The Network for Greening the Financial System (NGFS) published a technical paper setting out how adaptation and resilience can be integrated into climate transition plans, reframing transition plans from largely mitigation-focused documents into tools for managing physical climate risks and, where relevant, identifying adaptation-related opportunities. The paper adapts the five common pillars of transition plan frameworks to include adaptation considerations across governance, foundations, implementation strategy, engagement strategy, and metrics and targets. It argues that physical risks are intensifying even under a net-zero emissions scenario by 2050, citing NGFS scenario work indicating global GDP could be 8.5% lower by 2050 due to climate change, largely driven by chronic physical risks, and notes that adaptation remains underfunded with recorded finance flows in the tens of billions of dollars versus estimated needs in the hundreds of billions. The guidance proposes two core adaptation objectives for institutions, managing exposure and vulnerability to physical risks and, where appropriate, seizing adaptation-related business opportunities, and outlines response options including avoiding, accepting, reducing, and transferring or sharing risk. To address the lack of widely established adaptation metrics, it sets out a maturity pathway for metrics and targets starting with data and coverage stocktakes, moving to baseline exposure and vulnerability metrics, then input measures such as adaptation finance mobilised, and progressing toward output and outcome measures such as reduced repair costs or lower asset value exposed to acute and chronic physical risks. The NGFS positions the paper as an input to the G20 Sustainable Finance Working Group’s 2025 priority on scaling up adaptation finance and calls on policymakers, supervisors, financial and non-financial institutions, and academics to advance data, disclosure, and supervisory expectations that support more consistent integration of adaptation into transition planning.
Network for Greening the Financial System 2025-07-22
Network for Greening the Financial System publishes framework and metrics maturity model to embed adaptation in transition plans
The Network for Greening the Financial System published a paper advocating for integrating adaptation and resilience into climate transition plans, highlighting the need to manage physical climate risks and identify adaptation opportunities. It outlines adaptation objectives and response options, emphasizing developing metrics and targets to address underfunded adaptation efforts, serving as input for the G20 Sustainable Finance Working Group's 2025 priority on scaling up adaptation finance.