Engaging the private sector in financing adaptation to climate change: learning from practice

This paper draws on the experience of the Action on Climate Today (ACT) programme as well as global literature on engaging with the private sector to finance adaptation. It outlines projects undertaken in India and Nepal to identify lessons learnt and key enablers with regard to private sector engagement in adaptation.

The rationale for engaging with the private sector is two-fold: on the one hand, the private sector can support governments facing constrained public budgets and rising costs of managing climate change to achieve global climate resilience by leveraging the ingenuity, skills and financial resources of businesses and the larger financial sector. On the other hand, the private sector itself is gradually becoming aware of the physical risks and opportunities arising from a changing climate, and there is nascent awareness of the measures it can take to assess and disclose risk and maintain the profitability of its businesses. 

This paper presents a framework for identifying key enabling factors for the private sector to invest in climate change adaptation. This framework offers a comprehensive approach to thinking about how policy-makers, practitioners and donors can engage the private sector in adaptation, including drivers, barriers and enablers.