Climate impacts cause immense human suffering – and they have major consequences for businesses and financial institutions and markets. Investing in climate adaptation can help bolster countries, people, and economies against the shock of climate change.
Floods, droughts, heatwaves, and extreme storms are damaging assets, disrupting supply chains, reducing productivity, and threatening worker wellbeing and safety.
Nevertheless, with wars being fought and pandemics being tackled, the natural catastrophes often take a back seat and struggle to make it onto the global political and public agenda.
Risks not evenly distributed
Several regions in Africa are at risk of approaching habitability limits, while compounding crises cause acute food insecurities driven by escalating fuel costs and supply shortages.
In 2022 DanChurchAid released the report ‘Private Investments in Adaptation’ that highlighted that that some 500 million smallholder farmers, their families, and communities, who contribute over 30% of global food production, are among the most affected.
The impacts of climate change in vulnerable countries amplify the ramifications of existing inequities and related crises.
Adaptation to climate change is urgent
Climate adaptation at scale is imperative to take on the crisis. It is a crucial strategy to minimize loss and damage from climate change impacts on livelihoods, while building resilience in the long run.
When done with zeal and ambition adaptation can generate significant opportunities for productivity, economic benefits, employment, and poverty reduction, thus contributing to stable economies in the long term.
Adaptation to climate change is urgently needed to reduce the negative impact of more unpredictable weather on people, businesses, and assets.
What is climate adaptation?
Climate change adaptation is the process of adjusting to current or expected effects of climate change. For humans, adaptation aims to moderate or avoid harm, and exploit opportunities; for natural systems, humans may intervene to help the adjustment.
Adaptation is especially important in developing countries since they bear the brunt of the effects of climate change. Human adaptive capacity is unevenly distributed across different regions and populations, and developing countries generally have less capacity to adapt. Adaptive capacity is closely linked to social and economic development.
The need for private investments
In 2023 funding was 11.4 billion US dollars for Africa – more than half of that money comes from multilateral development finance institutions. It is estimated that the need is almost four times bigger – and it is therefore vital that other sources of funding are needed.
Given the scale of the challenge, successful adaptation and resilience efforts will also need the meaningful engagement of, and investments from, the private sector.