To facilitate investment in climate resilience through capital markets

DESIGNING A CLIMATE RESILIENCE
CLASSIFICATION FRAMEWORKTO FACILITATE INVESTMENT
IN CLIMATE RESILIENCE
THROUGH CAPITAL MARKETS

1Designing a climate resilience classification framework

Disclaimer
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Citation: UNDRR (2023). Designing a climate resilience classification framework. To facilitate investment in climate resiliencethrough capital markets. UNDRR: Geneva, Switzerland.
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Acknowledgements
UNDRR would like to acknowledge its major core donors for their support; Sweden, Japan, Norway, Switzerland and Finland.

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To facilitate investment in climate resilience through capital markets

DESIGNING A CLIMATERESILIENCE CLASSIFICATIONFRAMEWORKTO FACILITATE INVESTMENT IN CLIMATERESILIENCE THROUGH CAPITAL MARKETS

iii
3

Designing a climate resilience classification framework

TABLE OF CONTENTS
Acknowledgements

01

2

Introduction and purpose

6

A Context and objectives
B Financing needs for climate resilience
C Purpose of this white paper
D Evidence-based definition of climate resilience
E Complementarity with existing guidance		
F
Literature review of relevant material		
		

8
9
11
12
14
15

02

Investment eligibility

16

A

18
18
20
21
21
23
23
24
25
26
29

B

C

Framework scopeMeasures, assets, activities, entities
Adapted and enabling investments
Definition of eligible investments
Key principle 1: Substantial Contribution to climate resilience
Key principle 2: Avoiding maladaptation and significant harm to sustainability objectives
Eligibility categories
Automatically eligible (white list)
Standardized checks
Further assessment
Proxies for determining eligibility under the framework

03

Climate resilience themes

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To facilitate investment in climate resilience through capital markets

04

Population of the climate resilience framework

38

A
B

40
41

Framework structure as seen by external users
Additional information for TWGs and RTAG

05

Next steps in cthe development of the climate resilience framework

42

A

46
46
49
49

B

Proposed role of the RTAG:								Prioritization of climate resilience themes
Inputs to the TWGs
Proposed role of the TWGs

AnnexesAnnex I				
Annex II		
Annex III		
Annex IV		Annex V		
Annex VI

50
Climate resilience framework proposed structure: illustration using the 			‘resilient infrastructure’ theme
Terms of reference for the resilience technical advisory group (RTAG)
Other relevant resilience-related taxonomies
Application of the Framework across different sustainable 				financing instruments
Information sources used in the literature review
Evidence base for the identification of framework climate resilience themes


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Designing a climate resilience classification framework

01
INTRODUCTION ANDPURPOSE6

To facilitate investment in climate resilience through capital markets

7@Unsplash/andreas-gucklhorn

Designing a climate resilience classification framework

A.

CONTEXT AND OBJECTIVES

beyond the kinds of process-based and compliancedriven approaches that have hitherto been used todefine climate resilience (or adaptation) financing. To
achieve this, it will provide an evidence-based approachthat enables issuers, investors and other stakeholders
to identify climate resilience investments, assets andentities and to facilitate the flow of capital towards
them.

This white paper presents a blueprint for thedevelopment of a climate resilience classification
framework (hereafter referred to as the climate
resilience framework or “the Framework”), with theprimary objective of promoting and facilitating the
much-needed investment in climate resilience throughcapital markets.

The Framework will present clear definitions andcriteria that both investors and issuers can employ tosystematically, consistently and transparently classify
climate resilience investments. The Framework will fulfil
this requirement by offering a classification system andscreening criteria for climate resilience investments
in various measures (e.g. a project), assets, activities
or entities, with the primary goal of promoting greater
capital flows towards climate resilience investments,
including those that contribute to disaster risk reduction.

According to the Sixth Assessment Report published by
the Intergovernmental Panel on Climate Change (IPCC),
approximately 3.3–3.6 billion people live in settings thatare highly vulnerable to climate change, as ecosystems
and people are becoming increasingly exposed to severe
climate hazards.1 The urgency of building resilience toclimate change impacts is also reflected in the Sendai
Framework for Disaster Risk Reduction,2 which calls for“the substantial reduction of disaster risk and losses
in lives, livelihoods and health and in the economic,
physical, social, cultural and environmental assets ofpersons, businesses, communities and countries”. At
the same time, markets and wider society are waking
up to the reality of a changing climate and to therealization that climate resilience is both an inevitable
and necessary priority.

The Framework will be broad and inclusive, reflecting thefact that climate resilience cuts across all sectors andactivities. This breadth will generate new opportunities
and innovation by shedding light on several sectors
less commonly associated with climate resilience butwhere the needs and investment opportunities related
to climate resilience may be significant, e.g. health,social protection and natural capital, among others. It
will also create space for new kinds of investments andinvestees, e.g. climate-vulnerable sovereigns that havesignificant climate resilience investment needs but facetight fiscal conditions and, in some cases, worsening
credit ratings due to climate risk exposure.

Urgent mechanisms and connections need to be built
to bridge the gap between high-level objectives andthe practical realities of directing capital flow towards
investments that will make economies and societies
more climate resilient. This requires recognizing andpursuing the considerable potential for investment
in climate resilience: US$ 1.8 trillion of investment inclimate resilience is needed up to 2030 alone, which
will result in an estimated US$ 7.1 trillion in economic
benefits.3

The Framework will provide an opportunity to showcase
the power of taxonomies – specifically, how systematicand granular approaches to defining credible climate
resilience investments can help convert good intentions,such as making human health more climate resilient,
into specific, actionable and investable opportunities
that can generate measurable contributions to improved
climate resilience.

In this context, the Framework has the potential to
make a significant contribution to the advancement
and expansion of climate resilience financing. It will go

1
2
3

Intergovernmental Panel on Climate Change, Climate Change 2022: Impacts, Adaptation and Vulnerability (Cambridge and New York,
Cambridge University Press, 2022).
United Nations Office for Disaster Risk Reduction (UNDRR), Sendai Framework for Disaster Risk Reduction 2015-2030 (Cairo, 2015).
Global Commission on Adaptation, Adapt Now: A Global Call for Leadership on Climate Resilience, (Rotterdam, 2019).

8

To facilitate investment in climate resilience through capital markets

B.

Meeting the financing needs of this scale throughofficial development assistance flows, or even throughgovernment expenditures more broadly, will be
extremely difficult, especially given the fiscal pressuresthat many governments are currently under, particularlyin the developing world. Therefore, improving accessto capital markets for meeting these financing needs
must be prioritized.

FINANCING NEEDS FOR 		
CLIMATE RESILIENCEThe United Nations Environment Programme estimatesthat in developing countries alone, adaptation andclimate resilience financing needs amount to US$ 300
billion per year by 2030,4 while global adaptation andclimate resilience financing needs would be significantly
higher. However, current reported finance flows forclimate resilience are way below these estimatedneeds. Meanwhile, disaster risk reduction (DRR), which
is closely linked to climate change impacts, continues
to be underprioritized. For every US$ 100 spent on total
development aid between 2010 and 2018, as little as
47 cents were allocated for DRR.5

The sustainable bonds market has evolved into a major
vehicle for channelling finance from capital markets
into sustainable activities. By the end of 2022, morethan US$ 3.7 trillion of finance had been channelled
through green, social, sustainability, sustainabilitylinked and transition bonds. However, a February 2023
analysis carried out by the Market Intelligence Teamof the Climate Bonds Initiative (Climate Bonds) foundthat only a modest proportion of these capital flows
are currently targeting climate resilience.

In 2021, the Climate Policy Initiative found thatreported finance flows related to climate resilience(i.e. adaptation finance) were only US$ 46 billion peryear, out of total reported climate finance flows of US$
632 billion per year.6 Almost all adaptation financecomes from the international public sector, including
development finance institutions, while less than US$
1 billion comes from private finance sources.

Of the 33,849 green, social, sustainable, sustainabilitylinked and transition (GSS+) debt instruments recorded
by Climate Bonds at the end of 2022, 6,494 (19 percent) were identified as having some degree of climate
resilience-related use of proceeds (UoP). As figure 1
shows, most (around 80 per cent) of these originatedfrom developed markets, and smaller proportions fromemerging markets and supranational entities (e.g.
multilateral development banks).

FIGURE 1. Breakdown of GSS+ issuances with climate resilience UoP by market type
Supranational entities

8%

5
6

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Dev 80elo %pedNo legal AAQ Em 12%
S e
35%
ma rgirk neg

United Nations Environment Programme, Adaptation Gap Report 2021: The gathering storm – Adapting to climate change in a post-pandemic
world (Nairobi, 2021).
UNDRR, Global Assessment Report on Disaster Risk Reduction, (Cairo, 2019).
Barbara Buchner and others, Global Landscape of Climate Finance 2021 (San Francisco, Climate Policy Initiative, 2021).
9

Designing a climate resilience classification framework

As figure 2 shows, most of the developed market
issuances originated in North America (almost entirelyin the United States of America) with smaller proportions
originating in the Asia-Pacific and Europe regions.

Figure 3 shows that most of these issuances originatedfrom public sector entities (local governments andgovernment-backed entities), while a lower proportion
was issued by private sector entities (financial corporate
and non-financial corporates). Of the 145 different local
governments that issued thematic bonds with climate
resilience-related UoP since 2012, a large portion weremunicipalities or state authorities of the United States.

FIGURE 2. Breakdown of developed market GSS+
issuances with climate resilience UoP by region

FIGURE 3. Breakdown of GSS+ issuances withclimate resilience UoP by issuer type9%

Loc 39%
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To facilitate investment in climate resilience through capital markets

C.

•

PURPOSE OF THIS WHITEPAPER

An initial overview of how the Framework will
be populated with eligibility definitions andscreening criteria:ºThe purpose of this white paper is to provide proposals,
direction and scope on how to approach the developmentof the Framework based on literature review andleveraging Climate Bonds’ expertise on taxonomy-based
approaches for sustainable finance.
This white paper sets out proposals under each of the
below topics:••

Building on this white paper, the Framework’s finalization
will be guided and informed by a range of stakeholders
and partners who will consider the above topic andprovide feedback.

The context and rationale for the development of
the Framework
Parameters for defining the eligibility
investments under the Framework:

A partial example of how the Framework
structure has been populated (see annex I),
using one of the identified climate resilience
themes as an illustrative example. These
draw on an evidence base assembled
through a comprehensive literature review
of other taxonomies, classification systems
and technical guidance that are relevant toclimate resilience.

ofº

The range of use cases for the Framework,
i.e. the different types of investments that it isintended to screen.

ºAn approach for defining whether aninvestment makes a Substantial Contribution(to climate resilience as a key starting point
for defining eligibility under the Framework).

ºAn approach that encompasses i) a white
list of automatically eligible investments, ii)
investments that require standardized checks
to confirm eligibility and iii) investments that
require further assessment against screening
criteria in order to determine eligibility.7

This will include high-level consultation with fundersof this work programme, including the United Nations
Office for Disaster Risk Reduction (UNDRR), as well as
expert guidance and advice from a Resilience TechnicalAdvisory Group (RTAG),8 which will play an importantrole in steering the Framework’s development. In
addition, Technical Working Groups (TWGs) may beestablished in due course to work on the detailed
development of priority climate resilience themes.
The phasing of this work will be as follows:

•

8

•

Proposed thematic structure and priorities for the
Framework:

º

7

•

RTAG will review, use and build on the analysis andrecommendations contained in this white paper
to inform the development of the Framework
TWGs will be established, composed of suitably
qualified and experienced experts who will betasked with advising on eligibility definitions andthe development of specific screening criteria
where needed

Throughout this work, the recommendations andapproaches adopted by other relevant taxonomies,classification systems and other relevant technicalguidance will be brought into the Framework when it isdeemed that such approaches are compatible (including
sufficiently ambitious) and technically sound.

A set of proposed climate resilience themesthat set out the rationale for prioritizing
investment that builds climate resilience
across economies, societies and nature.

The terms “white list”, “standardized checks” and “further assessment” are working definitions only and may be revised and replaced as
required, as part of the further development of the Framework.
See Annex II for the Terms of Reference for the RTAG.

11

Designing a climate resilience classification framework

D.

EVIDENCE-BASEDDEFINITION OF CLIMATE 		RESILIENCE

For the purposes of the Framework, a more streamlined
definition of climate resilience is proposed: “the capacityof economic, social or ecological assets or systems
to resist, absorb, accommodate, adapt to, transformand recover from the current and projected impacts ofclimate change, both direct and indirect, maintaining
their basic structure and function”. Direct impacts
refer to the exposure to physical climate hazards suchas increasing heat stress or flood risk (including multihazard exposure), whereas indirect impacts refer to theeffects of climate-driven changes in natural or humansystems. This wording has the explicit intention of being
clearer and more understandable for the kinds of market
participants who are expected to use the Framework.
Although IPCC does not use the terminology of direct
and indirect impacts, its definitions have been used
to define proxies as set out in table 1. Direct impacts
are taken as the climate-impact drivers defined in the
Working Group I contribution to AR6,13 and indirect
impacts are taken as the “observed impacts of climatechange on ecosystems and on human systems” definedin the Working Group II contribution to AR6.14

The development of the Framework is based on
authoritative, evidence-based definitions of climatechange impacts and of appropriate responses to those
impacts. In particular, IPCC9 is the most prominent
source of comprehensive, authoritative and extensively
peer-reviewed evidence-based information on climatechange as well as its impacts and corresponding
responses. In the IPCC Sixth Assessment Report (AR6),10
resilience is defined as “the capacity of interconnectedsocial, economic and ecological systems to cope witha hazardous event, trend or disturbance, respondingor reorganizing in ways that maintain their essentialfunction, identity and structure”.11 UNDRR provides
another authoritative definition, which defines resilienceas “the ability of a system, community or society
exposed to hazards to resist, absorb, accommodate,adapt to, transform and recover from the effects of ahazard in a timely and efficient manner, including throughthe preservation and restoration of its essential basic
structures and functions through risk management”.12

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9
10
11
12
13
14

See: IPCC — Intergovernmental Panel on Climate Change.
IPCC’s AR6 cycle is still under way. The final Synthesis Report is expected to be released by early 2023.
J.B. Mathews and others, “Annex VII: Glossary”, in Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the
Sixth Assessment Report of the Intergovernmental Panel on Climate Change, V. Masson-Delmotte and others, eds. (Cambridge and New York,
Cambridge University Press, 2021).
UNDRR, “Resilience”, undated.
Intergovernmental Panel on Climate Change, Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth
Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge and New York, Cambridge University Press, 2021).
Intergovernmental Panel on Climate Change, Climate Change 2022: Impacts, Adaptation and Vulnerability.
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To facilitate investment in climate resilience through capital markets

TABLE 1. Standardized list of climate change impacts based on IPCC definitions

Direct/indirect

Category

Impacts

DirectHeat and cold

Mean surface temperature; extreme heat; cold spell; frost

Wet and dry

Mean precipitation; river flood; heavy precipitation and pluvial flood;
landslide; aridity; hydrological drought; agricultural and ecologicaldrought; fire weather

Wind

Mean wind speed; severe windstorm; tropical cyclone; sand anddust storm

Snow and ice

Snow, glacier and ice sheet; permafrost; lake, river and sea ice;heavy snowfall and ice storm; hail; snow avalanche

Other

Air pollution weather; atmospheric CO2 at surface; radiation at
surface

CoastalRelative sea level; coastal flood; coastal erosion; marine heatwave;
ocean acidity

Open ocean

Mean ocean temperature; marine heatwave; ocean acidity;
dissolved oxygen

Impacts on
ecosystems

Changes in terrestrial ecosystem structure; changes in freshwater
ecosystem structure; changes in ocean ecosystem structure;terrestrial species range shifts; freshwater species range shifts;
ocean species range shifts; changes in terrestrial phenology;changes in freshwater phenology; changes in ocean phenology

Impacts onhuman systems

Water scarcity; changes in agricultural crop production; animaland livestock health and productivity; fishery yields andaquaculture production; infectious diseases; heat, malnutritionand other health impacts; mental health; displacement; inland
flooding and associated damages; flood-/storm-induced damage
in coastal areas; damages to infrastructure; damages to key
economic sectors

Indirect13Designing a climate resilience classification frameworkE.

COMPLEMENTARITY WITH
EXISTING GUIDANCE
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It is also intended that the Framework can be applied
across a range of existing sustainable bond/sustainablefinance labels, as set out in annex IV.

16

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The Framework will not duplicate the process guidance(i.e. for issuers) that is already set out in these materials
but will instead complement them by translating theminto a classification system with associated criteria. This
Framework will also refer to and build on, as appropriate,
other relevant sustainable finance taxonomies, such as
the European Union (EU) Sustainable Finance Taxonomy(Adaptation), the ASAP Taxonomy, the United Kingdom
Green Taxonomy, the United Nations Development
Programme (UNDP) Sustainable Development Goals
Finance Taxonomy, the UNDRR IIED DRR and Climate
Change Adaptation Taxonomy for Public Budget Tagging
and the Sendai Framework for Disaster Risk Reduction(see annex III for further details).

15

DR

14

The Framework will draw on existing materials andguidance on climate resilience and green/sustainablebond markets. This includes the Climate Bonds Climate
Resilience Principles,15 which were launched in 2019
based on the work of an Adaptation and Resilience
Expert Group convened by Climate Bonds. This sets out
clear process guidance for integrating climate resilience
principles into thematic bond issuances. It will also
include guidance materials on green bonds and climate
resilience released in 2021 by Climate Bonds and the
Global Center on Adaptation, covering the “State of Playand Roadmap to Scale”16 and “A Guide for Issuers”,17which also covered the status and challenges of financefor climate resilience.

Climate Bonds, Climate Resilience Principles – A framework forassessing climate resilience investments (London, 2019).
Global Center on Adaptation, Green Bonds for Climate Resilience– State of Play and Roadmap to Scale (Rotterdam, 2021).
Global Center on Adaptation, Green Bonds for Climate Resilience– A Guide for Issuers (Rotterdam, 2021).

14

To facilitate investment in climate resilience through capital markets

F.

LITERATURE REVIEW OF RELEVANT MATERIAL
climate resilience investment types that are used forthe initial population of the Framework (e.g. as done inannex I). However, the literature review also revealeda paucity of information across the market on specificperformance thresholds related to climate resiliencein the context of investments. Of all the materials
reviewed, only a very small number provided specificinformation on such thresholds. This suggests that thework on setting such thresholds for climate resilience
investments, as part of the further development of
this Framework, is urgently needed and will make animportant contribution towards advancing practical
approaches for financing climate resilience.

A comprehensive literature review was carried out asa key part of the development of this white paper. This
covered a broad range of materials covering the climate
science basis, the policy context for sustainability andclimate action, existing definitions and taxonomies
for sustainable finance including climate resilience/
adaptation where available and an extensive range ofsector-specific climate resilience guidance materials.
These are summarized in annex V. The information
obtained from these materials was foundational for
confirming the basis for the Framework and ensuringthat it was grounded in best practices in the field ofsustainable finance and climate action. They werealso instrumental in defining many of the potential

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Designing a climate resilience classification framework

02
INVESTMENT ELIGIBILITY

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To facilitate investment in climate resilience through capital markets

17@Unsplash/American-public-power-association-FUeb2npsblQDesigning a climate resilience classification framework

to create or enhance the climate resilience benefits of
those assets and activities. The Framework also servesto assess the overall operation of assets and activities,
and ultimately the entities operating those assets
and activities, to determine whether they sufficiently
contribute to climate resilience outcomes at the asset/
activity/entity level and should thus be eligible forresilience-targeted financing. Therefore, in this white
paper, the term “investment” encompasses investments
in measures, assets, activities and entities, which aredefined in table 2.

This section of the white paper sets out the scope,
definitions and categories of investments that are eligible
under the Framework and which can therefore be included
in bond issuances and other financial instruments on
the grounds of climate resilience. This covers a broad
range of investment types encompassing measures,assets, activities and entities. The section defines core
criteria for determining investment eligibility in theform of i) Substantial Contribution to climate resilienceii) avoiding maladaptation and iii) avoiding significant
harm to other sustainability objectives. These in turn areused to categorize investments in terms of how theireligibility should be assessed. Eligible investments may
then be financed through a range of different financing
instruments, such as bonds and loans, as set out in annex
IV.

A.

The eligibility criteria under the Framework are defined at
the levels of measures and activities, as detailed in annex
I and illustrated in table 2:•

FRAMEWORK SCOPE•

Measures, assets, activities, entities
Table 2 outlines how the Framework is intended to apply
to a variety of types of investments.

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Entities may typically be evaluated based on theactivities undertaken. This presents a challengeof establishing and meaningfully aggregating anappropriate climate resilience outcome acrossthese activities while taking into account otheractivities of the entity that may have positive,
neutral or negative impacts on climate resilience.
It may thus be necessary in future phases of thiswork to provide suitable guidance on how to apply
the Framework criteria at the entity level.18

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This broad scope allows the Framework to serve various
functions at several scales. One of them is enabling thefinancing of additional climate resilience measures,
i.e. specific interventions within assets and activities,

Assets will often be the basis of activity levelassessments, so activity-focused criteria will
generally be expressed in a way that can beapplied to the overall activity or to the key asset
underpinning them.

18

This may be covered in RTAG’s scope of work, drawing on the cross-sectoral criteria for entities already developed by Climate Bonds for thecertification of corporate decarbonization transitions.
18

To facilitate investment in climate resilience through capital markets

TABLE 2. Investment types within the Framework scope
Investment
type

Definition

ExamplesUses of financing

Use cases

MeasureSpecific intervention
within an asset,
activity or entity overa defined period oftime that creates
substantial additional
resilience benefit orservices by the asset/
activity/entity themeasure is undertaken
withinThe installationof new equipment
within a production
facility or the
adoption of newtechnologies,
practices oroperationalchanges within
said facility

Costs of the measureassociated with
contributing towards a
climate resilience outcomethat could include capital
expenditures (CAPEX),
operating expenditures(OPEX), subsidies,
research & development(R&D), capacity-building,etc.

• Loans

Specific physicalasset, e.g.
infrastructure,equipment or someother physicalsubcomponent of anentity’s operations,that substantiallycontributes to climate
resilience

A production
facility, a farm, adesalination plant

Any cost associated withthe asset if it is overall
deemed to be contributing
to climate resilience of theasset, which could include
CAPEX, OPEX, subsidies,
R&D, capacity-building, etc• Loans

An activity19 delivering
goods or services
that substantiallycontribute to climate
resilience

Productionof crops,
production ofsteel, wastewater
management

Costs associated with
contributing towards
a climate resilience
outcome which could
include all the above(CAPEX, OPEX, etc.), and/or any costs associatedwith the activity if it as awhole contributes towards
a climate resilience
outcome• Loans

Costs associated with
contributing towards a
climate resilience outcomeby the entity which could
include all of the above(e.g. CAPEX, OPEX,etc.), and/or any costs
associated with the entity
if it as a whole contributes
towards a climate
resilience outcome• Sustainabilitylinked bonds

Asset

Activity

Entity19

An entity practising
activities and using
its assets to deliver
goods and services
that substantiallycontribute to climate
resilience

Business (i.e. areal economy
or non-financial
corporate),financial
institution,
subnational or
subsovereign (e.g.
municipality, city
authority or state),a sovereign• UoP bonds• Other targeteddebt• UoP bonds• Other targeteddebt• UoP bonds• Other targeteddebt• Sustainabilitylinked bonds• Generalpurpose debt
• Equity
investment• Other

Please note that an economic activity may be economic/paid for or it may not. This is because an activity might not be profitable at the activity
level given the system benefits that are not paid for.
19

Designing a climate resilience classification framework

Adapted and enabling investments

Table 3 provides some illustrations of the different kindsof adapted and enabling investments that may fall within
the scope of the Framework.

The scope of the Framework also encompasses adapted
investments and enabling investments:••

Adapted investments integrate measures to reducematerial physical climate risks to the asset, activity
or entity that is the subject of the investment
Enabling investments enable the climate resilienceof other assets, activities or entities

TABLE 3. Examples of the types of adapted and enabling investments that may be covered by the Framework

AdaptedMeasures

Asset

Activity

Entity• Upgrading
an irrigation
system to
improveefficiency andreduce water
losses• Acquiring a closed
loop water coolingsystem for installation
in a thermal power
station to reducewater consumption• Agri-value chain(high-value
perishable exportcrop) with cool
logistics & storage• Company withcorporate water
footprint targets to
reduce overall water
consumption by [X] %year-on-year• Upgrading local
health clinics
so that they canremain open
during extreme
heat episodes

Enabling• Launching a
new productline of weather
forecasting
equipment forsmall farmers• Integrating
desalinationequipment
facilities into
municipal watersupplies toensure service
continuity
during droughts• Installing passive
ventilation systems inbuildings to maintainhealthy interiortemperatures during
extreme heat episodes• Setting up an
additional weather
monitoring station bya state meteorologicalagency that provides
weather & climate
information to farmers
in a part of the country
not previously covered• Constructing coastal
defences to protect
communities,businesses andinfrastructure fromincreasing flood risk

20

• Telecoms services
that ensurecommunity
connectivity evenduring extreme
storms• Producing heattolerant roadsurfacing materials
that enable roadtransport tobecome more
resilient to extreme
heat events• Launching new
immunization
services to protect
populations from
infectious diseases
with wider vector
coverage due toshifting temperaturepatterns• City authority withcomprehensive flood
mitigation scheme
including naturebased solutions
and evacuation
centres for affected
communities• Company that
manufacturessmart agriculture
equipment thatminimizes water
demand in crop
production• State agency runninga catastrophe risk
pool mechanism thatprovides payouts tohouseholds affectedby extreme weather
events

To facilitate investment in climate resilience through capital markets

The adapted/enabling dichotomy is central to the EU
Sustainable Finance Taxonomy (Adaptation) that wasset out in EU legislation in 2021. It is similar, though
not identical, to the asset/system dichotomy set out
in the Climate Bonds Climate Resilience Principles in
2019,20 which define asset-focused and system-focusedinvestments as follows:

•

•

B.

The Framework will provide a common framework for
issuers, investors, market regulators, observers andpolicymakers to identify and/or develop measures,assets, activities and entities that make significant,consistent and verifiable contributions to climate
resilience.

Asset-focused investments: are intended tomaintain or enhance the climate resilience of anasset or activity to climate change, specifically toensure that the asset’s or activity’s performanceis fit for purpose over its design lifespan. In manycases, this will also contribute climate resilience
benefits to the system of which the asset or
activity is a part, depending on the type of productor service the asset or activity provides.

It will facilitate the strategic, top-down identificationand prioritization of high-impact climate resilience
investments leading to greater mobilization of
investment for climate resilience. To achieve this, it isimportant to establish clear definitions and screening
criteria for eligible investments under the Framework.
This may involve evaluating existing eligibility definitions(as presented in other taxonomies, standards, tools,etc.) where possible and the development of new ones
where necessary.

System-focused investments: are intended todeliver climate resilience benefits to the broader
system (i.e. going beyond merely ensuring an
asset’s or activity’s performance over its design
lifespan). To be effective, such an asset or
activity will also need to have a sufficient degreeof resilience to climate change.

Key principle 1: Substantial Contribution toclimate resilience

As the EU Sustainable Finance Taxonomy (Adaptation)
definitions are more recent and more widely recognizedacross the market, its terminology of adapted/enablingis used in this draft white paper. Nonetheless, in thecontext of this white paper, adapted investments may
be taken as relating more to asset-focused investments,and enabling investments as relating more to systemfocused investments.

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DEFINITION OF ELIGIBLE 		INVESTMENTS

To be eligible under the Framework, investments mustdeliver meaningful (or substantial) contributions towards
achieving climate resilience outcomes in response to
relevant climate change impacts. This is important for
ensuring that the Framework channels capital towards
investments that build climate resilience at the required
scale given the severity of projected climate change
impacts. A starting point for defining the eligibility of aninvestment is to test whether it delivers a Substantial
Contribution to climate resilience.

4

20

21

Climate Bonds, Climate Resilience
Principles – A framework forassessing climate resilience
investments.

Designing a climate resilience classification framework

Setting quantitative thresholds (where appropriate) for
Substantial Contributions to climate resilience will bea granular process that draws upon detailed technicalexpertise in specific sectors and subsectors, for example
through the work of TWGs. For that reason, this paper
does not attempt to set quantitative thresholds for
Substantial Contributions to climate resilience except incases where they have already been defined in credible
external references (see annex I). One such example is a
threshold of a 20 per cent reduction in water use against adefined baseline, which may be used in certain cases for
Substantial Contributions to climate resilience that relate
to water-use efficiency in a context of water scarcity.24

Building on the EU guidance on Substantial Contributions
to sustainability objectives,21 it can be said that a
Substantial Contribution to climate resilience (oradaptation) may be delivered through:i.

directly responding to climate change impacts(direct or indirect), e.g. coastal defences in
response to flood risks and immunization
programmes in response to climate-driven
infectionsii.

reducing pressures that exacerbate and/or are
exacerbated by climate change impacts (direct
or indirect), e.g. reducing water consumption in
response to increasing water stressiii.

enabling either of the two previous types (withrelevance for enabling investments)

In some cases, achieving a Substantial Contribution toclimate resilience will be an iterative process that involves
progressive improvements or pathways towards climate
resilience. The Framework should create incentives for
issuers to make progressive improvements in relation toclimate resilience, while also creating entry points for amore ambitious, transformational approach. Therefore,
if a Substantial Contribution to climate resilience isdefined in incremental terms, then the issuer should
also explain how this forms part of a more ambitious,transformational approach to building climate resilience.

The EU Sustainable Finance Taxonomy Regulation22
defines a Substantial Contribution to adaptation as i)a substantial reduction of the risk of adverse current/
future climate impacts or ii) a substantial reduction of
those adverse impacts, both without increasing the riskof an adverse impact on people, nature or assets.23
Substantial Contributions to climate resilience may be
defined in quantitative, qualitative or process-based terms,
including quantifiable thresholds, relative improvement,or they can be practice-based. In all cases the Substantial
Contribution should be sufficiently ambitious in terms of
the scale of the intended improvement (i.e. risk reduction,
impact reduction or climate resilience dividend).

For reasons of usability and practicality, the Framework
itself does not consider context-specific exposure toclimate change impacts or climate resilience needs aspart of determining a Substantial Contribution to climate
resilience. This is because the purpose of the Framework
is to provide a reference or filter against which potential
issuers can assess their investment pipeline and/or
portfolios to determine the eligibility of investments forinclusion in climate resilience-focused issuances. It
assumes that issuers will only have incentives to raise
capital for building climate resilience in investments thatthey judge to be exposed to climate change impacts. The
exposure of investments to climate change impacts andthe corresponding needs of climate resilience financing
should be determined by issuers using robust processbased guidance on climate change impacts assessment,
which should accompany the use of the Framework.

In practice, the definition of Substantial Contributions
to climate resilience will reflect the diverse and contextspecific nature of climate change impacts, of the affected
sectors, subsectors and of the wide range of potentiallyappropriate climate resilience responses. These will
have to be relevant and material for a given investment,
corresponding to investment-specific climate change
impacts. Therefore, there are no one-size-fits all
solutions for defining Substantial Contributions toclimate resilience across different sectors, subsectors
and investments.

21
22
23
24

These definitions draw upon guidance prepared by the European Commission in the context of the EU Sustainable Finance Taxonomy.
European Commission, Joint Research Centre, Substantial contribution to climate change mitigation – a framework to define technical screening
criteria for the EU taxonomy (Luxembourg, Publications Office of the European Union, 2021).
European Parliament and Council of the EU, “Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on theestablishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088”, Official Journal of the European
Union, vol. 63 (June 2020).
These reductions (e.g. in the risk of adverse impacts) could, for example, be measured in the form of a resilience dividend or benefit, e.g. thenumber of people with access to extreme weather shelters.
For example, as defined in the International Finance Corporation’s Blue Finance Guidelines. See https://www.ifc.org/wps/wcm/connect/
industry_ext_content/ifc_external_corporate_site/financial+institutions/resources/guidelines-for-blue-finance.
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To facilitate investment in climate resilience through capital markets

Key principle 2: Avoiding maladaptation andsignificant harm to sustainability objectives

In practice, the definition of eligible investments (including
the use of screening where appropriate) may requirebalancing the potential for a Substantial Contribution toclimate resilience with the possibility of maladaptation
and/or significant harm to other sustainability objectives.
Particularly to consider systemic risks, decisions of thiskind may take into account the principle of “net resiliencegain” as defined by UNDRR.26 Net resilience gain proposes
to assess the overall resilience gain or improvement at thesystem level even as there might be potential increased
risks of the investment in specific entities.

In addition to making a Substantial Contribution to climate
resilience, eligible investments under the Framework mustalso avoid contributing towards i) maladaptation and ii)
significant harm to other sustainability objectives. This
reflects the framework of Substantial Contribution and“do no significant harm” (DNSH) that is central to the EU
Sustainable Finance Taxonomy.
IPCC defines maladaptation as “… actions that may leadto increased risk of adverse climate-related outcomes,
including via increased greenhouse gas (GHG) emissions,increased or shifted vulnerability to climate change, moreinequitable outcomes, or diminished welfare, now or in the
future”.25 In the context of this Framework, maladaptationrefers especially to adverse impacts on the climate
vulnerability of other parties. This is an importantconsideration in evaluating the overall climate resilience
contribution of the investment, in that a Substantial
Contribution towards the climate resilience of one party
must not come at the cost of unacceptably increased
climate vulnerabilities for others.

C.

This white paper proposes three categories27 of eligibility
for investments under the Framework:•

In the same way, a Substantial Contribution to climate
resilience should not come at the cost of significant harm toother sustainability objectives, such as unacceptably highGHG emissions or unacceptable, severe environmental
impacts (e.g. habitat destruction) or social impacts (e.g.
increases in inequity).

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26
27

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ELIGIBILITY CATEGORIES••

17660362

Automatically eligible: a white list of investmentsthat are automatically eligible under the Framework,requiring no additional assessment
Standardized checks: investments that require
standardized checks to confirm eligibility under the
Framework
Further assessment: investments that must meet
specific screening criteria, through an investment
level assessment, in order to be eligible under the
Framework

Intergovernmental Panel on Climate Change, Climate Change 2022: Impacts, Adaptation and Vulnerability.
UNDRR, “’Net Resilience Gain’ concept proposed”, 5 November 2021.
The terms “automatically eligible (whitelist)”, “standardized checks” and “further assessment” are working definitions only that may berevised and replaced as required, as part of the further development of the Framework.
23

Designing a climate resilience classification framework

to build momentum and traction for channelling capital
flows towards investments that build climate resilience.
This will be a priority for the RTAG and in turn the TWGs.
However, climate change impacts are context specific,
as are Substantial Contributions to intended climate
resilience outcomes in response to those impacts.28
This means that an important boundary around the useof the white list is the definition of when context canbe disregarded so that investments are automatically
included in the white list.

Under each of these three categories, eligibility may be
determined by assessing the alignment with robust andauthoritative climate resilience assessment processes
or standards, as a proxy approach. As Climate Bonds
and its partners, including UNDRR, further develop the
Framework, work will be carried out to evaluate several
existing standards, processes, practices and tools fortheir alignment with the principles and approach of the
Framework. If determined to be aligned, they will be
included as pathways to demonstrating alignment with
the Framework.

The proposed key tests for inclusion on the white list arethat the investment (see table 4):••

Automatically eligible (white list)•

The further development of the Framework should aim,
as far as possible and appropriate, to maximize the role
and applicability of the white list, as this has the potential

makes a Substantial Contribution to climate
resilience across a broad range of contexts
does not have the potential for maladaptation inany context
does no significant harm to other sustainability
objectives in any context

TABLE 4. White list requirements
Test for inclusion inthis category

Guidance for implementing the test

Development ofrecommendations

Proposeduse

The investment makes a
Substantial Contribution
to climate resilience
across a broad range ofcontexts

There must be sufficiently robust
evidence demonstrating that theinvestment can deliver a Substantial
Contribution to climate resilience
regardless of the context

The investment does
not have the potential
for maladaptation in any
context

There must be sufficiently robust
evidence demonstrating that theinvestment entails no risk of unintended
adverse outcomes that may increase thevulnerability to climate change of any
potentially affected parties

Some example
interimrecommendations
are provided inannex I. These will
be reviewed by the
RTAG and updated/verified by TWGs indue course

These tests
will be usedin further
Framework
development
for populating
the white list

The investment does nosignificant harm to othersustainability objectives
in any context

There must be sufficiently robust
evidence demonstrating thatthe investment will not result inany significant increases in GHG
emissions and presents no significant
environmental or social risks to otherparties28

See the proposed definition of Substantial Contributions to resilience (Section 2).

24

To facilitate investment in climate resilience through capital markets

The standardized checks that will be carried out onthese investments will typically cover three themes,
depending on the investment:

Standardized checks
Investments that do not pass the above tests forinclusion on the white list may be considered for the“standardized checks” category. Investments in thiscategory make a Substantial Contribution to climate
resilience across a broad range of contexts but may
entail maladaptation and/or significant harm risks thatneed to be assessed and managed. The key tests forinclusion in this category are that the investment (seetable 5):•••makes a Substantial Contribution to climate
resilience across a broad range of contextsi.

Ensuring that the equipment and/or materials
used in the investment meet any specifictechnical specifications that are necessary fordelivering the Substantial Contribution to climate
resilience.

ii.

Ensuring that any environmental and/or social
risks associated with the investment have beenadequately addressed and managed so that, after
considering the increased risks, the investment
provides net resilience gains.

iii.

Ensuring that any increases in GHG emissions
have been minimized to the extent possible.

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does no significant harm to other sustainability
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Designing a climate resilience classification framework

TABLE 5. Standardized checks requirements

Test for inclusion inthis category

Guidance for implementing
the test

Development ofrecommendations

Proposed use

The investment makes a
Substantial Contribution
to climate resilience
across a broad range ofcontexts

Robust evidence must
demonstrate that theinvestment can deliver a
Substantial Contribution toclimate resilience regardless ofthe specific context

Annex I provides
some example interim
recommendations.
These will be reviewed
by the RTAG andupdated/verified by
TWGs in due course

These tests will
be used as part offurther Framework
development to identify
investments that
require standardized
checks only.

The investment does
not contribute tomaladaptation in thespecific context

A proportionate check must be
carried out at the investment
level to confirm that any
maladaptation risks are readily
assessable and manageable

Specific
recommendations to
be developed by the
RTAG

The investment does nosignificant harm to othersustainability objectives
in the specific context

A proportionate check must be
carried out at the investment
level to confirm that any risksof significant harm to othersustainability objectives
are readily assessable andmanageable

Specific
recommendations to
be developed by the
RTAG•

Further assessment
Investments that do not pass the tests for inclusion in
the standardized checks category will fall into the further
assessment category. These are investments that must
be assessed against screening criteria in order to confirm
eligibility. These screening criteria may be qualitative,
quantitative or process-based, and will be developed by
the TWGs using the guidance and definitions provided inthis white paper (see table 6). The screening criteria will
determine whether the investment:

•
•
•

26

These standardized
checks will focus oni) meeting technicalspecifications
needed to deliver
the Substantial
Contribution to climate
resilience, ii) managing
environmental & social
risks and iii) avoiding
or minimizing any
increases in GHG
emissions

makes a Substantial Contribution to climate
resilience in the specific context
does not contribute towards maladaptation
does no significant harm to other sustainability
objectives
does not contravene any relevant national or
local climate resilience/adaptation plans andstrategies

To facilitate investment in climate resilience through capital markets

TABLE 6. Further assessment requirements

Test forinclusion in thiscategory

Guidance for implementing the test

Development ofrecommendations

Proposed use

The investment
makes aSubstantial
Contribution toclimate resiliencein the specificcontext

An investment-level assessment, taking
into account the investment-specificcontext of climate change impacts, must
demonstrate the intended Substantial
Contribution to climate resilience (asdefined in this White Paper) will bedelivered by the investment

Screening criteria
to be developedby the TWGs using
guidance set out inthe final white paper
and provided by the
RTAG

The investment
does notcontribute towards
maladaptation

An investment-level assessment, taking
into account the investment-specificcontext of climate change impacts,
must demonstrate that any potential
unintended adverse outcomes on the
climate vulnerability of other parties
have been adequately assessed andaddressed so that any such adverse
outcomes are minimized. This may
include the application of industry/sector
best practices and guidance on climate
resilience

Screening criteria
to be set out
in Frameworkmaterials andused by issuers
when structuringissuance, using
the Climate Bonds
Climate Resilience
Principles asprocess guidance

The investment
does no significant
harm to othersustainability
objectives

An investment-level assessment must
demonstrate that i) any potential
significant increases in GHG emissions
have been assessed and measures
implemented to minimize them tonon-significant levels; ii) any potential
environmental/social risks have beenassessed through an Environmental& Social Impact Assessment
environmental/social audit or similar29
and any residual environmental/social
risks have been managed throughappropriate measures to guarantee net
resilient gains at the system level

29

These may be done in line with international practices such as the EU Environmental Impact Assessment (EIA) Directive, International FinanceCorporation Performance Standards, and Equator Principles.

27

Designing a climate resilience classification framework

Figure 4 provides an overview of this process in adecision tree format that illustrates how different typesof investments may fall into the above categories (i.e.
white list, standardized checks and further assessment).

FIGURE 4. Decision tree outline of Framework eligibility28

To facilitate investment in climate resilience through capital markets

Proxies for determining eligibility under the
Framework
Alternatively, the eligibility of investments under the
Framework may be determined based on the alignment
with approved robust and authoritative climate resilienceassessment frameworks or standards. In some cases, it
may be possible to use external, third-party certification
to confirm alignment. Some examples of the kinds ofexternal frameworks that may be used for this purpose
include the following (this is a partial and non exhaustive
list subject to review by an RTAG):

International Hydropower Association’s Climate
Resilience Guide (hydropower): a methodology for
identifying, assessing and managing climate risks toenhance the climate resilience of hydropower projects.

Principles for Resilient Infrastructure (infrastructure): The
principles have been developed in consultation with over
100 countries with the support of UNDRR. They set anunderstanding of what resilient infrastructure constitutes,
form the basis for the planning and implementation of
infrastructure projects that take resilience as a core value,
and assist the public and private sectors in making riskinformed policy and investment decisions.

Community Development Finance Initiative’s Resilience
Assessment Tool (multisector): a tool for identifying,evaluating and financing projects that have highresilience potential to improve the systemic resilienceof vulnerable communities.

The use of such proxies will be a critical strategy for the
speed and scale of the Framework’s impact. Evaluatinga wide range of other guiding frameworks against the
Framework creates potential for a large pipeline ofeligible investments to be uncovered and identified as
credible investments by investors.

SURE®
SURE Infrastructure Standard (infrastructure): a
third-party-verified, global voluntary standard for
integrating sustainability and resilience aspects into thedevelopment and upgrade of infrastructure.

The RTAG will develop a detailed process and criteria forevaluating proxies, and their alignment will be assessedby the TWGs.

Resilient Cities Network Tool (cities): a framework forassessing resilient infrastructure projects according to
key criteria for social and racial equity, the creation ofgreen jobs, and climate-readiness.

29

Designing a climate resilience classification framework

03
CLIMATE RESILIENCE THEMES

30

To facilitate investment in climate resilience through capital markets

31@Freepik/ 20187064

Designing a climate resilience classification framework•

This white paper proposes the Framework’s structure be
arranged around a set of climate resilience themes that
establish the sectors and subsectors where investments inclimate resilience are necessary.
This section details the climate resilience themes andprovides the basis for the Framework’s approach toqualifying specific investment types and establishingscreening criteria to confirm eligibility.

•

The subsequent sections of this white paper elaborateon these concepts. Section 4 provides a more extensive
overview of the proposed Framework structure.
In line with the evidence-based approach to the Framework’s
development, the identification of the climate resilience
themes is based on detailed, evidence-based analysis of
relevant, authoritative information sources including:

4693

18

AR6 analysis and recommendations on climatechange impacts, vulnerabilities and adaptation
priorities: this is a fundamental part of anevidence-based approach to identifying climate
resilience priorities.

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•

•

32

Sustainable Development Goals (SDGs) and climate
resilience priorities for ensuring progress towards
SDG achievement in the face of climate change
impacts: as SDGs provide an authoritative, widely
recognized framework for pursuing sustainable
development, the extent to which a climate
resilience theme contributes to SDG achievementin the face of climate change impacts is important.
The Sendai Framework for Disaster Risk Reduction
2015–2030 priorities for substantially reducing
disaster risk and losses in lives, livelihoods andhealth and in the economic, physical, social,
cultural and environmental assets of persons,businesses, communities and countries.
Nationally determined contributions (NDCs)
and country-level climate resilience priorities in
response to projected climate change impacts:
these provide important information on nationallyowned climate resilience priorities, which should
also be an important consideration in defining
climate resilience themes.

To facilitate investment in climate resilience through capital markets

Table 7 provides a summary of the analysis carried out on these information sources, with fuller details provided
in annex VI.

TABLE 7. Summary of the climate resilience themes or priorities identified in the key information sources
United Nations
Sustainable
Development
Solutions Network“Six Transformations”

UNDP SDG FinanceTaxonomy

World MeteorologicalOrganization (WMO)“Climate Indicators
and Sustainable
Development”

AR6 key impacts onnatural and humansystems• Sustainable food, land,
water and oceans• Food security• Food security• Ecosystems• Affordable housing• Agricultural and fishingyields• Food and water
security• Cultural heritage• Human health• Health• Urban settlements• Financial services• Livelihoods• Economic activity• Affordable basic
infrastructure• Displacement• Humanitarian crises• Sustainable cities andcommunities• Education, gender andinequality• Health, well-being, anddemography• Energy decarbonizationand sustainableindustry• Health• Education, technology
and culture• Conflict management• Soil & water• Tourism• Digital revolution
for sustainable
development• Built infrastructure

AR6 system transitions

Sharm-El-Sheikh
Adaptation Agenda

2022 NDC Synthesis
ReportSendai Framework for
Disaster Risk Reduction• Land and ocean
ecosystems• Food security andagriculture systems• Food production andnutrition security• Understanding disasterrisk• Urban andinfrastructure systems• Water and naturesystems• Urban areas and otherhuman habitats• Energy systems• Human settlement
systems• Human health• Strengthening disasterrisk governance tomanage disaster risk

• Cross-sectoral• Livelihoods and poverty• Ocean and coastal
systems• Freshwater resources• Terrestrial and wetland
ecosystems• Infrastructure systems• Ocean ecosystems• Coastal and low-lying
areas

33

• Investing in DRR for
resilience• Enhancing disaster
preparedness for
effective response, andto “Build Back Better” inrecovery, rehabilitation
and reconstruction

Designing a climate resilience classification framework

The high degree of commonality and agreement acrossthe external sources presented in table 7 leads to theidentification of seven proposed climate resilience
themes for the Framework. These are:Resilient Agrifood Systems

Resilient Industry & Commerce

Resilient Cities

Resilient Nature & Biodiversity

Resilient HealthResilient Societies

Table 8 presents proposed high-level goals for investmentsin each of the Climate Resilience Themes. Annex I,
which provides an illustrative breakdown of the Resilient
Infrastructure theme, details the more specific sectors
and subsectors within each climate resilience theme.
These sectors and subsectors in turn have their own,
more specific climate resilience outcomes. These climate
resilience outcomes correspond to specific climate change
impacts (see table 1) to which these investments may
be exposed, for example i) wastewater treatment more
resilient to flooding or ii) power generation more resilient
to water stress.

Resilient Infrastructure34

To facilitate investment in climate resilience through capital markets

TABLE 8. Proposed climate resilience themes

Theme

Scope

Climate resilience goal

Mapping against SDG/climate
resilience priorities

ResilientAgrifood
Systems

Systems for the
production andprovision of food andother related products,
encompassing primary
production, processing,logistics, storage,
wholesaling and retail,including the capacities
and knowledge ofpolicymakers, service
providers (public
and private) andpopulations

To ensure that agrifood
systems are resilient tothe current and projected
future impacts of climatechange, so that the provision,
availability and affordabilityof food and related products,
and food security, are notadversely affected by suchimpacts, and that thesebenefits are extended
to climate-vulnerable
populations• Sustainable Development
Solutions Network: Sustainable
food, land, water and oceans

Human settlements
whether large (e.g.
cities) or small (e.g.
villages), urban orrural, encompassingbuildings (residential,commercial & public),planning, development& management ofurban areas andsettlements, andcultural heritage30

To ensure that cities andother human settlements areresilient to the current andprojected impacts of climatechange, from the micro level(e.g. buildings) to the macrolevel (e.g. urban planning)
so that the health, safety,
security, livelihoods andeconomic potential of their
inhabitants is not adversely
affected by such impacts,
and that these benefits
are extended to climatevulnerable populations• Sustainable Development
Solutions Network: Sustainable
cities and communities

Resilient
Cities30• UNDP: Food security• WMO: Food security• Sharm-El-Sheikh: Food security
and agriculture systems• NDCs: Food production andnutrition security• UNDP SDG: Affordable housing• WMO: Cultural heritage• AR6: Urban and infrastructure
systems• Sharm-El-Sheikh: Human
settlement systems• NDCs: Urban areas and otherhuman habitats• Sendai Framework: Disasterrisk governance at the city level,
investment in disaster risk
prevention/reduction at the citylevel including “build back better”

This does not include water/wastewater, transportation, ICT or electricity infrastructure, which are instead covered under Resilient
Infrastructure.

35

Designing a climate resilience classification framework

Resilient
HealthResilientIndustry &Commerce

Resilient
Infrastructure

31

Systems, facilities,
services and capacities
for protecting andimproving humanhealth and forpre-empting andresponding to newhealth challenges
and health-related
emergencies, including
the capacities
and knowledge ofpolicymakers, service
providers (public
and private) andpopulations

To ensure that the adverse
impacts of climate change
on human health areminimized to the extent
possible, by ensuring thatthe provision of health-careservices and facilities isresilient to current and futureclimate change impacts andable to respond to emerging
human health priorities thatare driven by climate change
impacts issues,31 and thatthese benefits are extended
to climate-vulnerable
populations• Sustainable Development
Solutions Network: Health, wellbeing and demography

Industrial andcommercial operations
encompassing
extractive industries,
manufacturing
and service-basedindustries (e.g.
professional services,financial services,
tourism, leisure, etc.)

To ensure that industrial
and commercial operations
are resilient to the projected
and future impacts ofclimate change so that theireconomic output, operationalsafety, affordability of
products and services andthe provision of employment
are not adversely affected bysuch impacts• Sustainable Development
Solutions Network: Energy
decarbonization and sustainableindustry

Infrastructure thatprovides essential
services on which
populations andwider economic
activity depend, e.g.
water & wastewater,transportation,
information &communication
technology (ICT) andelectricity

To ensure that the provisionof essential infrastructureservices (water/wastewater,transportation, ICT andelectricity) is resilient to thecurrent and future impacts ofclimate change, so that thereliability, safety, access andaffordability of these services
are not adversely affectedby such impacts and thatthese benefits are extended
to climate-vulnerable
populations• UNDRR: Principles for Resilient
Infrastructure• UNDP SDG: Health• WMO: Health• NDCs: Human health• Sendai Framework: Healthsector governance, investment
and preparedness for disasterrisk prevention, reduction andresponses• WMO: Tourism• UNDP: Affordable basic
infrastructure• WMO: Built infrastructure• AR6: Urban and infrastructure
systems, energy systems• Sharm-El-Sheikh: Ocean andcoastal systems, infrastructure
systems• NDCs: Coastal & low-lying areas• Sendai Framework: Key roleof infrastructure governance,
investment and preparedness
for disaster risk prevention,
reduction and responses

This may include, for example, i) making health facilities (e.g. hospitals and clinics) more resilient to climate change impacts such as floods or
heatwaves, ii) introducing new or modified health services and treatments such as immunizations against diseases with altered vector ranges
due to climate change, and iii) training and capacity development for health sector professionals so that a wider range of climate-informed
health services can be provided. These definitions will be developed further through further Framework development.

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To facilitate investment in climate resilience through capital markets

Resilient
Nature &Biodiversity

ResilientSocieties

Terrestrial, freshwater,
coastal or marine
ecosystems andthe biodiversity they
support and the natural
capital and ecosystemservices (e.g.
freshwater provision,flood management,
oxygen replenishment,etc.) that they provide

To ensure that natural
ecosystems including theirintrinsic biodiversity, natural
capital, ecosystems services
and cultural significanceare not adversely affectedby current or future climatechange impacts

Systems and services
for ensuring social
well-being, safety andthe creation/protectionof social capital acrosspopulations, coveringsocial protection,
education, financial
inclusion, digital
inclusion, disaster risk
(DRR and emergency
services), and including
the capacities
and knowledge ofpolicymakers, service
providers (public
and private) andpopulations

To strengthen systems andservices for building societal
resilience to current andprojected future climatechange impacts and toensure that these systems
and services are themselves
climate resilient, so that
populations, communities,
households and individuals
are better prepared for andable to cope with climatechange impacts• Sustainable Development
Solutions Network: Sustainable
food, land, water and oceans• WMO: Soil & water• IPCC AR6: Land and ocean
ecosystems• Sharm-El-Sheikh: Water andnature systems, ocean andcoastal systems• NDCs: Freshwater resources,
terrestrial and wetland
ecosystems, ocean ecosystems• Sustainable Development
Solutions Network: Education,
gender and inequality• UNDP SDG: Education,technology & culture, financial
services• WMO: Livelihoods, displacement,
conflict management• NDCs: Livelihoods and poverty• Sendai Framework: Public
understanding and awarenessof disaster risk, plus governance,
investment and preparedness
for disaster risk prevention,
reduction and responses at thesocietal and community levels

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Designing a climate resilience classification framework

04
POPULATION OF THE CLIMATERESILIENCE FRAMEWORK

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36

A.

FRAMEWORK STRUCTURE
AS SEEN BY EXTERNAL 		USERS

The proposed Framework will provide clear criteria
for identifying and screening eligible investments,organized by sector and subsector under each climate
resilience theme to make it easier for users operating inspecific areas to navigate.
An example of this organizational structure can be seen
in table 9, which uses a partial example from the Resilient
Infrastructure theme’s water sector. Additionally, Climate
Bonds intends to create an interactive online tool thatallows end users to filter and search for investment
activities and their corresponding requirements.

TABLE 9. Illustration of the finalized Framework structure as seen by external users – partial example of Resilience
Infrastructure theme’s water sector

SectorSubsector

Investment

Climateresilience
outcomeConsiderations
for screening
criteria –climateresilience

Considerations
for screening
criteria –significant
harm

Water

Flood
management

Stormwater
warningsystems

Other sectors
more resilient
to flooding

n/a

n/a

Water storage

Groundwater
storage

Water supplies
more resilient
to waterstressFurther
assessment:

Standardized
checks:• Resilience ofother waterusers• Environmental
and social(E&S) impacts

Wastewater
treatment
more resilient
to flooding

Further
assessment:

Standardized
checks:• Flood risk
mapping• E&S impacts

Wastewater
treatment

Construction/
expansion/
operation/
upgrade ofwastewater
treatment
system• Resilient to [x]year flood• Resilience ofaffected parties40

To facilitate investment in@climate resilience through capital markets
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Transport infrastructure, covering land-basedtransport (roads) and waterborne transport(maritime and riverine)
Energy infrastructure, covering electricity
generation (thermal, hydropower, wind power)
and electricity transmission and distribution.

Annex I presents additional information that will informthe work of the RTAG and TWGs, but which will not appear
in the finalized, external version of the Framework.
This includes information on the following:B.

ADDITIONAL INFORMATIONFOR TWGS AND RTAG

i)

Whether each respective investment is an“activity” or a “measure” as outlined in section 2of this white paperii)

Whether each respective investment is “adapted”
or “enabling”

iii)

The proposed interim eligibility categoryof each investment (white list, standardized
checks or further assessment) pending further
recommendations by TWGs and based on:

However, to inform further Framework development, it isnecessary to provide additional information that will be
required by TWGs. This is an internal process that will
not feature in the external Framework materials as theone outlined above in table 9.
Annex I provides an illustration of how this may look, using
the Resilient Infrastructure climate resilience theme as an
example. As per table 8, the scope of Resilient Infrastructureis defined as infrastructure that provides essential services
on which populations and wider economic activity depend,
specifically covering the following sectors:32

•
•

32

Water infrastructure, covering water supplies,
water storage, wastewater treatment and flood
management
ICT infrastructure, covering telecoms, broadband
and other connectivity servicesºwhether the investment delivers theSubstantial
Contribution
toclimateresilience across a broad range of contextsºwhether the investment has the potential for
maladaptationºwhether the investment has the potential
for significant harm to other sustainability
objectives

iv)

The type of Substantial Contribution to climate
resilience, i.e. quantitative, qualitative or processbased, as explained in section 2 of this white
paper

v)

Considerations to be taken into account by TWGs
in the development of screening criteriavi)

External references (where available) that
substantiate the identification of the investment
as a (potential) climate resilience investment

Investments in all these sectors can be enabling as well as adapted if it can be demonstrated that the investment is making awider contribution towards systemic climate resilience, for example by building the climate resilience of other sectors/activities.

41

Designing a climate resilience classification framework

05
NEXT STEPS IN THE
DEVELOPMENT OF THE
CLIMATE RESILIENCE
FRAMEWORK42

To facilitate investment in climate resilience through capital markets

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Designing a climate resilience classification framework

ecological and financial systems. It will achieve this bycatalysing US$ 1.5 trillion within the thematic bondmarket to flow towards resilience investments by 2025
and by influencing the public sector in key geographies
to put in place policy and regulatory measures thatincentivize investments that enhance systemic andtransformative resilience.

This section sets out some of the key steps in the further
development of the Framework, focusing specifically on
the role of the RTAG and the TWGs but also providing thecontext of the broader programme of work that Climate
Bonds aims to implement with its partners, such as
UNDRR, subject to funding and resources.
In line with UNDRR objectives, the Climate Bonds Global
Resilience Programme aims to mobilize global capitalfor investments in climate resilience of physical, social,

The programme has three expected outcomes:

1

2

3

Investment opportunities
that build resilience are being
identified using common,
science-based standards anddefinitions

Credible resilience measures
are being financed at scale
through the sustainable debt
marketThe scale and speed of growthof resilience investments
are accelerated througha supportive policy andregulatory environment thatis underpinned by common
and credible definitions ofresilience investments

RTAG will be supported by the TWGs to work on thedetailed development of specific priority resilience.
TWGs will be focused on establishing eligibility criteria
as well as looking at proxy pathways for establishingeligibility through existing tools, certification schemes,
standards, etc.

The implementation of the programme will be guided andinformed by a range of stakeholders and collaborators
who will be convened through several working groups.
Implementation will involve high-level consultation withthis work programme’s funders through a Resilience
Programme Steering Group, including UNDRR, which willbe established to guide the overall programme strategy
and support its goals.

In addition to these more technically focused groups,
Climate Bonds intends to convene existing and potential
issuers of thematic instruments to finance climate
resilience-focused activities as well as an investorfocused group to ensure that the Framework is fit for
purpose for investors.

The RTAG will be convened to guide the next phaseof development of the Framework by building on thefoundation that this white paper has established. The

44

To facilitate investment in climate resilience through capital markets

The figure below depicts the envisioned structure for
implementing the Climate Bonds Global Resilience
Programme.

FIGURE 5. Global Resilience Programme working groups

45Designing a climate resilience classification framework

A. PROPOSED ROLE OF THE RTAG

the mobilization of capital flows will result in clear
benefits in terms of building climate resilience. Key
considerations in this prioritization process will include:

The RTAG will play an important role in reviewing therecommendations for the Framework set out in this white
paper and in providing strategic advice on the further
development of the Framework. The RTAG will also review
the concepts and terms used throughout this white
paper and any subsequent related work to ensure thatthe concepts and terminology used are understandable
and appropriate for the intended audiences and users.
This will also include considering how the Frameworksits in relation to other relevant frameworks such as the
EU Sustainable Finance Taxonomy (Adaptation) andothers, including the justification for any divergences. It
is anticipated that the RTAG will advise on the following
specific issues. The terms of reference for the RTAG are
included in annex II.

Prioritization of climate resilience themes
The RTAG will advise on the prioritization of the climate
resilience themes for further development by TWGs.
This should reflect the greatest and most urgent needs
for advancing the development of the Framework andfor scaling up capital flows for climate resilience. Thisprioritization should be clear, understandable to themarket, reflect market interest (i.e. investors, issuers
and other users of the Framework), and identify where

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i)

Urgency/importance – How urgent are the climate
vulnerabilities that affect each climate resilience
theme, and how pressing is the correspondingcase for building climate resilience?

ii)

Markets/capital flows – What is the current stateof play concerning capital market engagement
and capital flows across each climate resilience
theme? Are capital markets already aware/
engaged, or is such activity still nascent?

iii)

Opportunities – What are the opportunities formarket engagement and action across eachclimate resilience theme? Are there existing
channels and instruments that could be leveraged
to scale up climate resilience financing?

iv)

Political interest – What kind of political interest
and/or imperative is there for each climate
resilience theme? Which themes are of interest/
urgency for governments and policymakers?

Table 10 sets out a comparison table in which these
considerations are briefly explored for each of the
proposed climate resilience themes. This information
may be useful to the RTAG in forming recommendations
on the prioritization of climate resilience themes andon their sequencing in further Framework development
including TWGs.

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TABLE 10. Initial comparison table for the prioritization of the climate resilience themes
Climateresilience
theme

UrgencyMarkets/capital
flows33

Opportunities

Political

ResilientAgrifood
Systems

Climate change
impacts on foodproduction andfood security
are pressing
concerns, with
impacts alreadybeing felt in many
parts of the world

Some capital flows
through green/sustainable bonds,
although presumably
not mainly for climate
resilience – US$
99 billion for “landuse” (2006–2022).
Some evidence ofincreasing flows throughsustainability-linked
instruments such assustainability-linked
loans

Agrifood is a fertile
area for public andprivate investment,
including throughi) government
initiatives to boost
food production andfood security and ii)
private agribusiness
firms wishing tosecure their supply
chains. Sovereign
and corporate bondissuances may be ofinterest here

Safeguarding
food security
against climatechange impacts
is a priority formany governments
worldwide, e.g.
where climate-driven
spikes in agriculturalcommodity process
have significant
political implications(e.g. wheat prices in
Egypt)

Resilient
CitiesUrban climate
resilience is anurgent priority inmany parts of theworld, especially in
relation to climatechange impacts
such as worsening
flooding andextreme heat

Significant capital
flows through green/sustainable bonds,
although presumably
not mainly for climate
resilience – US$ 590
billion for “buildings”(2006–2022)

Financing urban
development andinfrastructure isa major financing
theme, e.g. themunicipal bonds
market including
green and othersustainablebonds issued bymunicipalities

As urban populations
continue to grow,urban climate
resilience is moving
higher up the political
agendaResilient
HealthClimate change
impacts onhuman health areurgent priorities
in various partsof the world, e.g.
extreme heat in
the South-West
United States, newdisease vectors inSouthern Europe

No information on
capital flows throughgreen/sustainablebonds. However, in thewake of the COVID-19
pandemic, governments
and international
financial institutions
are exploring innovative
financial mechanisms
for the health sector
including pandemic
bonds,34 for example

Social bondissuances are
expanding rapidly
and offer significant
opportunities forraising capitalfor health-related
investment. Sovereignissuances are likely
to be of the greatest
relevance

The COVID-19
pandemic has put
human health andhealth-care provisionin the spotlight likenever before. Healthis now a high politicalpriority in countries
around the world

ResilientIndustry &Commerce

Climate change
impacts area concern ina number ofindustrial sectors,
e.g. water use inminingSome capital flows
through green/sustainable bonds,
although presumably
not mainly for climate
resilience – US$ 16.4
billion for “industry”(2006–2022)

Corporate issuances
are most likely tobe relevant, i.e.
corporates in exposed
sectors/locations
raising capital to build
climate resilience

This is a priority
in several specificsectors, but perhaps
not at the political
level

33
34

Information about green/sustainable bond UoP was provided by the Climate Bonds Market Intelligence TeamWorld Bank, “The Pandemic Fund announces first round of funding to help countries build resilience to future pandemics”, 3 February 2023.
47

Designing a climate resilience classification framework

Resilient
Infrastructure

The urgency
around climateresilient
infrastructure isdriven by i) rapid
infrastructure
growth in climatevulnerable
emerging markets
and ii) ageing
infrastructure
stocks in many
countries aroundthe world

Very significant capital
flows though green/sustainable bonds,
although presumably
not mainly for climate
resilience – US$ 1,320
billion for “energy”,“transport” “water” and“ICT” (2006–2022)

Most likely to
be dominatedby subsovereignissuances, e.g.
water utilities or
power utilities, orby sovereigns forbroader issuancesthat include
infrastructure

Infrastructure isalways a topic thatcommands politicalinterest, especiallyas awareness ofclimate change
impacts (e.g.
extreme weather
events) on criticalinfrastructure
continues to grow

Resilient
Nature &Biodiversity

Biodiversity loss
and habitat loss
is accelerating at
an unprecedented
rate, inmany cases
exacerbated byclimate change
impacts

No information on
capital flows throughgreen/sustainablebonds

The growing
focus on nature isbringing forward
new opportunities
for financing naturerelated investments,
e.g. blue bonds &sustainability-linked
bonds with naturerelated objectives

Nature has becomea prominent
sustainability
theme over recent
years (e.g. 2022
UN Biodiversity
Conference)
which has resulted
in growinginternational
political attention

ResilientSocieties

Awareness is
growing about
the wider societal
impacts ofclimate change,
for instanceclimate-driven
displacement andmigration

No information on
capital flows throughgreen/sustainablebonds

Social bonds
issuances are
expanding rapidly,
and offer significant
opportunities forraising capital fora range of sociallyoriented activities
including education,social protection, etc.
Sovereign issuances
may be of most
relevance

Potentially a more
nascent topic interms of politicalprioritization,although somerelated topics suchas migration are ofsignificant politicalinterest

Populating the climate resilience framework

Classification methodology and screening
criteria

The RTAG will support in populating each climate
resilience theme with the sectors, subsectors,
investment types and climate resilience outcomes. The
RTAG will deliberate on which classification category theinvestments will fall under (i.e. white list, standardized
checks or further assessment). The areas where further
technical work is required at a sectoral or thematic level
will be identified and referred to the TWGs to further

The RTAG will review, substantiate and provide guidanceon the methodological approach for classifying activities,
eligibility parameters and screening criteria as set out
in the white paper. This includes, but is not limited to,defining Substantial Contributions, defining the DNSH
approach to categorizing resilience interventions andproviding guidance on detailed screening criteria forcomplex interventions to be proposed to the TWGs.

48

To facilitate investment in climate resilience through capital markets

B. PROPOSED ROLE OF THE 		TWGS

develop. The composition, frequency of meetings, andmodalities will be different for the TWGs, but the RTAG
will serve as a forum to ensure that appropriate linkages
are created between the relevant TWGs.

The TWGs will play a vital role in verifying and developing
the detailed eligibility definitions and screening criteriathat are proposed in this white paper. TWGs will beformed to work on specific climate resilience themes,
and/or sectors within those themes, the prioritizationof which will be decided by the RTAG as outlined
above. Specifically, this work will entail reviewing
the literature review results as summarized in annex
I (Resilient Infrastructure) and forthcoming similartables that will cover the other climate resilience
themes. This will be done to endorse, improve or add
to the interim screening criteria contained therein, inline with the recommendations of this white paper andany forthcoming additional recommendations from the
RTAG. This will entail reviewing the proposed white list
investments and reviewing and completing as required
all screening criteria for those investments not on thewhite list.

Inputs to the TWGs

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The RTAG may also guide the identification of suitable
experts for the TWGs as well as identify additionalsource materials that may be relevant and useful for thework of the TWGs in developing and refining eligibility
definitions and screening criteria. Potentially, the
RTAG could also play a role in overseeing, guiding andapproving the outputs of the TWGs.

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Designing a climate resilience classification framework

06
ANNEXES50

Designing a climate resilience classification framework

To facilitate investment in climate resilience through capital markets

ANNEX I: CLIMATE RESILIENCE FRAMEWORK PROPOSED STRUCTURE:
ILLUSTRATION USING THE RESILIENT INFRASTRUCTURE 		
THEME
KEY:
- Blue shading = internal information for the Framework’s development only
- Black text = activity; grey text = measure

Does the investment create a risk ofmaladaptation?

Does the investment make a significant
contribution across a broad range ofcontexts (not so much context-specific)

Can the investment create significant
harm to other objectives?

SecTorSubsector

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
acrossbroad rangeof contexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening
criteria – climate
resilience

Considerations
for screening
criteria –significant
harm

ICT
infrastructure

ICT networks

Construction/
expansion/
operation/upgradeof ICT networks

Activity

Adapted

ICT
servicesmoreresilient
to storm
damageY

NY• Resilience:standardized
checksQuantitative

Standardized checks:

Standardized
checks:

ICT
servicesmoreresilient toflooding

N

Access toconnectivity
servicesmoreresilient
to storm
disruption

Y

Investment for which the significant
contribution is context-specific requires“further assessment”

52

Enabling• Technicalspecification:equipment musttolerate windspeeds up to [x]km/h• Significant harm:standardized
checksN

Y

Investment for which the significant
contribution is context-specificrequires “further assessment”
NY

Those investments that have potentialof significant harm need to undergo“standardized check”• Resilience: further
assessment

Quantitative• Flood risk mapping• Significant harm:standardized
checks• Resilience:standardized
checksStandardized checks:• Resilient to [x] year
flood

Quantitative

Standardized checks:• Technicalspecification: mustachieve at least [x]people connected
to storm-resilient
connectivity
services• Significant harm:standardized
checks53• E&S impacts

Standardized
checks:• E&S impacts

Standardized
checks:• E&S impacts

Designing a climate resilience classification framework

To facilitate investment in climate resilience through capital markets

SecTorSubsector

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
acrossbroad rangeof contexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening
criteria – climate
resilience

Considerations
for screening
criteria –significant
harm

ICT
infrastructure

ICT networks

Construction/
expansion/
operation/upgradeof ICT networks

Activity

Adapted

ICT
servicesmoreresilient
to storm
damageY

NY• Resilience:standardized
checksQuantitative

Standardized checks:

Standardized
checks:

ICT
servicesmoreresilient toflooding

N

Access toconnectivity
servicesmoreresilient
to storm
disruption

Y

Access toconnectivity
servicesmoreresilient
to flood
disruption

N

ICT
servicesmoreresilient
to storm
damageY

ICT
servicesmoreresilient
to storm
damageY

Enabling35

Mechanicalstrengthening of
telecommunications
lines

Undergroundtelecommunications
lines

35

MeasureMeasureAdaptedAdapted• Technicalspecification:equipment musttolerate windspeeds up to [x]km/h• Significant harm:standardized
checksN

Y• Resilience: further
assessment

Quantitative• Flood risk mapping• Significant harm:standardized
checksN

Y• Resilience:standardized
checks• Resilient to [x] year
flood
QuantitativeY• Resilience: further
assessment

QuantitativeN• Resilience:standardized
checks• [x] people
connected toflood-resilient
connectivity
services
Quantitative• Resilience: whitelist

Qualitative• Significant harm:
white list

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.

54

• E&S impacts

Standardized
checks:• E&S impacts

Standardized
checks:• E&S impacts

n/a

specification:equipment musttolerate windspeeds up to [x]km/hwhite list

NStandardized checks:

Standardized
checks:• Technical• Significant harm:

N

Further assessment:• Flood risk mapping• Significant harm:standardized
checksN

Standardized checks:• Technicalspecification: mustachieve at least [x]people connected
to storm-resilient
connectivity
services• Significant harm:standardized
checksN

Further assessment:• E&S impacts

55

n/a

n/a

Designing a climate resilience classification framework
SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Wireless segments
in vulnerable
locations

MeasureAdapted

ICT
servicesmoreresilient
to storm
damageY

N

N• Resilience: white

Qualitative

n/a

n/a

ICT
servicesmoreresilient
to storm
damageY

Qualitative

n/a

n/a

ICT
servicesmoreresilient
to storm
damageY

Qualitative

n/a

n/a

ICT
servicesmoreresilient toflooding

N

Quantitative

Further assessment:

n/a

ICT
servicesmoreresilient toflooding

N

ICT
servicesmoreresilient to
extremeweather
eventsY

ICT
servicesmoreresilient to
extremeweather
eventsY

ICT
servicesmoreresilient to
extremeweather
eventsY

Vegetation
management
aroundtransmission/
distribution lines

MeasureRedundancy andbackupMeasureFlood defencesin data centres,
substations etc.

Relocation of data
centres, substations,etc.

Minimizationof backbone
dependency

MeasureMeasureMeasureOff-grid energy use,e.g. renewables,
generators, batteries

Structural
strengthening of
ICT buildings, data
centres, etc.

56

MeasureMeasureAdaptedAdaptedAdaptedAdaptedAdaptedAdaptedAdaptedlist• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience: further
assessment• Flood risk mapping• Significant harm:• Resilient to [x] year

white list

N

Y

• Resilience: further
assessment

flood

Quantitative• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checksN

N• Resilience: whitelist

Further assessment:

Standardized
checks:• E&S impacts

flood

Qualitative

n/a

n/a

Qualitativen/aStandardized
checks:• Significant harm:
white list

N

Y

• Resilience: whitelist• Standardized• GHG emissions

checks: GHG
emissions

N

N• Resilience: whitelist

Qualitative• Significant harm:
white list

57

n/a

n/a

Designing a climate resilience classification framework
SecTorTransport
infrastructure

Subsector

Ports

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Redundancy andbackupMeasureAdaptedICT services
more resilient
to extreme
weather
eventsY

N

N• Resilience: white list

Qualitative

n/a

n/a

Virtualization

MeasureICT services
moreresilient to
extremeweather
eventsY

Qualitative

n/a

n/a

Port
operations
more
resilient toflooding

N

Quantitative

Further assessment:

Standardized
checks:Waterborne
mobility andtrade more
resilient
to flood
disruptionNPort
operations
more
resilient tofloodingNPort
operations
more
resilient tofloodingNPort
operations
more
resilient tofloodingNPort
operations
more
resilient tofloodingNPort
operations
more
resilient toflooding

N

Construction/
expansion/
operation/upgrade ofport facilities

Activity

AdaptedAdaptedEnabling36

Reinforcement of key
structures

Relocation/raising of
key equipment

Heightening quaysidestructures

Breakwaters

MeasureMeasureMeasureDrainage

36

MeasureMeasureAdaptedAdaptedAdaptedAdaptedAdapted• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list

N

Y

• Resilience: further
assessment• Resilient to [x] year
flood

• Significant harm:standardized
checksN

Y• Resilience: further
assessment

Quantitative• Significant harm:standardized
checksN

N• Resilience: further
assessment

QuantitativeN• Resilience: further
assessment

QuantitativeN• Resilience: further
assessment

QuantitativeN• Resilience: further
assessment

QuantitativeN• Resilience: further
assessment

Quantitative

Further assessment:

Further assessment:

Further assessment:

Further assessment:• Resilient to [x] year
flood

• Significant harm:
white list

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
58

n/a

n/a

n/a

n/a

• Resilient to [x] year
flood

• Significant harm:
white list
N

Further assessment:• E&S impacts• Resilient to [x] year
flood

• Significant harm:
white list
NStandardized
checks:• Resilient to [x] year
flood

• Significant harm:
white listN• [x] people orbusinesses
benefiting fromflood-resilient
waterborne
mobility/trade• Resilient to [x] year
flood

• Significant harm:
white list
N

• E&S impacts

59

n/a

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Backup for criticalsystems

MeasureAdaptedPort
operations
more
resilient toflooding

Y

N

N• Resilience: white

Qualitative

n/a

n/a

Port
operations
more
resilient toflooding

Y

Qualitative

n/a

n/a

Port
operations
more
resilient toflooding

Y

Qualitative

n/a

n/a

Port
operations
more
resilient toflooding

Y

Qualitative

n/a

n/a

Port
operations
more
resilient toflooding

N

Quantitative

Further assessment:

Standardized
checks:Roadtransportation more
resilient toflooding

N

Road
transportation more
resilient to
extremeheat

Y

Land-based
mobility
and trademore
resilient
to flood
disruption

N

Redundancy andadditional storage

Flood monitoring
and warning
systems

Emergency
response
capabilities

MeasureMeasureLand-use buffersinc. nature-based
solutionsRoads

MeasureConstruction/
expansion/
operation/
upgrade of roads

MeasureActivity

AdaptedAdaptedAdaptedAdaptedAdaptedEnabling37

37

list

• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

N

Y

• Resilience: further
assessment• Resilient to [x] year

• Significant harm:floodstandardized
checksN

Y• Resilience: further
assessment

Quantitative• Flood risk mapping• Significant harm:standardized
checksN

Y• Resilience:standardized• Resilient to [x] year
flood
Quantitative• Significant harm:standardized

checksY• Resilience: further
assessment

Quantitative

Further assessment:• [x] people orbusinesses
benefiting fromflood-resilient
mobility/trade• Significant harm:standardized
checksEnabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
60

Standardized checks:• Technicalspecification:materials musttolerate [x] degrees
CelsiuschecksN

Further assessment:

61• E&S impacts

Standardized
checks:• GHG emissions• E&S impacts
Standardized
checks:• GHG emissions• E&S impacts

Standardized
checks:• GHG emissions• E&S impacts

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Road flood defences

Road/bridge heightadjustment

Route adjustment

MeasureMeasureMeasureAdapted/enabling

AdaptedAdaptedAdaptedClimateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Land-based
mobility
and trademore
resilient to
extreme
heat

Y

N

Y

• Resilience:standardized
checksQuantitative

Standardized checks:

Standardized
checks:Roadtransportation more
resilient toflooding

N

Road
transportation more
resilient toflooding

N

Road
transportation more
resilient toflooding

N• Technicalspecification:must achieve atleast [x] people
or businesses
benefiting fromextreme heat
resilient transport
networks• Significant harm:standardized
checksN

N• Resilience: further
assessment

Quantitative• Resilience: further
assessment

flood

Quantitative• Resilience: further
assessmentn/a• Resilient to [x] year

white list

Y

Further assessment:• Flood risk mapping• Significant harm:Yn/a• Resilient to [x] year

white list

N

• E&S impacts• Flood risk mapping• Significant harm:

N

Further assessment:• GHG emissions

flood

Quantitative

Further assessment:• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checksStandardized
checks:• E&S impacts

flood• Resilience ofaffected parties

Stormwaterdrainage

MeasureFlood pathway

MeasureAdaptedAdaptedRoadtransportation more
resilient toflooding

N

Road
transportation more
resilient toflooding

N

N

N• Resilience: further
assessment

Quantitative• Resilient to [x] year

white list

Y

• Resilience: further
assessmentn/a• Flood risk mapping• Significant harm:

Y

Further assessment:

flood

Quantitative

Further assessment• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checksStandardized
checks:• E&S impacts

flood• Resilience ofaffected parties

Vegetation plans/
nature-based
solutions

MeasureAdaptedRoadtransportation more
resilient tofloodingN

YY• Resilience: further
assessment

Quantitative

Further assessment:• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checksflood• Resilience ofaffected parties

62

63

Standardized
checks:• E&S impacts

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Heat resistant roadsurfacing

MeasureAdaptedRoadtransportation more
resilient to
extreme
heat

Y

N

N

• Resilience: whitelist

Quantitative

Standardized checks:

n/a

Road
transportation more
resilient to
extremeweather
eventsY

Roadtransportation more
resilient to
extremeweather
eventsN

Roadtransportation more
resilient to
extremeweather
eventsN

Roadtransportation more
resilient to
extremeweather
eventsY

Access towater more
resilient
to waterstressY

Localized powersources

Redundancy andcontingency inc.
alternative routes

Relocation of roadassetsRoad/trafficmonitoring andwarning systems

Water infrastructure

Desalination

Construction/
expansion/
operation/upgradeof desalination
facilities

64

MeasureMeasureMeasureMeasureActivity

AdaptedAdaptedAdaptedAdaptedEnabling• Technicalspecification:materials musttolerate [x] degrees
Celsius• Significant harm:standardized checks

N

Y• Resilience: whitelist

Qualitativen/a• Significant harm:• GHG emissions

standardized
checksY

Y• Resilience: further
assessment

Standardized
checks:Quantitative

Further assessment:• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checksStandardized
checks:• E&S impacts

flood• Resilience ofaffected partiesY

N• Resilience: further
assessment

Quantitative

Further assessment:• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checksStandardized
checks:• E&S impacts

flood• Resilience ofaffected parties

NN• Resilience: whitelist

Qualitative

n/a

n/a

Qualitative

Standardized checks:

Standardized
checks:• Significant harm:
white list

N

Y

• Resilience:standardized
checks• Technicalspecification: mustachieve at least [x]people connectedto additional cleanwater supply• Significant harm:standardized
checks65• GHG emissions• E&S impacts

Designing a climate resilience classification framework

SecTor

To facilitate investment in climate resilience through capital markets

Subsector

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harmFloodmanagement

Construction/
expansion/
operation/
upgrade of flood
management
systems

Activity

Enabling

Other sectors more
resilient tofloodingN

YY• Resilience: further

Quantitative

Further assistance:

Standardized
checks:Increased flooddrainage capacity

MeasureOverflow reservoirs

Infiltration ponds

Flood monitoring
and warning
systems

LeveesMeasureMeasureMeasureMeasureFloodgates

MeasureSand dams

Measure66

AdaptedAdaptedAdaptedAdaptedAdaptedAdaptedAdaptedassessment• Flood risk mapping• Significant harm:standardized
checksOther
sectorsmore
resilient tofloodingN

Other
sectorsmore
resilient tofloodingN

Other
sectorsmore
resilient tofloodingN

Other
sectorsmore
resilient tofloodingY

Other
sectorsmore
resilient tofloodingY

Other
sectorsmore
resilient tofloodingY

Other
sectorsmore
resilient tofloodingYYY• Resilience: further
assessment• Resilient to [x] year
flood

• E&S impacts• Resilience ofaffected parties
Quantitative

Further assessment:n/a• Resilient to [x] year

• Significant harm:flood

white list

• Resilience ofaffected partiesY

Y• Resilience: further
assessment

Quantitative• Resilient to [x] year

• Significant harm:floodstandardized
checksY

Y• Resilience: further
assessment

Further assessment:

Quantitative

Further assessment

Standardized
checks:• E&S impacts

n/a• Resilient to [x] year

• Significant harm:flood

white list

• Resilience ofaffected parties

NN• Resilience: whitelist

Qualitative

n/a

n/a

Quantitative

Further assessment:n/a• Significant harm:
white list

Y

N

• Resilience: further
assessment• Resilient to [x] year

• Significant harm:flood

white list

• Resilience ofaffected partiesY

N• Resilience: further
assessment

Quantitative

Further assessment:n/a• Resilient to [x] year

• Significant harm:flood

white list

• Resilience ofaffected partiesY

N• Resilience: further
assessment

Quantitative

Further assessment:• Resilient to [x] year

• Significant harm:flood

white list

• Resilience ofaffected parties

67

n/a

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Surge barriers

MeasureAdapted

Other
sectorsmore
resilient toflooding

Y

YN• Resilience: further

Quantitative

Further assessment:

n/a

Other
sectorsmore
resilient toflooding

Y

Wastewater
treatment
moreresilient toflooding

N

Pumps

Wastewater
treatment

MeasureConstruction/
expansion/
operation/
upgrade ofwastewater
treatment systems

Activity

Activity

Stormwater
separation

Water
storage

MeasureRainwater
harvesting

MeasureGroundwater
storage

Water
supply39

38
39

MeasureConstruction/
expansion/
operation/upgradeof water supply
systems

Activity

AdaptedAdaptedEnabling38

AdaptedAdaptedAdaptedAdaptedassessment• Resilient to [x] year

• Significant harm:flood

white list

• Resilience ofaffected parties

NN• Resilience: whitelist

Qualitative

n/a

n/a

Quantitative

Further assessment:

Standardized
checks:• Significant harm:
white list

Y

Y

• Resilience: further
assessment• Flood risk mapping• Significant harm:standardized
checksAccess tosanitation
more
resilient
to flood
disruption

N

Wastewater
treatment
moreresilient tofloodingY

Water
supplies
more
resilient
to waterstressY

Water
supplies
more
resilient
to waterstressY

Water
supplies
more
resilient
to waterstressN

YY• Resilience: further
assessment• Resilience ofaffected parties• Resilient to [x] year
flood
Quantitative

Further assessment:• Ensure [x] people
with access toflood-resilient
sanitation services• Significant harm:standardized

checksStandardized
checks:• E&S impacts• Resilience ofaffected parties
NN• Resilience: whitelist

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

Further assessment:

Standardized
checks:• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

Y

Y

• Resilience: further
assessment• Resilience of other• Significant harm:water users

standardized
checksY

Y• Resilience: further
assessment

Quantitative

Further assessment:• [20%] reduction
in water
consumption• Significant harm:

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
i.e. water abstraction, conveyance, treatment and distribution.
68• E&S impacts

69• E&S impacts

Standardized
checks:• E&S impacts

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Enabling40

Access towater more
resilient
to waterstressN

YY• Resilience: further
assessment

Quantitative

Further assessment:

Standardized
checks:• [x] people withwater stressresilient access towater• Significant harm:standardized
checks• E&S impacts• Resilience of otherwater users
Water metering

Water resource
monitoring
equipment

Leak detection
equipment

Automated water
control systems

Energy infrastructure

Hydropower

Construction/
expansion/
operation/upgradeof hydropower
plantsMeasureMeasureMeasureMeasureActivity

AdaptedAdaptedAdaptedAdaptedAdaptedWater
supplies
more
resilient
to waterstressY

Water
supplies
more
resilient
to waterstressY

Water
supplies
more
resilient
to waterstressY

Water
supplies
more
resilient
to waterstressY

Hydropower
generation
more
resilient toflooding

N

N

N• Resilience: whitelist

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Quantitative

Further assessment:

Standardized
checks:• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

Y

Y

• Resilience: further
assessment• Flood risk mapping• Significant harm:• Resilient to [x] year

standardized
checks• E&S impacts

flood• Resilience of otherwater users

Hydropower
generation
more
resilient
to waterstress40

N

YY• Resilience: further
assessment

Quantitative• [x%] reduction in• Significant harm:

minimum flow

standardized
checks• Resilience of otherwater users

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.

70

Further assessment:

71Standardized
checks:• E&S impacts

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adjusted reservoir
capacity

Adjusted spillway
capacity

Adjusted turbine
capacity

Monitoring,
forecasting andmodelling systems

41

MeasureMeasureMeasureMeasureAdapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Enabling41

Access toelectricity
moreresilient
to flood
disruption

N

Y

Y

• Resilience: further
assessment

Quantitative

Further assessment:

Standardized
checks:Access toelectricity
moreresilient towater stressN

Hydropower
generation
more
resilient toflooding

N

Hydropower
generation
more
resilient towater stressN

Hydropower
generation
more
resilient toflooding

N

Hydropower
generation
more
resilient toflooding

N

Hydropower
generation
more
resilient towater stressN

Hydropower
generation
more
resilient toflooding

Y

AdaptedAdaptedAdaptedAdapted• At least [x] people
with access toflood-resilientelectricity• Significant harm:standardized
checksY

Y• Resilience: further
assessment

Quantitative• At least [x] people
with access towater stressresilient electricity• Significant harm:standardized
checksY

Y• Resilience: further
assessment

QuantitativeY• Resilience: further
assessment

Y• Resilience: further
assessment

QuantitativeY• Resilience: further
assessment

Y• Resilience: further
assessment

QuantitativeN• Resilience: white
list

Standardized
checks:• E&S impacts

Standardized
checks:• E&S impacts

Standardized
checks:• E&S impacts• Resilience of otherwater users
Quantitative

Further assessment:n/a• Resilient to [x] year
flood

Quantitative

Further assessment:n/a• [x%] reduction inminimum flow
thresholdQualitative• Significant harm:
white list

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
72

Further assessment:• Resilient to [x] year
flood

• Significant harm:
white list
N

• E&S impacts• Resilience of otherwater users• Significant harm:
white list
N

Further assessment:• [x%] increase inreservoir capacity• Significant harm:standardized
checksN

Standardized
checks:• Resilience of otherwater users• Significant harm:standardized
checksY

Further assessment:• Resilient to [x] year
flood

• Significant harm:standardized
checksY

Further assessment:• E&S impacts

73

n/a

n/a

Designing a climate resilience classification framework

SecTorSubsector

Wind power

To facilitate investment in climate resilience through capital markets

Investment

Level

Construction/
expansion/
operation/upgrade ofwind power facilities

Activity

Adapted/enabling

AdaptedEnabling42

Shorter blade design

Mechanicalstrengthening of
towersRelocation of wind
power facilities

42

Measures

Measures

Measures

AdaptedAdaptedAdaptedClimateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Hydropower
generation
more
resilient towater stress

Y

N

N

• Resilience: white list

Qualitative

n/a

n/a

Wind power
generation
more
resilient
to storm
damageY

Quantitative

Standardized checks:

Standardized
checks:Wind power
generation
more
resilient toflooding

N

Access toelectricity
moreresilient
to storm
disruption

Y

Access toelectricity
moreresilient
to flood
disruption

N

Wind power
generation
more
resilient
to storm
damageY

Wind power
generation
more
resilient
to storm
damageY

Wind power
generation
more
resilient
to storm
damageN• Significant harm:
white list
N

Y

• Resilience:standardized
checks• Technicalspecification:equipment musttolerate windspeeds up to [x]km/h• Significant harm:standardized

N

Y• Resilience: further
assessment

Quantitative• Flood risk mapping• Significant harm:standardized
checksN

Y• Resilience: further
assessment• Resilient to [x] year
flood
QuantitativeY• Resilience: further
assessment

QuantitativeN• Resilience:standardized
checksQuantitativeN• Resilience:standardized
checksQuantitativeY• Resilience: further
assessment

Quantitative

Standardized checks:

Further assessment:• Avoided exposure
to wind speeds
exceeding [x] km/h

• Significant harm:standardized
checksEnabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.

74

• E&S impacts

Standardized
checks:• E&S impacts

Standardized
checks:• E&S impacts

n/a

n/a

• Technicalspecification:equipment musttolerate windspeeds up to [x]km/h• Significant harm:
white list

NStandardized checks:

Standardized
checks:• Technicalspecification:equipment musttolerate windspeeds up to [x]km/h• Significant harm:
white list

N

Further assessment:• At least [x] people
connected toresilient, reliable
electricity supply• Significant harm:standardized
checksN

Further assessment:• At least [x] people
connected to stormresilient electricity
supply• Significant harm:standardized
checksN

Further assessment:• E&S impacts

75

Standardized
checks:• E&S impacts

Designing a climate resilience classification framework

SecTorSubsector

Thermalpower

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harmWind power facility
flood defences

Measures

AdaptedWind power
generation
more
resilient
to flood
damageN

N

Y• Resilience: further
assessment

Quantitative

Further assessment:

Standardized
checks:Thermalpower
generation
more
resilient to
extremeheat

Y

Thermalpower
generation
more
resilient towater stressY

Access toelectricity
moreresilient to
extremeheat

Y

Access toelectricity
moreresilient towater stressY

Thermalpower
generation
more
resilient to
extremeheat

Y

Thermalpower
generation
more
resilient towater stressY

Construction/
expansion/operation/
upgrade of [lowcarbon] thermal
power plants

Activity

AdaptedEnabling43

Resized cooling units

Dry cooling systems

43

MeasureMeasureAdaptedAdapted• Flood risk mapping• Significant harm:standardized
checksN

Y• Resilience: further
assessment• Resilient to [x] year
flood
Quantitative• Technicalspecification:must maintain [x%]efficiency above [y]degrees Celsius• Significant harm:standardized
checksN

Y• Resilience:standardized
checksQuantitativeY• Resilience:standardized
checksQuantitativeY• Resilience:standardized
checksQuantitativeY• Resilience:standardized
checksQuantitativeY• Resilience:standardized
checksQuantitative

Standardized checks:• Technicalspecification:must achieve [x%]reduction in water
consumption• Significant harm:standardized
checksEnabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
76

Standardized checks:• Technicalspecification:must maintain [x%]efficiency above [y]degrees Celsius• Significant harm:standardized
checksN

Standardized checks:• Technicalspecification: mustachieve at least [x]people connected
to water stressresilient electricity
supply• Significant harm:standardized
checksN

Standardized checks:• Technicalspecification: mustachieve at least [x]people connected
to extreme heat
resilient electricity
supply• Significant harm:standardized
checksN

Standardized checks:• Technicalspecification:must achieve [x%]reduction in water
consumption• Significant harm:standardized
checksN

Standardized checks:

77• E&S impacts

Standardized
checks:• GHG emissions• E&S impacts

Standardized
checks:• GHG emissions• E&S impacts

Standardized
checks:• GHG emissions• E&S impacts

Standardized
checks:• GHG emissions• E&S impacts

Standardized
checks:• GHG emissions

Standardized
checks:• GHG emissions

Designing a climate resilience classification framework

SecTor

To facilitate investment in climate resilience through capital markets

Subsector

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harmPowergeneration

Construction/
expansion/
operation/upgrade ofpower plants

Activity

AdaptedPower
generation
more
resilient toflooding

N

N

Y• Resilience: further
assessment

Quantitative

Further assessment:

Standardized
checks:Access toelectricity
moreresilient
to flood
disruption

N

Power
generation
more
resilient tofloodingNPower
generation
more
resilient tofloodingNPower
generation
more
resilient to
extremeweather
eventsY

Powergeneration
more
resilient to
extremeweather
eventsY

Power transmission anddistribution
more resilient to storm
damageYPower transmission anddistribution more
resilient toflooding

N

Enabling44

Relocation of power
plant facilities

Power plant flood
defencesPowertransmission
anddistribution

44

MeasureMeasureWeather/energy
use monitoring,
forecasting andmodelling systems

MeasureSafety andemergency systems
in power stations

MeasureConstruction/
expansion/
operation/upgrade ofpower transmission
and distribution
systems

Activity

AdaptedAdaptedAdaptedAdaptedAdapted• Flood risk mapping• Significant harm:standardized
checksN

Y• Resilience: further
assessment• Resilient to [x] year
flood
Quantitative• [x] people
connected to floodresilient electricity
supply• Significant harm:standardized
checksN

Y• Resilience: further
assessment

QuantitativeN• Resilience: further
assessment• Resilient to [x] year
flood

QuantitativeN• Resilience: white list

• GHG emissions

Standardized
checks:• GHG emissions

n/a• Resilient to [x] year
flood

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Quantitative

Standardized checks:

Standardized
checks:• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list

N

Y

• Resilience:standardized
checks• Technicalspecification:equipment musttolerate windspeeds up to [x]km/h• Significant harm:standardized
checksN

Y• Resilience:standardized
checksQuantitative• Significant harm:standardized
checks79• E&S impacts• Furtherassessment:

Standardized
checks:• Flood risk mapping• E&S impacts• Resilient to [x] year
flood

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
78

Further assessment:

Standardized
checks:• Flood risk mapping• Significant harm:
white list

N

Further assessment:• Flood risk mapping• Significant harm:standardized
checksN

Further assessment:• GHG emissions

Designing a climate resilience classification framework

SecTor45

Subsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Mechanicalstrengthening oftransmission anddistribution lines

MeasureUndergroundtransmission/
distribution lines

MeasureVegetation
management aroundtransmission/
distribution lines

MeasureStructural
strengthening of
substation roofs andwalls

MeasureFlood defences insubstations

MeasureAdapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Enabling45

Access toelectricity
moreresilient
to storm
disruption

Y

N

Y

• Resilience:standardized
checksQuantitative

Standardized checks:

Standardized
checks:Access toelectricity
moreresilient
to flood
disruption

N

Power transmission anddistribution more
resilient
to storm
damageYPower transmission anddistribution more
resilient
to storm
damageYPower transmission anddistribution more
resilient
to storm
damageYPower transmission anddistribution more
resilient
to storm
damageYPower transmission anddistribution more
resilient toflooding

N

AdaptedAdaptedAdaptedAdaptedAdapted• Technicalspecification: mustachieve at least [x]people connected
to storm-resilientelectricity grid

• Significant harm:standardized
checksY

Y• Resilience: further
assessment

Quantitative• [x] people
connected to floodresilient electricity
grid• Significant harm:standardized
checksN

N• Resilience:standardized
checksQuantitativeN• Resilience: whitelist• E&S impacts

n/aQualitative

n/a

n/a

Qualitative

n/a

n/a

Quantitative

Standardized checks:n/a• Significant harm:
white list

NN

• Resilience: whitelist• Significant harm:
white list

NN

• Resilience:standardized
checks• Technicalspecification:equipment musttolerate wind speed
up to [x] km/h

• Significant harm:
white list

Y

N

• Resilience: further
assessment

Quantitative

Further assessment:• Flood risk mapping• Significant harm:
white list

• Resilient to [x] year
flood

Enabling activities must meet the criteria for corresponding adapted activities in the row above plus the additional criteria in this row.
80

Standardized checks:

Standardized
checks:• Technicalspecification:equipment musttolerate wind speed
up to [x] km/h

• Significant harm:
white list

N

Further assessment:• E&S impacts

81

n/a

Designing a climate resilience classification framework

SecTorSubsector

To facilitate investment in climate resilience through capital markets

Investment

Level

Adapted/enabling

Climateresilience
outcomeSubstantial
Contribution
to climate
resilience
across broad
range ofcontexts

Maladaptation

Significant
harm

Eligibility category

Type of
Substantial
Contribution
to climate
resilience

Considerations forscreening criteria –climate resilience

Considerations
for screening
criteria –significant harm

Relocation ofsubstations

MeasureAdaptedPower transmission anddistribution more
resilient toflooding

N

Y

N• Resilience: white list

Quantitative

Further assessment:n/aPower transmission anddistribution more
resilient to
extremeweather
eventsY

Power transmission anddistribution more
resilient to
extremeweather
eventsY

Power transmission anddistribution more
resilient to
extremeweather
eventsY

Power transmission anddistribution more
resilient to
extremeweather
eventsY

Power transmission anddistribution more
resilient to
extremeweather
eventsY

Power transmission &distribution more
resilient to
extremeweather
eventsY

Strengthening gridconfiguration

MeasureAutomated grid
controls

MeasureMini-/microgrids

MeasureEnergy storage

MeasureWeather/energy
use monitoring,
forecasting andmodelling systems

MeasureSafety andemergency systems

Measure82

AdaptedAdaptedAdaptedAdaptedAdaptedAdapted• Significant harm:
white list

NN

• Resilience: white list

• Flood risk mapping• Resilient to [x] year
flood
Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

n/a

n/a

Qualitative

n/a

n/a

• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list

NN

• Resilience: white list
• Significant harm:
white list83

To facilitate investment in climate resilience through capital markets

51@Unsplash/Victor/ONJ9urGXrIg

Designing a climate resilience classification framework

ANNEX II: TERMS OF REFERENCE FOR THE RESILIENCE TECHNICALADVISORY GROUP
Context

areas such as social, sustainability, SDG, blue andresilience. Despite this growth in the demand for labelledissuances, the supply of project pipelines still falls short,leaving investor demand unmet. The lack of clarity on
what constitutes a resilient investment is a major reason
for the supply and demand mismatch in climate resilience
investments. This uncertainty can make it difficult for bothinvestors and issuers to identify credible and impactfulprojects for inclusion in thematic instruments, hindering theflow of capital towards this critical area.

As the effects of climate change become increasingly
apparent and damaging, the urgency to direct financing
from capital markets towards climate resilience grows morepressing. The United Nations Environment Programme
estimates adaptation and resilience financing needs of up
to US$ 300 billion per year by 2030 in developing countries
alone,46 while global adaptation and resilience financing
needs would be significantly higher. However, current
finance flows for climate resilience are way below theseestimated needs. In 2021, the Climate Policy Initiative
found that reported finance flows relating to climate
resilience (i.e. adaptation finance) were only US$ 46 billion
per year, out of total reported climate finance flows of US$
632 billion per year.47 Almost all adaptation finance comesfrom the international public sector such as development
finance institutions, with less than US$ 1 billion comingfrom private finance sources.

To overcome this challenge, Climate Bonds is developinga “climate resilience taxonomy” in collaboration withpartners (e.g. UNDRR) that will provide a classification
system and screening criteria for climate resilience
investments. This taxonomy will promote a moreconsistent, transparent and systematic approach to defining
and identifying such investments. The development of
the climate resilience taxonomy is just one of several key
levers for mobilizing finance for climate resilience that
Climate Bonds is pursuing as part of its Global Resilience
Programme, which is further described below.

The sustainable bonds market offers a substantial
opportunity to bridge the gap between current finance flows
and the estimated requirements for climate resilience.
Green bonds, which have already channelled over US$
3 trillion from capital markets to sustainable activities,
have emerged as a primary vehicle for financing climate
action. However, despite the significant progress madeby sustainable bonds, only a small portion of the capital
flows are currently directed to climate resilience. Based on
Climate Bonds research, only 19 per cent of labelled green
bonds were found to have any resilience-related UoP.

Climate Bonds Global Resilience Programme
The Climate Bonds Global Resilience Programme aims
to mobilize global capital for investments in the climate
resilience of physical, social, ecological and financial
systems. It will achieve this by catalysing US$ 1.5 trillion
within the thematic bond market to flow towards resilience
investments by 2025 and by influencing the public sector
in key geographies to establish policy and regulatory
measures that incentivize investments that enhancesystemic and transformative resilience.

Yet the demand for thematic borrowing and investment has
expanded and diversified in recent years, encompassing

46
47

Adaptation Gap Report 2021; UNEP, 2021
Global Landscape of Climate Finance 2021; Climate Policy Initiative, 2021

84

To facilitate investment in climate resilience through capital markets

The programme has three expected outcomes:

1

2

3

Investment opportunities
that build resilience are being
identified using common,
science-based standards anddefinitions

Credible resilience measures
are being financed at scale
through the sustainable debt
marketThe scale and speed of growthof resilience investments
are accelerated througha supportive policy andregulatory environment thatis underpinned by common
and credible definitions ofresilience investments

Climate Bonds will implement its strategy for this programme through three workstreams as depicted below:

85Designing a climate resilience classification frameworkWorkstream 1: Evidence-based rule sets

Programme working groups

Develop guidance (definitions, criteria and screening
tools) to enable sovereign, subnational and corporate
debt issuance to finance projects that increase physical,
social, economic and ecosystem dimensions ofresilience. This includes primarily the development of
the climate resilience taxonomy as well as updating the
Climate Bonds Standards and Certification Scheme toenable the certification of resilience-focused bonds.

The implementation of the programme will be guided andinformed by a range of stakeholders and collaborators.
This will include high-level consultation with funders of
this work programme through a Resilience Programme
Steering Group; expert guidance and advice froman RTAG to steer the development of the resiliencetaxonomy; TWGs to work on the detailed developmentof specific priority resilience themes in the climate
resilience taxonomy; Resilience Bonds Issuers Club
composed of a group of issuers to exchange knowledge
and enable cross-pollination among first movers andpotential issuers; and an investor group to ensure thatthe outputs are fit for purpose for investors. See thefigure 1 below for further details.

Workstream 2: Market and pipeline development
Provide training, capacity-building, technical assistanceand tools that enable demonstration issuances(sovereign, subsovereign and corporate) to kick-startmarkets and create a global movement around resiliencefinance. The geographic priorities of this work include
Africa, the Association of Southeast Asian Nations, EU,
the Latin America and Caribbean Region, South Asia andthe United States of America. Through this workstream,
Climate Bonds will also strategically engage investors
both to educate and inform, but also to ensure thatdefinitions, reporting and transparency are decisionuseful for investors. Climate Bonds also intends tocreate a platform for knowledge exchange and technicalsupport for issuers and early movers in the market.

Progress to date: white paper on developing a climate
resilience classification framework
With support from UNDRR, Climate Bonds has developed
a white paper on developing a climate resilienceclassification framework. This white paper sets out a
blueprint for the development of the climate resiliencetaxonomy.
The white paper sets out proposals under each of the
below topics for consideration and feedback from the
RTAG and other stakeholders:Workstream 3: Enabling policy•

Embed resilience definitions into national and regionaltaxonomies (Climate Bonds is advising 20+ countries,
including China, the EU and India). Advocate for policy
measures and regulations that incentivize investments
in resilience (e.g. credit support and guarantee
schemes, preferential lending and regulatory and fiscal
measures). Climate Bonds will put forward actionable
policy recommendations to policymakers, backed bypartners and global investors. Engaging investors to
support policy action forms a critical leverage point of
our strategy.

•
•
•

86

The context and rationale for the development of
the climate resilience taxonomy
Proposed thematic structure and priorities for the
climate resilience taxonomy
Parameters to guide the population of theclimate resilience taxonomy including use cases,
screening and eligibility criteria and usability
considerations
An initial overview of how the climate resiliencetaxonomy will be populated with eligibility
definitions and screening criteria, including apartial example

To facilitate investment in climate resilience through capital markets

FIGURE 1. Global Climate Resilience Programme working groups

Resilience Taxonomy Advisory Group
Climate resilience themes

Purpose and role of the Resilience Taxonomy AdvisoryGroup

Developing a comprehensive climate resilienceclassification framework requires significant resources
and time. Our approach is holistic and cross-cutting,covering social, economic and ecosystem resilience.
Despite the challenge, urgency demands immediate
action, and prioritizing resilience themes can help
achieve impact and scale quickly.

The RTAG’s purpose is to assist Climate Bonds inthe development of the climate resilience taxonomy.
The white paper on developing a climate resilienceclassification framework already provides the RTAG
with a starting point with recommendations on the
structure and approach. The RTAG will review therecommendations set out in the white paper andprovide strategic advice on the further development of
the Framework.

The RTAG will advise on prioritization and sequencing
for further development by TWGs, with a focus on themost urgent needs for advancing the framework andscaling up capital flows for resilience. Prioritization must
be clear, understandable, reflect market interest andidentify where mobilization of capital flows will result inclear benefits in terms of building climate resilience.

As part of this, it is anticipated that the RTAG will adviseon the following specific issues.

87Designing a climate resilience classification framework•

Classification methodology and screening criteria
The RTAG will provide guidance on the methodologicalapproach for classifying activities, eligibility parametersand screening criteria. The white paper will provide
initial proposals for these aspects, and the RTAG will
review and endorse them or refer to TWGs for more
sector-specific insight. This includes, but is not limited
to, defining Substantial Contributions, defining the
DNSH approach to categorizing resilience interventions,and providing guidance on detailed screening criteria forcomplex interventions to proposed TWGs.

•

To reflect the global reach of capital markets, and in theinterests of diversity of expertise and views, every effort
will be made to ensure that the RTAG will be drawn frominstitutions and include individuals:•

The RTAG will support Climate Bonds in populatingeach resilience theme with the sectors, subsectors,
investment types and climate resilience outcomes. The
RTAG will deliberate on which classification category theinvestments will fall under (i.e. white list, standardized
checks or further assessment). The areas where further
technical work is required at a sectoral or thematic level
will be identified and referred to the TWGs to further
develop. The composition, frequency of meetings, andmodalities will be different for the TWGs, but the RTAG
will serve as a forum to ensure that appropriate linkages
are created between the relevant TWGs.

••

As a technical advisory group, the responsibilities aredetailed below.

•
•
•
•

in and representing both developed and developing
countries
in and representing diverse groups of stakeholders,
particularly those most vulnerable to climate
impacts
in and representing a range of financial sector
organizations and other key stakeholder groups(including environmental NGOs, research institutions
and other expert organizations)

Members should have knowledge or experience in green
debt instruments and/or expertise in climate resilience,show firm commitment to Climate Bonds and the Global
Climate Resilience Programme’s objectives, and be able
to meet the required time commitment.

Responsibilities of the RTAG•

Disseminate the climate resilience taxonomy andsupport market adoption

Membership and time commitment

Populating the climate resilience framework•

Highlight potential risks, offer wise counsel andexpertise to resolve issues

Review materials that will be provided prior tobiweekly RTAG meetings

The RTAG will be made up of no less than 10 members
and no more than 30. Members will commit to aminimum period of 1.5 years. We expect up to 1.5 daysof time commitment per month for the first six months,
followed by 0.5 days per month for the subsequent oneyear commitment.

Attend RTAG meetings on a biweekly basis for six
months and then on a monthly basis for anotherone year period

Operations and proceedings

Review the white paper on designing a climate
resilience classification framework in detail andprovide feedback and insights

The RTAG will largely undertake its role through online
group meetings, and from time to time on a one-on-one
basis. An agenda and supporting information for all
agenda items will be sent at least one week in advanceof the meeting. The RTAG will be chaired by Climate
Bonds.

Make suggestions and recommendations for the
Climate Bonds team to consider and evaluate
Incorporate challenge and rigour into
programme to ensure it is fit for purposetheBe prepared to engage in discussions to explore
potential pitfalls and unintended consequenceswith other panel members88

To facilitate investment in climate resilience through capital markets

ANNEX III: OTHER RELEVANT RESILIENCE-RELATED TAXONOMIESEU Taxonomy
be applicable to any sector. The taxonomy comprises four
elements: a definition of “adaptation SME”, eligibility criteria,
a classification of adaptation SMEs, and a results climate
resilience framework to report on outcomes. It describes
a results chain of activities, inputs, outputs, outcomes andimpacts. Solutions are classified in multiple ways: by type,by industry sector, by risk addressed (which can be chronic
or acute) and by geographical region.

The EU taxonomy for sustainable activities, whose purpose
is to help bring the EU’s economy in line with the European
Green Deal, includes climate change adaptation as thesecond of six environmental objectives. Recommendations
for technical screening criteria under the adaptation
objective cover 68 activities across eight sectors. Overall,the EU taxonomy is process focused rather than outcome
focused, in respect of adaptation and resilience. The
taxonomy uses principles of Substantial Contribution
and DNSH. For any given activity making a Substantial
Contribution to one objective (e.g. climate change
adaptation), it must also do no significant harm to any of
the other five objectives (e.g. climate change mitigation) inorder to stay aligned with the taxonomy. DNSH thresholds
are defined separately for each activity, with an averageof seven DNSH requirements for each adaptation
objective. Adaptation Substantial Contribution criteria areapproached in a different way from mitigation criteria toreflect the context- and location-specificity of adaptation
activities, being subject to generic considerations rather
than stringent minimum standards. Adaptation activities
should – among other things – involve an assessment ofclimate risk and vulnerability, favour nature-based solutions
and be monitored and measured for progress over time.

United Kingdom Green Taxonomy
The main purpose of the United Kingdom Green Taxonomy
is to address greenwashing. Inspiration is largely drawn
from the EU taxonomy, but the taxonomy is tailored to reflect
the United Kingdom’s own circumstances and climate
goals. The role of DNSH criteria is under review, with EU
DNSH requirements judged to be complex and restrictive if
used for judging baseline eligibility rather than for ensuringtransparency. For adaptation, the taxonomy has been using
EU technical screening criteria as its basis and, accordingly,
has a focus on process rather than outcomes. A lack ofpolicy surrounding adaptation and resilience in the UK has
been an obstacle in developing relevant criteria.

ASAP Taxonomy
UNDP SDG Finance Taxonomy
In the ASAP Taxonomy, adaptation is defined in terms of risk
reduction and impact reduction, while resilience is definedin terms of system strength and the capacity to withstandshocks. The taxonomy seeks to identify small and mediumsized enterprises (SMEs) that provide adaptation solutions
in developing countries (where adaptation is considered ahigh priority) and identify those SMEs’ support needs. Eligible
SMEs are termed “adaptation SMEs” and their identificationis the first step in the ASAP strategy to unlocking theirpotential in helping developing countries adapt to climatechange, either by helping to address systemic barriers toadaptation or by helping to prevent and reduce material risk.
Adaptation SMEs can either provide intelligence solutions,such as monitoring and forecasting, or provide products
and services; their contribution to climate adaptation must
be quantitatively measurable. The taxonomy is intended to

The UNDP SDG Taxonomy, made with China in mind but
internationally adaptable, is designed to identify financeprojects that help to achieve the 17 United Nations
SDGs. The SDGs are diverse and not confined to climate
targets, with a large focus on security and equality, andthe taxonomy is the first to have a focus on creating
socioeconomic equality. Relevant SDG targets are mapped
onto each eligible project. Climate change adaptation,
along with mitigation, is considered part of SDG 13 (climate
action), which is also one of six SDGs that explicitly mention
resilience. Food and agriculture, cities, energy and materials,
and health and well-being are acknowledged as the fourareas into which the 60 biggest market opportunities forsustainable development can be categorized.

89

Designing a climate resilience classification framework

UNDRR Budget tagging and tracking of national
expenditure accounts
The UNDRR is working on a taxonomy to help governments
tag and track public expenditures related to DRR andclimate change adaptation (CCA). The definitions of DRR
and CCA may vary between locations, and the two alone
are different: CCA is restricted to climate hazards while DRR
also includes geophysical, technological, biological andenvironmental hazards. As part of these efforts, UNDRR is
working with the International Institute for Environment andDevelopment to get lessons from countries’ experienceswith DRR and CCA tagging and tracking, developing
guidance and training materials for designing a DRR and
CCA budget tagging, and developing a DRR and CCA
taxonomy.

Sendai Framework for Disaster Risk Reduction
2015–2030
The Sendai Framework defines resilience as “The abilityof a system, community or society exposed to hazards
to resist, absorb, accommodate to and recover fromthe effects of a hazard in a timely and efficient manner,
including through the preservation and restoration of its
essential basic structures and functions”. Investing in DRR
for resilience is one of four priorities for action, divided into
national-/local-level aims (generally focused on policy andgovernance and looking to strengthen sectors) and global-/
regional-level aims (focused on international cooperationand collaboration). Resilience measures should be “costeffective and instrumental to save lives, prevent and reduce
losses and ensure effective recovery and rehabilitation”.
Seven targets are given as indicators of progress against theframework. These include indicators of material damage(loss of life, affected people, economic loss, infrastructuredamage) and of capacity for disaster management (riskreduction strategies, international cooperation, capacity forknowledge). These targets are to be measured at a global
level.

90

To facilitate investment in climate resilience through capital markets

ANNEX IV: APPLICATION OF THE FRAMEWORK ACROSS DIFFERENTSUSTAINABLE FINANCING INSTRUMENTS
The Framework may also be applied across a range of sustainable finance instruments and other levers that can be pulled
to influence capital flows towards resilience. These may include UoP bonds, non-UoP bonds and other sustainable financeinstruments as detailed below. This is similar to the way that low-carbon (mitigation) taxonomies may also be applied acrossa range of financing instruments.

UoP bonds for resilience

•

•

•

•

48

relevant physical climate risks. For example, theEuropean Bank for Reconstruction and Development
made an inaugural climate resilience bond issuancein 2019 based on a portfolio of investments that
had been assessed both for physical climate risk
management and for their contribution to delivering
positive climate resilience outcomes.

Green bonds: these raise financing for projects
with environmental benefits, especially low-carbon
objectives, but they may also support climate
resilience objectives, as set out in Global Center on
Adaptation/Climate Bonds guidance on green bonds
for climate resilience.48 They may be especially suited
to issuers such as corporates, utilities subsovereigns
or sovereigns that wish to raise capital for specificinvestments in equipment, systems or infrastructurethat contribute towards climate resilience.

•Blue bonds: these are a subset of green bonds,
raising financing specifically for marine- and oceanbased projects with positive environmental, economic
and climate benefits. They may have a particular fit
with climate resilience priorities related to ocean
ecosystems and fisheries.
Transition bonds: these raise financing for the issuer’stransition to reduced environmental impact, mostcommonly to reduce GHG emissions, and in that casethey are a subset of green bonds. They could support
resilience priorities in cases where the issuer needs
to pursue decarbonization and resilience objectives
at the same time, e.g. industrial or energy generation
operations that are vulnerable to climate change
impacts.

•

Resilience bonds: these are bond issuances, normallya subset of green bonds, in which the proceed target
investments that make a positive contribution towards
building climate resilience in addition to managing

Social bonds: these raise financing for projects
with positive social outcomes such as job creation/
safeguarding, better health services, better housing,access to vital services for the vulnerable, financial
inclusion, education and culture. They are generally
issued by public entities such as governments (central
or local), or other public sector agencies – althoughprivate issuance is not impossible. It is therefore
possible that social bonds may offer opportunities
for raising financing for climate resilience priorities
that intersect with better social outcomes, e.g. better
protection, access to services or access to finance forgroups that have been adversely affected by climatechange impacts.
Sustainability bonds: these raise finance for bothgreen and social projects. Sometimes these may beseparate (e.g. a mix of renewable energy projects andhealth projects) and sometimes there may be overlaps(e.g. social housing with high energy efficiency rating).
Sustainability bonds may raise finance for resilience
relating to social and climate priorities.

Global Center on Adaptation, Green Bonds for Climate Resilience – A Guide for Issuers (Rotterdam, 2021).

91Designing a climate resilience classification framework

Non-UoP bonds••

Catastrophe bonds: these raise financing for
insurance companies in the event of a natural
disaster, and as such may play a role in ensuringthat the insurance industry is able to extend
cover to a greater scope of vulnerable assets andhouseholds. This may be relevant to increasing
the climate resilience of vulnerable business andhouseholds through better financial inclusion.
Sustainability-linked bonds: these have variablefinancial and/or structural characteristics linked
to the achievement of predefined sustainability
objectives. While this category is rapidly growing,
experience of the fit with climate resilience isstill at an early stage. They may be potentiallyrelevant to entity-level issuances across a range ofclimate resilience themes, subject to the definitionof suitable climate resilience-related metrics
against which the issuer’s performance could
be benchmarked and financing terms adjusted
accordingly.

Other sustainable finance instruments
Beyond bond instruments, the Framework may also be used
to screen a variety of other levers important for redirecting
capital flows such as public subsidies, credit enhancement
facilities, green export credits, debt-for-nature swaps,
general entity financing, and others (see also table 3).

92

To facilitate investment in climate resilience through capital markets

ANNEX V: INFORMATION SOURCES USED IN THE LITERATURE REVIEW•

Climate science

•

•
•

•

•

Intergovernmental Panel on Climate Change.
Climate Change 2021: The Physical Science
Basis. Contribution of Working Group I to the Sixth
Assessment Report of the Intergovernmental Panelon Climate Change. Cambridge and New York:
Cambridge University Press, 2021. https://www.
ipcc.ch/report/ar6/wg1/.

•

Intergovernmental Panel on Climate Change. Climate
Change 2022: Impacts, Adaptation and Vulnerability.
Cambridge and New York: Cambridge University
Press, 2022. https://www.ipcc.ch/report/ar6/wg2/.

•

Intergovernmental Panel on Climate Change.
Climate Change 2022: Impacts, Adaptation
and Vulnerability. Summary for Policymakers.
Cambridge and New York: Cambridge University
Press, 2022. https://www.ipcc.ch/report/ar6/wg2/.

•

World Meteorological Organization. Climate Indicators
and Sustainable Development: Demonstrating theInterconnections. Geneva, 2021. https://library.wmo.
int/doc_num.php?explnum_id=10804.

United Nations Sustainable Development Group.
The 17 goals, undated. https://sdgs.un.org/goals.
Sachs, J.D., and others. Six transformations toachieve the sustainable development goals (SDGs).
Paris, Kuala Lumpur and New York, 2019. https://resources.unsdsn.org/six-transformations-toachieve-the-sustainable-development-goals-sdgs.
UnitedNations
Environment
Programme.
Adaptation Gap Report 2021: The gathering storm– Adapting to climate change in a post-pandemic
world. Nairobi, 2021. https://www.unep.org/
resources/adaptation-gap-report-2021.
United Nations Framework Convention on Climate
Change. Sharm-El-Sheikh Adaptation Agenda.
Bonn, 2022. https://climatechampions.unfccc.int/
wp-content/uploads/2022/11/SeS-AdaptationAgenda_Complete-Report-COP27_FINAL-1.pdf.
United Nations Framework Convention on Climate
Change. Nationally determined contributions
under the Paris Agreement. Synthesis report by
the secretariat. Bonn, 2022. https://unfccc.int/
documents/619180.

Policy context

Guidance on climate resilience/adaptation in green
and sustainable bonds

•

•

•
•

Barbara Buchner and others. Global Landscape of
Climate Finance 2021. San Francisco: Climate Policy
Initiative, 2021. https://www.climatepolicyinitiative.
org/publication/global-landscape-of-climatefinance-2021/.

•

United Nations Office for Disaster Risk Reduction.
Global Assessment Report on Disaster Risk Reduction.
Cairo, 2019. https://www.undrr.org/publication/globalassessment-report-disaster-risk-reduction-2019.

•

United Nations Office for Disaster Risk Reduction.
Sendai Framework for Disaster Risk Reduction
2015-2030. Cairo, 2015. https://www.undrr.org/
publication/sendai-framework-disaster-riskreduction-2015-2030.
93

Climate Bonds Initiative. Climate Resilience
Principles: A framework for assessing climate
resilience investments. London, 2019. https://www.
climatebonds.net/climate-resilience-principles.
Global Center on Adaptation. Green Bonds for
Climate Resilience – State of Play and Roadmap to
Scale. Rotterdam, 2021. https://gca.org/reports/
green-bonds-for-climate-resilience-state-of-play-androadmap-to-scale/.
Global Center on Adaptation. Green Bonds for
Climate Resilience – A Guide for Issuers. Rotterdam,
2021.
https://gca.org/reports/green-bonds-forclimate-resilience-a-guide-for-issuers/.

Designing a climate resilience classification framework•

Other sustainable finance/resilience/adaptation
taxonomies

•

•
•
•
•

•

•

Trabacchi, Chiara, and others. Adaptation Solutions
Taxonomy. New York and San Francisco, The
Lightsmith Group, 2020. https://lightsmithgp.com/
wp-content/uploads/2020/09/asap-adaptationsolutions-taxonomy_july-28-2020_final.pdf.

United Nations Development Programme. Technical
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International Finance Corporation. Guidelines: Blue
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Designing a climate resilience classification framework

ANNEX V: EVIDENCE BASE FOR THE IDENTIFICATION OF FRAMEWORKCLIMATE RESILIENCE THEMESThe AR6 analysis on climate change impacts, adaptationand vulnerability49 presents compelling scientific evidenceof more frequent and intense climate and weather
extremes, including acute, extreme events and chronic,
longer-term trends. These have widespread and pervasive
impacts – covering both climate shocks over near-termhorizons and progressive climate shifts over longerterm horizons – on a broad range of natural and humansystems,50 including ecosystems, food and water security,
human health, urban settlements, economic activity andhumanitarian crises. These impacts are multicausal andoverlapping, with complex interactions between interlinked
systems, meaning that climate vulnerabilities are context
specific, resulting from both direct climate change impacts(e.g. lack of precipitation resulting in water stress), and fromindirect climate change impacts (e.g. extreme heat harming
agricultural production, which in turn leads to population
displacement).
According to AR6, there is also significant complexity
involved in the process of defining climate resilience
priorities in response to these climate vulnerability contexts.

There are multiple possible pathways by which communities,
nations and the global community can achieve climateresilient development51 while balancing synergies and tradeoffs between different options, interests and values.

Sustainable Development Goals and climate-resilient
development
Building on the evidence-based foundation of IPCC analysis,
the definition of priority investment themes and sectors for
the Framework should also take account of the SDGs,52and specifically the definition of actions that support theachievement of the SDGs in the face of current and projected
future climate change impacts.53 SDGs have the advantage
of being widely recognized by markets and a wide rangeof other stakeholders as an authoritative framework forunderstanding progress towards sustainable development
across a wide range of dimensions and perspectives. They
provide an authoritative and widely recognized frameworkfor pursuing sustainable development, which is also
highly relevant for setting priorities for climate-resilient
development. The 17 SDGs are displayed in figure 1 below.

Copyright: United Nations, 2019
49
50
51
52
53

Intergovernmental Panel on Climate Change, Climate Change 2022: Impacts, Adaptation and Vulnerability. Summary for Policymakers(Cambridge and New York, Cambridge University Press, 2022).
Intergovernmental Panel on Climate Change, Climate Change 2022: Impacts, Adaptation and Vulnerability. Summary for Policymakers, Figure
SPM.2.
E. Lisa F. Schipper and others, “Climate Resilient Development Pathways”, in Climate Change 2022: Impacts, Adaptation and Vulnerability,
Edward R. Carr and others, eds. (Cambridge and New York, Cambridge University Press, 2022).
United Nations Sustainable Development Group, “The 17 goals”, undated. Available at https://sdgs.un.org/goals.
In a parallel way, the Climate Bonds Taxonomy for low-carbon activities prioritizes sectors with the greatest potential for achieving GHG
emission reductions, and for market traction.
96

To facilitate investment in climate resilience through capital markets

Given the relatively large number of SDGs and thecomplexity of the SDG framework, there have been several
attempts to set out the SDGs in a more streamlined andefficient fashion, to aid their application and delivery, as
outlined here:••

The United Nations Sustainable Development
Solutions Network “Six Transformations”:54 a
simplified framework for SDG operationalization
based on: i) education, gender and inequality; ii)
health, well being and demography; iii) energy
decarbonization and sustainable industry; iv)
sustainable food, land, water and oceans; v)
sustainable cities and communities; and iv) digital
revolution for sustainable development.
The UNDP SDG Finance Taxonomy: a frameworkwith a focus on financing sustainable development
based on i) affordable basic infrastructure; ii)
affordable housing; iii) health; iv) education,technology and culture; v) food security and vi)
financial services.
55

There have also been several attempts to map the SDGs
against climate change impacts/vulnerabilities and to
define SDG-based climate resilience priorities. These
include the following:

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54
55
56
57
58
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WMO’s analysis of “Climate Indicators andSustainable Development”56 examines how a rangeof climate indicators (i.e. climate risks) threaten
the achievement of the SDGs. Priorities for building
climate resilience are defined as managing foodsecurity, agricultural and fishing yields, cultural
heritage, impacts on tourism, livelihoods, conflicts,
health impacts, water scarcity, displacement, built
infrastructure and soil and water resources.

•

The 2022 Sharm-El-Sheikh Adaptation Agenda:58
released at the Twenty-seventh Session of theConference of the Parties to the United Nations
Framework Convention on Climate Change inNovember, this United Nations framework setsout five “impact systems” for advancing action on
adaptation (or climate resilience), mapped against
the SDGs. These are i) food security and agriculture
systems, ii) water and nature systems, iii) humansettlement systems, iv) ocean and coastal systems,
and v) infrastructure systems (as well as two crosscutting themes: planning and finance).

Nationally determined contributions and climate
resilience
NDCs are the country-level building blocks of the Paris
Agreement, through which the signatory countries set out
their respective contributions to the achievement of theParis Agreement’s objectives, based on their nationallyowned priorities. The 2022 NDC Synthesis Report,59
released by the United Nations Framework Convention on
Climate Change in advance of the Twenty-seventh Session,
identified the following climate resilience (adaptation)priorities with synergies for the achievement of the SDGs:i) food production and nutrition security, ii) freshwater
resources, iii) urban areas and other human habitats, iv)
key economic sectors and services (infrastructure, energy,
tourism, transport, cultural heritage, industry and mining), v)
terrestrial and wetland ecosystems, vi) ocean ecosystems,vii) coastal and low-lying areas, vii) livelihoods and poverty,
and viii) human health. These various information sources
on SDGs and climate resilience priorities that have beenreviewed in this section give broadly similar but slightly
different breakdowns, and are largely overlapping.

AR657 identifies four priority “system transitions” forthe achievement of the SDGs in the light of identified
climate change impacts and vulnerabilities,
with several corresponding climate responses/
adaptation options, all of which are estimated todeliver benefits for the achievement of the SDGs.
These are i) land and ocean ecosystems, ii) urban
and infrastructure systems, iii) energy systems andiv) cross-sectoral.
Sustainable Development Solutions Network, “Six transformations to achieve the Sustainable Development Goals (SDGs)” (Paris, Kuala
Lumpur and New York, 2019).
Xu Qing and Christoph Nedopil Wang, Technical Report on SDG Finance Taxonomy (China) (Beijing, UNDP, 2020).
WMO, Climate Indicators and Sustainable Development: Demonstrating the Interconnections (Geneva, 2021).
Intergovernmental Panel on Climate Change, Climate Change 2022: Impacts, Adaptation and Vulnerability. Summary for Policymakers.
United Nations Framework Convention on Climate Change, Sharm-El-Sheikh Adaptation Agenda (Bonn, 2022).
United Nations Framework Convention on Climate Change, Nationally97determined contributions under the Paris Agreement. Synthesis report by
the secretariat (Bonn, Germany).

Designing a climate resilience classification framework98