Climate-resilient finance and investment

This paper aims to contribute to the process of defining, measuring and – ultimately – increasing the proportion of finance flows that are aligned with climate resilience. This paper is intended to contribute to discussions in this area and does not prejudge the outcome of negotiations on related topics under the UNFCCC framework.

This paper focusses on alignment in OECD and emerging economies, noting the unique challenges faced for financing adaptation in least developed countries and Small Island developing states. It proposes the following principles for climate resilience aligned finance:

• Physical risk management: the physical risks from climate change (such as drought or heatwaves) should be identified and managed based on forward-looking analysis and considering the intersection of hazard, exposure and vulnerability
• Do No Significant Harm: the management of risks should be done in a way that does not increase the risk faced by others (e.g. by increasing downstream flood risk or damaging biodiversity) 
• Alignment with adaptation strategies and objectives: the investment should be consistent with relevant adaptation plans or strategies, such as NAPs