United Nations Environment Programme Finance Initiative calls for common definitions and impact metrics to expand adaptation finance

In an article first published in Net Zero Investor ahead of COP31, Eric Usher, head of the United Nations Environment Programme Finance Initiative (UNEP FI), called for common definitions, better impact measurement and greater cooperation between public and private finance to address the climate adaptation finance gap. The 2025 Adaptation Gap Report estimates that developing countries could need USD 365 billion annually by 2035, while international public adaptation finance flows to those countries totaled USD 26 billion in 2023. Adaptation needs vary across locations and sectors, making it difficult for financial institutions to identify and compare eligible investments. Benefits often take the form of avoided losses rather than direct revenue, leaving resilience measures undervalued in risk models, credit assessments and investment decisions. High upfront costs, uncertain timing of benefits and gains shared among multiple beneficiaries also make it difficult to capture returns through conventional private finance structures. Usher highlighted existing initiatives addressing these barriers. UNEP FI and its partners previously published an adaptation finance playbook to improve comparability across markets and access to concessional finance. The Investors Resilience Challenge, launched at COP30 in 2025 alongside 15 development finance institutions and finance industry groups, aims to help financial institutions identify eligible projects and measure their impact. A UNEP FI toolkit provides a framework for assessing, tracking and reporting resilience outcomes. Greater cooperation between public and private actors is also needed to reduce investment risks and bring projects to scale.