular panel capable of renewably producing a local source of drinking water), noted that technology and innovation can help by not just improving upon existing systems, but by actually “leapfrogging into solutions that can improve peoples’ lives dramatically”.
  • While meaningful progress has been made, there is still a need to further bring climate adaptation and resilience into the mainstream decision-making. Consistent and harmonized standards, metrics, and frameworks are critical to scaling adaptation investment. To that end, initiatives such as the Adaptation Taxonomy being launched through the Adaptation SME Accelerator Program (ASAP) highlighted by Alfred Grünwaldt, Senior Climate Change Specialist at the Inter-American Development Bank, and the investor tools being spearheaded by the Coalition for Climate Resilient Investment (CCRI) will help to create the resilience investment frameworks necessary to translate “science to IRR”, as Carlos Sanchez, Director of Climate Resilience Investment at Willis Towers Watson concisely stated.
  • While the adaptation gap persists, real and investable opportunities exist today. The panel discussions highlighted the many initiatives and actions being led by various actors across the investment, policy, and entrepreneurial ecosystems to support climate adaptation and resilience. Session II showcased a variety of existing solutions – ranging from Four Twenty Seven’s intelligence platform for identifying and quantifying climate risk in financial assets to Agrosmart’s agricultural analytics tools for incorporating climate resilience across the food supply chain. The panel of investors in Session III spoke to concrete investments their respective institutions have made in adaptation, as well as their perspectives on how to further grow and accelerate the space.

The FASTR discussions made clear that action in climate adaptation and resilience is more urgent today than ever, and investors recognize that the opportunities to invest and scale transformative solutions in adaptation are here and now.Recordings of each of the three FASTR sessions are available at the links below:

  • FASTR Session I: The Adaptation Gap (View Recording)
  • FASTR Session II: Practical Solutions for Climate Adaptation (View Recording)
  • FASTR Session III: How to Invest in Climate Adaptation & Best Practices (View Recording– Password: 8z^Zr$!*)

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ABOUT THE LIGHTSMITH GROUP

The Lightsmith Group is an investment firm pursuing superior returns by investing in companies that address critical societal needs. Lightsmith invests in growth-stage companies providing technology-enabled business services and solutions in the areas of energy, water, food and agriculture, and climate resilience. Lightsmith won the Global Innovation Lab for Climate Finance competition in 2016 for its concept for the first climate adaptation and resilience private investment strategy and received the Lab’s formal endorsement in September 2017. For more information on The Lightsmith Group, please see: www.lightsmithgp.com.

ABOUT THE GLOBAL ADAPTATION & RESILIENCE INVESTMENT WORKING GROUP

The GARI working group is comprised of 200+ investors, government institutions, rating agencies, companies and entrepreneurs, asset owners, and investment managers to discuss the practical implications of the physical risks of climate change and the opportunities to support and invest in resilience. For more information on GARI, please see: www.garigroup.com.

ABOUT WILLIS TOWERS WATSON

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has more than 45,000 employees and services clients in more than 140 countries and territories. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at www.willistowerswatson.com.

ABOUT THE GLOBAL COMMISSION ON ADAPTATION

Global Center on Adaptation advances bold actions that help communities and countries become more resilient to climate-related threats. We build on, improve, and help deliver breakthrough solutions that accelerate transformation at scale and at speed. Learn more at www.gca.org.

ABOUT THE GLOBAL ENVIRONMENT FACILITY

The Global Environment Facility was established on the eve of the 1992 Rio Earth Summit to help tackle our planet’s most pressing environmental problems. Since then, the GEF has provided over $17.9 billion in grants and mobilized an additional $93.2 billion in co-financing for more than 4500 projects in 170 countries. Today, the GEF is an international partnership of 183 countries, international institutions, civil society organizations and the private sector that addresses global environmental issues. For more information on the GEF, please see: www.thegef.org.

ABOUT THE UN DEVELOPMENT PROGRAMME

UN Development Programme (UNDP) partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in nearly 170 countries and territories, we offer global perspective and local insight to help empower lives and build resilient nations. For more information, please visit www.undp.org.

ABOUT THE UN ENVIRONMENT PROGRAMME FINANCE INITIATIVE

United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. UNEP FI works with more than 300 members – banks, insurers, and investors – and over 100 supporting institutions – to help create a financial sector that serves people and planet while delivering positive impacts. We aim to inspire, inform and enable financial institutions to improve people’s quality of life without compromising that of future generations. By leveraging the UN’s role, UNEP FI accelerates sustainable finance. Learn more at www.unepfi.org.

ABOUT THE COP26 UNIT OF THE UK CABINET OFFICE

The Cabinet Office COP 26 Unit sits at the heart of the UK Government’s action on climate change and is directly involved in delivering and coordinating some of the most critical issues on the political agenda – both domestically and internationally. COP26 – the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change – is one of the Prime Minister’s top priorities. The Unit plays an essential role in delivering the summit in Glasgow in November 2021. Learn more at www.ukcop26.org.

ABOUT THE COALITION FOR CLIMATE RESILIENT INVESTMENT (CCRI)

Conceptualised by Willis Towers Watson, the World Economic Forum, the Global Commission on Adaptation and the Government of the United Kingdom, the Coalition for Climate Resilient Investment (CCRI) was launched at the UN General Assembly’s Climate Action Summit (UNCAS) in 2019, and represents the commitment of the global private financial industry, in partnership with key private and public institutions, to foster the more efficient integration of physical climate risks (PCRs) in investment decision-making. With 50+ members from across the public and private sectors globally, CCRI is mobilising resources, expertise and instruments to develop and pilot effective solutions that will drive a shift toward a more climate resilient economy for all countries, including the most vulnerable. For more on CCRI, see https://resilientinvestment.org/.

ABOUT THE GREEN INVESTMENT GROUP

Macquarie’s Green Investment Group (GIG) is a specialist in green infrastructure principal investment, project development and delivery, green impact advisory and the management of portfolio assets. Its track record, expertise and capability make it a global leader in green investment and development, dedicated to accelerating the green transition. Learn more at www.greeninvestmentgroup.com.

ABOUT THE WORLD RESOURCES INSTITUTE

WRI is a global research organization that spans more than 60 countries, with offices in the United StatesChinaIndiaBrazilIndonesia and more. Our more than 1,000 experts and staff work closely with leaders to turn big ideas into action to sustain our natural resources—the foundation of economic opportunity and human well-being. Our work focuses on seven critical issues at the intersection of environment and development: climateenergyfoodforestswatercities and the ocean. Learn more at www.wri.org.

ABOUT GLOBAL CENTER ON ADAPTATION

The Global Center on Adaptation (GCA) is an international organization which works as a solutions broker to accelerate action and support for adaptation solutions, from the international to the local, in partnership with the public and private sector, to ensure we learn from each other and work together for a climate resilient future. Learn more at www.gca.org.



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  • Publication date 14 Jul 2020

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