Strengthening Financial Systems for Climate Adaptation

As climate-related shocks become more frequent, communities need access to finance that helps them cope with and recover from damage and loss, yet current efforts to strengthen financial systems’ resilience often overlook the importance of inclusion. This Working Paper presents governments and development funders with an overview of the role of inclusive finance in enabling investments in climate adaptation and resilience.

It also introduces a diagnostic process to identify market gaps and opportunities, and identifies three key roles that governments and development funders can play in strengthening financial systems to respond to their customers' climate adaptation and resilience needs based on risk severity and customer vulnerability.