The past few years have made it clear that no region is immune to escalating climate shocks. Record-breaking heatwaves, catastrophic floods and prolonged droughts are displacing millions and reshaping economies.
Every year, around 20 million people are forced from their homes by floods, droughts and extreme heat. According to the UN, the least developed countries are now 10% poorer than they would have been without climate change, and extreme weather has erased $525bn in growth across the most vulnerable emerging and developing economies over the past two decades.
Number of people forced from their homes each year because of flooding
Globally, over the past decade, climate-related disasters have inflicted more than $2trn in economic damages, including $45bn in losses over just the past two years. These figures underscore a stark reality: the cost of inaction is rapidly outpacing the cost of preparing for what lies ahead.
Without urgent intervention, global GDP could fall by up to 23% by 2050.
Yet the financial response remains dangerously inadequate. COP27 and COP28 began to elevate adaptation and loss and damage as core priorities, but delivery has fallen short. COP27 established a dedicated Loss and Damage Fund, and COP28 operationalised it, with initial pledges of several hundred million dollars.
While symbolically significant, these contributions remain minuscule compared to the billions required annually to address irreversible climate losses already affecting developing nations.
According to UNEP’s Adaptation Gap Report 2025, adaptation finance needs in developing countries by 2035 are at least 12 times as much as current international public adaptation finance flows. The report estimates the costs of adaptation finance needed in developing countries at $310bn to $365bn per year in 2035. Actual flows sit at $26bn in 2023.
If current finance trends continue, the Glasgow Climate Pact goal of doubling international public adaptation finance from 2019 levels by 2025, which would be approximately $40bn, will not be achieved.
In the Biennial Transparency Reports (BTRs) – which nations submit under the Paris Agreement to outline their progress in meeting climate pledges – 59% of countries report at least one instance of integrating adaptation into non-climate plans or strategies.
Despite repeated pledges, funding for resilience still represents a small fraction of total climate finance—well below what is needed to safeguard lives, infrastructure and ecosystems.
The science paints an even more urgent picture. Studies suggest that ecological tipping points—from coral reef collapse to permafrost thaw—are being crossed faster than expected. This means the world’s ability to adapt is narrowing; the longer adaptation finance lags behind, the higher the long-term costs and risks become.
To date, adaptation finance has tended to focus on reactive measures, yet what is needed now is proactive investment in resilience. Priority areas include climate-proofing cities and infrastructure, scaling nature-based solutions for flood and drought management, improving water security, enhancing agricultural resilience and strengthening early-warning systems.
However, barriers persist—not only in finance but in institutional readiness. Many developing countries lack the technical and project-preparation capacity to access funds, while multilateral development banks continue to direct most resources toward mitigation rather than adaptation.
Private investment remains limited due to unclear returns and high perceived risk. Derisking tools, blended finance, resilience bonds and microinsurance can help close these gaps, but progress depends on stronger global coordination and accountability.
Looking ahead to COP30, the call is clear. Countries must scale up adaptation and loss and damage funding, agree on measurable finance targets, and reform financial institutions to channel capital toward resilience projects. Wealthier nations need to deliver on long-promised commitments, and multilateral lenders must adopt explicit adaptation mandates.
Businesses also have a critical role to play. From investing in resilient infrastructure and sustainable supply chains to integrating physical climate risk into decision-making, the private sector can help translate ambition into tangible action.
Innovative partnerships with governments and civil society can build pipelines of viable, bankable projects that deliver resilience benefits at scale.