The Resilient Futures Investment Roundtable was invited to hold a session at the National Adaptation Conference to share different perspectives on developing and implementing cross-sectoral partnership to invest in adaptation and resilience-building.
Setting the scene: The business of resilience
Before our session, the plenary session focussed on the business of resilience and how to overcome the adaptation finance gap.
We heard from Andrew Hall, CEO of the Insurance Council of Australia, who launched ‘Building Australia’s Resilience’, which includes policy recommendations for federal and state governments. Andrew reflected on the rising costs of disasters, and insurance sector’s role on the frontline of climate change and extreme weather. He spoke to the challenges of affordability and availability of insurance, and the critical role of reducing disaster risk.
We then heard from Russ Wise, who talked about the growing costs of disasters, as well as the suffering of people and nature. Investors are struggling to find investable projects in adaptation, disaster risk reduction and resilience, with only 7% of global climate finance in 2019-20 being spent on adaptation. Building a case for resilience investment requires coordination and collaboration across sectors.
Following these plenary discussions, our session included two presentations and a panel discussion. The presentations covered the approach of the Resilient Futures Investment Roundtable, and an overview of QRA’s pilot project to understand and quantify the broader economical, social and environmental value that betterment has had. The Resilient Futures Roundtable has completed a short case study on the cost-benefit analysis process used to demonstrate the value of investing in betterment. A more detailed case study on how this work has progressed will be released alongside guidance materials to support organisations make a the case for resilience investment in 2024.
Facilitator: Katie Vines, Climate-KIC
- Russ Wise, CSIRO
- Naomi Graham, IAG
- Kate Simmonds, Investor Group on Climate Change
- Rebecca Morris, Queensland Reconstruction Authority
- Melinda Morris, Climate-KIC
Over the last few years, we have seen climate impacts move from a hypothetical future problem to a reality. With severe disasters like the Australian bushfires, flooding in Pakistan and recent heatwave in Europe, the need to adapt to climate change has become clearer and more urgent. Our panel discussion brought together people working across different sectors to find ways to bridge the adaptation finance gap, and connect private and public funding to the projects on the ground that are supporting our communities, natural environment and economy to adapt to a changing climate.
To open the discussion, we asked the audience to break out into small groups and reflect on the role of their sector in adapting to climate change, and how we can encourage greater collaboration between different sectors.
Given the complex and interconnected nature of climate challenges, a transformative approach needs collaboration and partnerships between governments, businesses, civil society, and academia. These partnerships can leverage diverse expertise and resources to catalyse ideas into action.
We need to learn from experiences of both successes and failures, and share knowledge and expertise across sectors. We need to see adaptive management approaches that are funding ready and enable continuous learning, feedback loops and adjustments to strategies based on new knowledge and changing circumstances.
To deal with the complex challenges we are facing, we need different ways of thinking, doing and collaborating. We need to move outside of silos that exist in sectors and even within organisations, and move towards greater collaboration. Bringing in more perspective allows us to improve problem solving and better understand when, where and how to invest in resilience and adaptation.
There was interest in the room about how to connect private sector investment to local adaptation and resilience-building projects. This was particularly from representatives from local councils, who are on the frontlines of responding and adapting to climate change, but face challenges in accessing funding for this work.
The panel reflected on the findings shared from the Resilient Investment Vehicle, which found that there are two key barriers to bringing private investment to resilience:
- The best adaptation happens locally, but small-scale, local projects are difficult to aggregate to a size of investment suitable for institutional investors.
- Adaptation and resilience projects often lack a clear, low risk revenue stream that is driven by measurable outcomes.
Overcoming these barriers is complicated, and is going to require a step change in the way that private sector defines value in the context of revenue-generating investments. It also requires a change in the way that governments and local councils approach project design – such as thinking early about how to design projects that are attractive to investor, and working with organisations with connections to communities to identify similar projects that could be bundled together to create an investment opportunity at a scale that attractive to the private sector.
Many people working in local governments and alongside communities expressed their frustration in the difficulty in accessing funding, particularly from the private sector. The panel noted the legal obligations for investors, banks and insurers to make investment decisions that are likely to generate a return on investment. For example, many large-scale investors are superannuation funds who have an obligation to clients to protect their superannuation and generate a reason return.
Creating opportunities for investors and those seeking private funding to collaborate and work together is key, which is where the Resilient Futures Investment Roundtable comes in.