Financial risks of climate change
Companies, governments, banks, insurers and investors face financial risks due to climate change. Such risks include the consequences of rising sea levels, more frequent extreme weather, greater water discharge through the rivers, severe drought and soil subsidence. The business community, the financial sector and the government are therefore considering how to adapt the economy to climate change. In the coming decades, this will involve extensive investment in infrastructure, economic sectors and the physical design of the Netherlands.
Working Group on Climate Adaptation
The new Working Group on Climate Adaptation will investigate how best to contribute through investment and finance to adapting our economy to climate change. The working group will be looking at scenarios, methods and data needed by the financial sector to assess the physical impact of climate change on the economy and will identify finance and insurance solutions. Examples include particular forms of insurance, risk sharing, guarantees and public-private partnerships, which also create opportunities for a greener, more pleasant and above all future-proof living environment.
Climate-proofing investment
Several industry organisations have already set up partnerships on physical climate-related risks. Their current activities are also described in the illustrated document Nederland klimaatbestendiger maken: Welke rol spelen financiële instellingen? (Climate-proofing the Netherlands: What role do financial institutions play?, produced by Samen Klimaatbestendig (Climate-proofing Together). Banks, insurers, real estate investors and the government will join forces in this working group.
Knowledge exchange and research
The working group will exchange knowledge in the field of climate adaptation about such aspects as scenario analyses, methods and data. It will also identify sector-wide opportunities for public-private adaptation finance and indicate how current bottlenecks can be overcome. The working group is expected to report on its findings by the end of 2023. It also seeks to explore joint activities and aims to reach out to Dutch central and local authorities to explore collaboration opportunities.