Closing the Resilience Financing Gap

We stand at a critical juncture in the fight against climate change, witnessing unprecedented global impacts that demand urgent action for our resilient future. The devastating toll of inaction is starkly evident in lives lost, livelihoods destroyed, and economies ravaged. Confronting these challenges calls for stronger collaboration and unwavering determination to accelerate a sustainable, equitable and resilient economic transition.


Addressing the Adaptation and Resilience Financing Gap

Despite the growing recognition for investment in climate adaptation and resilience, the current financial landscape falls short.

Emerging economies alone require annual adaptation investments of up to USD 387 billion, yet international finance flows lag significantly, leaving a staggering gap.

A variety of innovative financing tools will be necessary to comprehensively address the gap. The momentum behind sustainable debt instruments, including the issuance of over USD 4 trillion in green, social, and sustainable (GSS+) bonds to date, present an opportunity to scale up quickly and effectively. These instruments, already established and in demand, offer low-hanging fruit for immediate action.

However, much of the GSS+ market is directed towards mitigation, with adaptation and resilience representing only a small fraction of the investments.

A major reason for this is the lack of clarity on what constitutes a resilience investment and overcoming this hurdle is imperative to ensure funds flow effectively and to mitigate the risks of greenwashing.


Introducing Climate Bonds Resilience Taxonomy

In response, the Climate Bonds Initiative, with Cadlas as Technical Partner, is developing the Climate Bonds Resilience Taxonomy (CBRT). This initiative aims to establish a robust classification system for climate resilience investments to provide a consistent, transparent and systematic approach in defining and identifying adaptation and resilience investments.


Engaging stakeholders for progress

Convening leading resilience experts in the Resilience Taxonomy Advisory Group (RTAG), we recognise the vital role of diverse perspectives in shaping a taxonomy that is firmly grounded in science and evidence, comprehensive yet dynamic, clear and user-friendly, and adaptable to a wide array of contexts and needs.

Climate Bonds Initiative extends gratitude to these individuals for their support and collaboration, leading to greater harmonisation, alignment, and interoperability of mobilising finance for adaptation and resilience globally. We extend special acknowledgment to the Co-operators, a leading Canadian financial services co-operative, for their generous support of this initiative.

Collectively, these stakeholders share a unified vision to unlock finance for adaptation and resilience, addressing shared challenges with a cohesive purpose. Here are the individuals contributing to this initiative:

Key Milestones 

The RTAG will convene regularly to refine the CBRT and advance resilience definitions and concepts developed by Climate Bonds over the past 12 months. Some of these concepts were introduced last year and are described in our White Paper: Framework for Developing a Resilience Classification Framework Taxonomy, developed with support from UNDRR.

The next significant milestone, made possible through support from the co-operators and the upcoming work of the RTAG, is the anticipated launch of a Prototype CBRT in July 2024.

This prototype will feature a detailed catalogue of adaptation and resilience investments categorised under seven Resilience Themes:

  1. Resilient Agri-food Systems,
  2. Resilient Health,
  3. Resilient Infrastructure,
  4. Resilient Cities,
  5. Resilient Communities,
  6. Resilient Industry & Commerce, and
  7. Resilient Nature & Biodiversity.

Additionally, the CBRT Prototype will propose eligibility criteria for these investments, subject to further examination in the subsequent phase of taxonomy development. Alongside the CBRT, we will be publishing a guidance document outlining the overarching principles and methodology.


The Last Word 

The next chapter of the sustainable finance world is about to unfold, and climate resilience is poised to take the centre stage for the years to come. 

Follow our journey throughout the year and ensure you’re tuned in to the Climate Bonds Café podcast, as well as our socials where we will be sharing more about the resilience programme. 

To follow more on resilience resources click here.


‘Til next time,  
Climate Bonds