Bridging the gap in disaster risk financing through integrating physical and financial resilience: Disaster and climate adaptation financing framework

This report highlights international experiences and offers a practical framework through Disaster and Climate Adaptation Financing Framework for bridging the persistent divide between physical and financial resilience. It responds to a central disaster risk challenge: financial instruments are too often developed in silos, disconnected from the physical risk reduction measures they are meant to enable.

To operationalize this integrated, environment-enabled approach, DCAFF recommends the following:

• Leverage advanced analytics for smarter, evidence-based decision-making. Tools like CBAs and Unbreakable should be employed to ensure investments are data-driven, targeted, and aligned with both risk reduction and financial resilience goals. Analytics better inform what is built and how it is financed.
• Strengthen policies and institutions for effective delivery. Robust policy and regulatory frameworks, updated building codes, and empowered institutions are prerequisites for meaningful resilience. Strong governance structures enable financial instruments and technical interventions to reinforce one another, delivering lasting structural and fiscal benefits.
• Mobilize the private sector as a co-creator of resilience. Financial resilience must extend beyond public financing. Private sector actors such as banks, insurers, and construction firms are essential partners in designing, financing, and implementing scalable solutions. Their engagement must be deliberate, strategic, and integrated into broader resilience plans.
• Design cost-efficient, scalable, and flexible technical solutions. Interventions must be practical, tailored to the context, and structured for long-term sustainability. This means adapting interventions to local market conditions and ensuring that resilience-building efforts do not impose excessive financial burdens on governments or communities.
• Increase uptake through strategic communication and outreach. The success of resilience-building interventions depends on demand from stakeholders. Strategic communication is essential to educating and raising awareness about available financial products and technical solutions.