Developing Investor-Relevant Metrics for Climate Adaptation and Resilience: The ARIC Framework

Title: UNEP FI’s ARIC Pioneers Development of Investor-Relevant Adaptation & Resilience Metrics

In a groundbreaking initiative to provide investors with better information on the positive impacts of investments on climate adaptation and resilience, the UNEP FI hosted Adaptation & Resilience Investors Collaborative (ARIC) has spearheaded the development of investor-relevant metrics over the past year. This work, done in consultation with a wide range of stakeholders, aims to set a practical framework for assessing adaptation and resilience impact across various investments.

The need for robust information on the impact of investments on adaptation and resilience is crucial in mobilizing private finance, especially with reported financing flows falling short of estimated needs by over USD 387 billion per year. Private investors are increasingly recognizing the opportunities in this space, with companies providing solutions for adaptation and resilience showing benefits up to 15 times greater than their costs.

ARIC’s adaptation and resilience impact framework is built on collaboration and consensus, drawing upon the direct experience of financing climate adaptation and resilience investments by its members. The framework provides practical recommendations based on first-hand investment experience, covering project finance, debt, and equity investments across different sectors.

Key elements of ARIC’s approach include defining the adaptation and resilience impact pathway, integrating impact assessment into the investment cycle, assessing impact across the Five Dimensions of Impact, and using clear and consistent metrics to facilitate impact assessment across portfolios.

The initiative aligns with other related efforts in the field, such as the GIIN’s Climate Adaptation and Resilience metrics and the Climate Bonds Resilience Taxonomy. Moving forward, ARIC aims to mainstream adaptation and resilience impact assessment across the finance sector, ensuring that investors can demonstrate the real-world impact of their financing in the face of intensifying climate change impacts.

With the potential to enhance the objectives of adaptation and resilience impact assessment across various financial operations, ARIC’s work signifies a significant step towards promoting sustainable investments that contribute to climate adaptation and resilience.

For more information, watch the recording of the webinar presenting ARIC’s framework for assessing climate adaptation and resilience impact.