Engaging the private sector in financing adaptation to climate change: Learning from practice

Virginie Fayolle, Caroline Fouvet, Vidya Soundarajan, Vandana Nath, Sunil Acharya, Naman Gupta and Luca Petrarulo
Created: 2/28/2019 -


The costs of adaptation to climate change in developing countries have been estimated to reach $70 - $100 billion per year between 2010 and 2050. Unlocking private finance can support public decision-makers facing constrained public budgets to achieve climate resilience by leveraging the ingenuity, skills, and financial resources of businesses and the larger financial sector. Moreover, the private sector itself is gradually becoming aware of the physical risks and opportunities arising from a changing climate.

There is a growing recognition of the need for the private sector to mainstream climate resilience across its activities but also re-direct financial flows to avoid climate-induced economic and financial shocks. The Action on Climate Today (ACT) programme has been working across South Asia to integrate climate change adaptation into development planning, and delivery. An important objective of ACT is to leverage finance for climate action. This learning brief focuses on the ways in which the private sector can be engaged to unlock finance for adaptation; highlighting the drivers, barriers and enablers that impact private sector participation. The ACT learning brief presents a framework of five approaches that policymakers, practitioners and donors can use to motivate the private sector to invest in climate change adaptation. The framework is illustrated with examples from ACT, highlighting the lessons learnt, and presenting key recommendations to mobilise private sector engagement and private finance in adaptation.