The latest developments in the sustainability space.

DBS and Climate Bonds Initiative (CBI)
Amid a growing need to address physical climate risks, Singapore-headquartered DBS Bank and Climate Bonds Initiative (CBI) have published a new report which aims to identify pathways for mobilising climate resilience finance throughout Asia-Pacific.

The report entitled – Adaptation and Resilience: Exploring Investable Opportunities in Asia-Pacific – represents a first step towards advancing climate adaptation financing by deepening knowledge and capability in Adaptation & Resilience (A&R) financing as the financial impact of climate change becomes more material.

The firm highlighted that annual costs associated with physical climate risks for companies with significant operations in Asia are projected to reach $336 billion by the 2030s. Globally, less than 10 per cent of climate finance flows support A&R and less than 11 per cent of that comes from the private sector. The gap between financing need and financing flow is large and concentrated: Asia accounts for about 69 per cent of global adaptation financing needs and 75 per cent of the global financing gap by 2030. Against this backdrop, banks and businesses are looking for practical guidance on what constitutes a credible climate resilience investment and how this can be assessed.

The report explores how rising temperatures, water stress, extreme weather events and flooding impact businesses and infrastructure in the real economy, starting with four sectors:

-- Commercial real estate in India: Addressing heat stress impacting operating costs and asset valuation.

-- Data centres in Singapore and Malaysia: Tackling water stress as a material constraint on operations and expansion.

-- Power infrastructure in coastal China: Building resilience against typhoon and storm damage to transmission and distribution networks.

-- Transport corridors in Taiwan: Mitigating recurring damage to transport infrastructure from typhoons and flooding.

In addition, the report highlights how emerging frameworks such as the Climate Bonds Resilience Taxonomy can help provide greater clarity to market participants.

“We believe the transition to a low-carbon economy must go hand-in-hand with adaptation – and finance can be a lever that accelerates both. As climate change increasingly shapes how businesses grow in the decades ahead, organisations need to better understand not only their exposure to climate risks, but also the investments required to strengthen resilience,” Kelvin Wong, chief sustainability officer, DBS, said. “This report marks an important step forward in helping us better support clients and scale adaptation solutions to support sustainable economic development across the region.”

“We’re already feeling the effects of climate change, with more intense heat, floods and weather patterns across Asia and around the world. But these aren’t just climate risks, they are financial risks. That’s why adaptation and resilience is moving from the margins into the core of banking strategy and risk management,” Sean Kidney, CEO of the Climate Bonds Initiative, added. “DBS’ leadership demonstrates that forward-looking financial institutions are beginning to address adaptation and resilience as a core business and risk management challenge. This report sends a strong signal that mainstream finance is ready to act to build the resilient societies, economies and businesses of the future.”