Adapting our infrastructure, cities, and behaviours to climate change is a long-term challenge. In London, the diffuse and complex threats across sectors and stakeholders make adaptation hard to fully grasp. Yet, tackling key issues like financing, tools, and attracting private investment alongside public funding is crucial.
This was the focus of yesterday’s roundtable at Imperial College London, led by Raffaele Della Croce, Co-Director of the Singapore Green Finance Centre, and accompanied by expert panellists—Emma Howard Boyd CBE, Alexandre Chavarot, Julia Prescot CBE, Amal-Lee Amin, and the roundtable chair, Lara Williams.
Raffaele Della Croce presented the findings of his report, “Financing adaptation and resilience in London and the UK: Moving from Aspiration to Reality,” including its third section, which was specifically directed at local decision-makers and released during the event.
Key insights:
London’s climate hazards: Building on the findings of academic research and the London Climate Resilience Review (see our previous post), whose final report was published in July and led by Emma Howard Boyd, the review highlighted London’s exposure to multiple climate hazards, including droughts and floods. Vulnerable populations face the greatest risk, with Ms Boyd emphasising that adaptation is “non-negotiable.”
Escalating impacts: While some effects of these hazards are known, others remain uncertain, and the situation is expected to worsen. Economic losses could reach up to 5% of UK GDP, with reduced fiscal revenues and high social costs, regardless of the temperature rise trajectory (though the lower the rise, the better).
The financial challenge: The UK’s National Infrastructure Commission estimates that achieving net zero and increasing resilience will require £70–80 billion annually over the next decade, a 30% increase compared to the 2020s. The current adaptation approach is insufficient, hindered by an aging population, outdated infrastructure, and the need for new investments, such as water reservoirs.
Investment gaps: There is a significant gap in adaptation and resilience funding globally, particularly in the UK and London. Adaptation financing in London is fragmented across local authorities, overly reliant on public funding, and lags behind benchmarks like Copenhagen and Singapore. The market is small and not sufficiently “adaptation-friendly,” as investors view climate resilience as secondary to financial returns, with too much risk and uncertainty.
Proposed solutions:
Innovative financial instruments: Leverage tools like nature-based solutions, carbon markets, cooperative finance, crowdfunding, and government-backed green gilts (UK government bonds issued to fund environmentally beneficial projects) and green bonds (fixed-income securities aimed at financing projects with positive environmental outcomes) to mobilise more private capital.
Mobilising institutional investors: Use mechanisms like the UK Infrastructure Bank to bridge finance and risk gaps, encouraging blended finance models (public and private). The public sector must play a stronger role in de-risking investments to attract private players.
Co-benefits of adaptation finance: Highlight the additional outcomes of adaptation projects, such as improved biodiversity, better public health, and increased community resilience. These benefits enhance the overall value of adaptation efforts, making them more compelling to investors by showing the broader positive impacts beyond just financial returns.
Engaging local action: When asked how this report could guide local political action, Raffaele Della Croce emphasised the importance of collaboration. Academics, local actors, and authorities must work together to implement actionable recommendations.
He suggested engaging citizens at all levels and exploring new financial instruments, such as those trialled by Westminster council (crowdfunding), to fund local adaptation projects.
While much remains to be done, fostering local partnerships and involving communities could pave the way for rapid progress. We hope to see advancements at the GLA level and within boroughs on this front in the coming months. The ball is in their court!
