climate change adaptationA major programme of investment is needed to meet the UK’s climate adaptation

climate change adaptation

Working towards net zero

Looking at climate change adaptation the Climate Change Committee (CCC) recently published a new report titled Investment for a well-adapted UK, through which it argues that ‘a lack of leadership is preventing essential investment to prepare the UK for climate change.’

It highlights that, in common with work towards net zero, a major programme of investment is needed to meet the UK’s climate change adaptation needs, but unlike net zero the government has not defined its priorities.

The report, therefore, sets out new analysis of the UK’s adaptation investment priorities and several recommendations, including:

> The refresh of the Green Finance Strategy in 2023, together with Third National Adaptation Plan (NAP3), should clarify where the government expects adaptation actions to be funded through public sources and where private investment is expected.

> The update to the Green Finance Strategy in 2023 and NAP3 should set out steps to ensure that the UK Sustainability Disclosure Requirements initiatives (including the Green Taxonomy) are effective in improving the understanding of carbon adaptation investment needs, directing finance towards adaptation, and ensuring that regulators and auditors have the necessary expertise to monitor the quality of reporting and provide incentives for organisations to report on their adaptation actions.

> The need for investment in adapting to climate change should be included within mandates/strategic priorities for all relevant industry regulators and implementing agencies through resilience standards aligned to national-level objectives.

> The Office for Budget Responsibility should undertake a full review of how the impacts of climate change in the UK will affect the UK’s macroeconomic performance and public finances, building on the analysis in their 2021 Fiscal Risks Report.

> The UK should build on the work of the Transition Plan Taskforce to define common standards for what high-quality adaptation plans should look like.

> Financial regulators should provide directional guidance for financial institutions to measure physical climate risk and their contribution to climate adaptation (and maladaptation) outcomes across portfolios and loan books.

> UK Public financial institutions (such as the UK Infrastructure Bank, British Business Bank, UK Export Finance, and British International Investment) should create adaptation finance strategies and launch new sustainability-linked instruments tied to adaptation outcomes

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