The building blocks of a resilience market are starting to come into place, write Stephanie Pfeifer and Leslie Maasdorp
Last year, we warned that the storm was already gathering.
Since then, physical climate risks have continued to increase in severity and frequency, eroding asset values, disrupting supply chains and putting pressure on sovereign balance sheets.
But another shift is now underway: markets are beginning to respond.
For the first time, climate adaptation and resilience are moving beyond fragmented ideas and isolated projects into a more tangible response from markets and the financial system that is starting to price risk, value resilience and mobilise capital accordingly.
The case for common resilience frameworks
A long-standing barrier to scaling adaptation finance has been the lack of a shared language across investors and other actors in the wider investment chain, such as insurers and lenders. Without consistent ways to define and assess resilience, metrics and incentives remain fragmented and capital finds it harder to flow at scale.
The Investors Resilience Challenge is helping to close this gap by turning work on physical climate risk and adaptation metrics into practical criteria that investors can apply across transactions, portfolios and strategies.
Developed as a collaborative effort between development finance institutions and private investors, and now supported by a growing coalition of signatories, the IRC reflects a deliberate move away from fragmented, institution-specific approaches towards a more common approach.
It creates a basis for identifying adaptation opportunities, engaging partners and assessing the benefits of adaptation and resilience investment. That matters because common criteria can help mobilise private capital at scale.
Bridging the financial case
Even with clearer definitions, the core challenge remains translating resilience into metrics that drive investment decisions.
The IRC builds on existing investor tools and methodologies, including IIGCC's Physical Climate Risk Appraisal Methodology (PCRAM) and Climate Resilience Investment Framework (CRIF), which help investors apply common criteria and test resilience-building measures in practice.
In PCRAM case studies, including the ferry and port example in East Africa, the methodology has helped investors assess disruption risk and map the value of adaptation measures.
At British International Investment, this is now a central focus. We are integrating the IRC within our existing investment decision making frameworks, to assess the financial performance of adaptation investments by linking resilience more directly to outcomes such as cost savings, revenue protection and asset value preservation.
This is already visible in BII's portfolio. In India, BII investments in Grow Indigo are supporting regenerative farming approaches that improve productivity, soil health and water efficiency, showing how adaptation can reinforce commercial performance.
Similarly, in Mozambique, BII-supported technical assistance to Companhia do Vanduzi is helping deploy solar-integrated farming systems that reduce energy costs while strengthening operational resilience.
These examples signal an important shift: climate resilience is becoming embedded within business models, not as a compliance exercise, but as a driver of financial resilience and long-term value.
A real-world test: Jamaica
The implications are even clearer at sovereign level, where climate resilience is also a question of fiscal resilience.
When Hurricane Melissa struck Jamaica in 2025, the country suffered significant damage. Unlike past crises, pre-arranged disaster financing – including a World Bank-supported catastrophe bond – was in place; the bond's parametric trigger activated automatically and provided a $150 million payout.
"Without consistent ways to define and assess resilience, metrics and incentives remain fragmented and capital finds it harder to flow at scale"
Rapid liquidity can mean the difference between an orderly recovery and a fiscal shock. Jamaica's carefully prepared disaster risk financing framework was recognised by markets, and the country's sovereign rating was upgraded by one credit rating agency. Jamaica's experience underscores how climate resilience can translate into financial resilience.
The lesson is clear: climate resilience does more than simply reduce physical losses. It also plays an important role in supporting fiscal stability, investor confidence and broader economic resilience.
From momentum to action
Taken together, these developments point to a decisive shift. The building blocks of a resilience market are starting to come into place: clearer frameworks, emerging financial tools and real-world evidence that proactive adaptation creates value.
The next phase should be about scaling that momentum.
This year, the Investors Resilience Challenge, building on existing tools like PCRAM and CRIF, can demonstrate what credible adaptation and resilience investment looks like in practice, while promoting greater consistency in how these considerations are embedded in investment decisions and financial processes.
London Climate Action Week is a useful moment to accelerate this shift. It brings together investors, governments and financial institutions to discuss how resilience can be scaled across markets. Within this, the London Resilience Finance Summit has become an important platform for aligning actors around practical next steps and mobilising finance for resilience.
The storm is already here.
The real question now is how investment in climate adaptation and resilience moves beyond fragmented responses towards a coherent approach integrated into the global financial system. We invite others across development finance, investment, corporate, insurance and banking to join the Investor Resilience Challenge and help build the system-wide approach that is needed.
Stephanie Pfeifer is Chief Executive of the Institutional Investors' Group on Climate Change (IIGCC).
Leslie Maasdorp is the Chief Executive of British International Investment, the UK's development finance institution.