Analysis of climate adaptation in the finance sector (2020-2021)

Climate-proof Together

In order to make further progress on climate adaptation in the Netherlands, it is important to understand the initiatives that are currently underway in the field of climate risks and adaptation in the financial sector. We need a clearer insight into the field and a ‘shared language’ for banks, investors, and insurers and for the municipalities and water boards which financial institutions are working with because of where their assets are located. What instruments are financial institutions using to assess and improve the climate resilience of their investments and customers, and what options do they have when it comes to taking action?

Based on twenty interviews with various levels of government, financial institutions and umbrella organizations, as well as through desk research, NextGreen has created an overview of current developments. This was done together with Climate-proof Together (Samen Klimaatbestendig) and the Dutch Association of Investors for Sustainable Development (VBDO). We have also inventoried the next steps that the financial institutions can take and identified ways in which they could improve collaboration with the public sector. After all, both financial institutions and governments are targeting the same stakeholder groups in order to promote climate adaptation, including developers, property owners and companies.

The results of this analysis have been presented in the form of a visual story. Alongside the analysis of the current state of play, we also present a number of recommendations on how financial institutions and governments can align their activities better with respect to risk analysis, communication and financial incentives. Furthermore, we have added a glossary as a first step towards creating a shared language for the sector, which can improve the dialogue between financial institutions and the public sector. The results have been well received by the interviewees and form a good basis for a possible follow-up.

Goals

• Identify the challenges and opportunities with respect to climate adaptation initiatives in the finance sector
• Develop a common language and an action perspective towards developers, real estate owners and companies
• Create a coherent and widely accessible overview of initiatives: what is already happening, and what else is possible and necessary in the transition towards climate adaptation in the financial sector?
• Explore the need for a partnership on this topic and the opportunities for partnerships that exist

Role and activities of NextGreen

Assessment, interviews and desk research | Developing analysis and visual story | Exploring opportunities for partnership

Together with the Dutch Association of Investors for Sustainable Development (VBDO) and Climate Risk Services.