A new report by the Taskforce on Net Zero Policy, launched during Climate Week NYC, explores the policies needed to ensure climate resilience is integrated into economic policy.
The report, Resilience: From Definition to Delivery, examines how governments, businesses and investors can respond to climate-related challenges by connecting risk assessments with investment decisions, financial regulation, corporate planning and capital allocation.
As it notes, while awareness of physical climate risks has increased, the policies and financial mechanisms for funding remain fragmented, with businesses not translating their assessments of physical risks into capital allocation or investment.
‘Resilience can no longer be treated simply as an environmental concern or an emergency response after disaster strikes,’ it notes. ‘Instead, resilience must become a central consideration in economic policy, financial regulation, corporate planning and capital allocation.’
Policy tools
The report identifies four policy complementary policy tools that governments and regulators should use together, as part of a proactive climate investment and risk management strategy:
- Disclosure, to make physical risks, environmental dependencies and financial impacts visible;
- Taxonomies, to identify credible resilience activities and guard against maladaptation;
- Transition planning, to translate risk assessments into corporate action and capital allocation; and
- National strategies, to turn resilience priorities into costed, coordinated and financeable programmes.
As the report notes, these tools provide a policy framework to enable companies to strengthen resilience across their operations and value chains, and encourage investors to finance projects that build resilience in the wider economy.
‘No longer distant risks’
“Wildfires, floods, drought and extreme heat are no longer distant risks,” commented Helena Viñes Fiestas, co-chair of the Taskforce on Net Zero Policy. “They are disrupting businesses, damaging infrastructure and placing growing pressure on communities and public finances.
“Recognition of the problem is not enough. Businesses cannot become resilient in isolation. Their prosperity depends on functioning infrastructure, healthy ecosystems and secure supply chains. As such, governments must create the conditions for companies and financial institutions to invest in resilience before disaster strikes, rather than relying on recovery spending after the damage is done.”
The road to COP31
Looking ahead to COP31, which takes place in Antalya in November, the report calls on policymakers to build accessible public climate-risk information and data systems and connect climate, nature, water and social considerations within corporate disclosure.
It also calls for greater connection between resilience taxonomies and financial instruments, increased efforts to integrate resilience objectives and expenditure into corporate and sector transition plans, and for national adaptation strategies to be developed into costed implementation programmes.
“The tools already exist,” Fiestas added. “The challenge is implementing and deploying them efficiently. This briefing provides a practical roadmap for bringing them together and moving resilience from definition to delivery.” Read more here.
