Activating Blended Finance for Resilient Infrastructure, the Climate Threat to Elections, Overstory's New Wildfire Models, and More

We’re talking about climate tipping points again, I see.

For the uninitiated, these refer to the warming thresholds beyond which various Earth systems begin to go off the rails. The most infamous of these systems, arguably, is the Atlantic Meridional Overturning Circulation (AMOC) — a vast ocean current that carries warm, salty water from the tropics to the North Atlantic, sustaining the temperate climates of Northern Europe and rainfall patterns across much of the rest of the world. As the world warms, this current is slowing, and could cross a tipping point where its collapse becomes inevitable before the century is out.

The consequences would be catastrophic. Europe would become a far colder continent. Large swathes of Africa could be starved of rain. Parts of the US Eastern Seaboard could sink under rising seas. And this is just one tipping point. Small wonder the theme garners so many headlines.

It’s also gaining traction in certain corners of the adaptation community. Sarah Kapnick — former Chief Scientist at the National Oceanic and Atmospheric Administration and now Global Head of Climate Advisory at JP Morgan — wrote about climate tipping point risks earlier this month. Jupiter Intelligence’s Josh Hacker published his own piece on AMOC collapse just the other week.

But I question whether obsessing over climate tipping points is a useful preoccupation for adaptation practitioners — and particularly whether it’s a challenge we should expect financial institutions and corporations to engage with.

Most obviously, what is driving the planet toward these tipping points is anthropogenic warming at a global scale. Stopping them from breaching requires, above all else, a reduction in human-caused greenhouse gas emissions and fossil fuel use. This is a mission best carried out by governments, which alone can coordinate the whole-of-society response the moment demands. Private adaptation actions will not change the shape of tipping point scenarios.

Moreover, the consequences of tipping points may be impossible to adapt to in any conventional sense — and certainly not at the level of an individual business or investment portfolio. A 2024 Science Advances paper makes this plain in reference to the freezing effect on Europe that would follow AMOC collapse, saying there is “no realistic adaptation measures [that] can deal with such rapid temperature changes.”

More prosaically, we shouldn’t expect business and financial institutions to meaningfully engage with tipping points because the risks they entail are projected to unfold over many tens or hundreds of years — far beyond the time horizons of most CEOs, CIOs, and risk managers. The collapse of the AMOC, while undoubtedly terrifying, would take a century or more to play out. Yes, we should do everything possible to prevent it, and the most consequential action must happen this century. But the data does not support the case that financially material risks from climate tipping points are likely to manifest within the planning horizons of private institutions. Arguing for tipping point action on the basis of corporate risk management, therefore, is for the birds.

For her part, Kapnick writes that “climate tipping points have emerged as a phenomenon of concern but also deep uncertainty and scientific debate in recent years. We need to try to bridge this gap to truly prepare businesses for deeply consequential climate events.” Yet much of her paper is a procession of reasons why markets and private organizations are disincentivized to factor far-distant tipping point impacts into their own risk analysis. Even for nearer-term tipping point impacts like coral reef die-off, the question of financial materiality to large businesses and investors remains wide open. Calamitous for local communities and small businesses, certainly — but likely a rounding error for most global, diversified corporations.

Indeed, the JP Morgan paper identifies two good reasons why private actors aren’t incorporating tipping points into their risk analysis: they are undermodeled, and their time horizons are too long or too uncertain to price. As I've argued before, accounting for catastrophic risk in forward planning is genuinely hard for institutions. In the worst-case tipping point scenarios, the world is so utterly transformed that no historical analog exists to anchor expectations. Any attempt to price this in a meaningful way is fanciful.

Tipping point risks must be addressed — but by governments, with the backing of the societies they represent. They are not a productive target of adaptation action. Corporates and financial institutions are better equipped and more intrinsically motivated to adapt to near-term physical climate risks — extreme weather, rising temperature variability — than to the wholesale collapse of the world as we know it.

Louie Woodall
Editor, Climate Proof

🔔 A reminder to all readers that I’ll be taking paternity leave shortly, and that the Climate Proof newsletter will continue on a pared-down schedule. Learn more HERE

Most infrastructure-focused blended finance funds are not incorporating climate resilience in their investment strategies, an analysis by consultancy BCG and the Coalition for Disaster Resilient Infrastructure (CDRI) shows.

Their examination of 40 infrastructure-focused blended funds finds resilience features in just 23% of mandates. Moreover, most funds target new builds. While this allows for resilience features to be incorporated at the inception of new projects, it means the “enormous climate exposure” of existing assets is being overlooked.

Blended finance transactions — those that involve public and private capital working in tandem — reached US$250bn in 2024, but only 13% targeted adaptation between 2019 and 2024, according to Convergence, a think-tank and blended finance network. Investment in upgrading existing infrastructure to be climate resilient has to increase 13-fold by 2050 to protect economic output, BCG says.

To support the flow of blended finance into resilient infrastructure, BCG and CDRI offer a new framework for designing investment structures “that are intentional about resilience.” They also explore three fund archetypes for encouraging investment in resilience: one, a “dual-window” blended mechanism that finances both new and existing assets in a single funds; two, a special purpose vehicle structure that allows infrastructure investments to be aggregated by sector, region, or project type'; and three, a “hub-and-spoke” model which gathers assets from multiple separate investment structures into one central fund.

The Development Bank of Southern Africa has committed capital to Africa Finance Corporation’s US$750mn Infrastructure Climate Resilient Fund (ICRF), joining the Green Climate Fund — which made a US$253mn equity commitment, its largest in Africa — alongside the European Investment Bank and Nigeria Sovereign Investment Authority. The ICRF targets 10 to 12 infrastructure projects across renewable energy, transport, digital, and industrial sectors, incorporating climate risk screening across the full asset lifecycle. By leveraging private investors, the fund aims to mobilize up to US$3.7bn in total financing to address Africa’s adaptation finance gap. The Development Bank of Southern Africa did not publicize the amount or type of capital it is providing. (AFC Capital)

The World Bank priced a US$120mn performance-linked bond tied to spekboom restoration in South Africa. The native plant is known for its resilience to drought conditions and ability to sequester carbon from the atmosphere. While the proceeds of the bond itself will be used to finance the World Bank’s sustainable development lending activities, investors have agreed to receive a lower coupon than usual so that a portion can instead be paid to Imperative, a private company charged with planting spekboom across 50,000 hectares in South Africa’s Eastern Cape. Maturing in 2040, it is the bank’s longest-dated outcome bond. Nuveen, AllianceBernstein, MetLife Investment Management, and L&G are among investors. (World Bank)

Aon’s 2026 Climate and Catastrophe Insight report puts global flood losses at more than US$42bn in 2025 and US$2tn since 2000, with drought adding US$13bn in economic damage last year. Rainfall-induced flood risk could rise 19% under high-emissions scenarios by mid-century, the company says. Aon further highlighted the yawning flood insurance protection gap — finding that in counties receiving National Flood Insurance Program payouts, only 2.6% of residential structures held flood policies. (Aon)

A new insurance-linked securities fund is raising US$1bn to underwrite insurance risk tied to data centers — the first insurance-linked securities vehicle to target the asset class specifically. Euler ILS Partners, set up by former Credit Suisse bankers, is structuring the fund as a sidecar, offering investors a quota share of an insurer’s risk — and targeting returns above 15%. The move comes as insurable values for a single data center reach up to US$30bn per location, with natural hazard exposures a rising concern. Swiss Re models show more than 40% of US data center capacity sits in significant tornado zones, while Verisk finds rising temperatures already threaten resilience at more than half of the 100 largest data-center hubs. (Bloomberg)

Researchers at UC Santa Cruz and The Nature Conservancy have developed a methodology for structuring and valuing “resilience credits” for private and public investment in coastal wetlands. The framework quantifies the storm-damage reduction value of mangroves and tidal marshes, creating a standardized way to measure the coastal protection they provide and making it possible to turn investment in these into certifiable financial assets. The methodology has been evaluated and published by Verra, a non-profit that manages a large voluntary carbon-markets program and sets standards for other environment-linked markets. (UC Santa Cruz)

Climate-related stresses are challenging the conduct of democratic elections and may warp voter behavior, a new report says

A global survey by the International Institute for Democracy and Electoral Assistance (IDEA) documents how natural hazards — including floods, wildfires, and hurricanes — have disrupted at least 94 elections and referendums across 52 countries over the past two decades, with 23 elections in 18 countries affected in 2024 alone.

IDEA offers 11 recommendations for addressing climate-related election risks. These include calling on governments to reclassify electoral processes as critical infrastructure, having them lengthen the period for voter registration and voting to reduce the probability of disruption by acute events, and ensuring disaster-proof backup capacity for voter registration systems.

The reports further highlights how climate shocks can undermine democracy at a deeper level, by traumatizing populations so that their existing grievances are amplified — encouraging the spread of conspiracy theories and strengthening the impulse to impose hardships on society’s most vulnerable.

The report draws on more than 100 country briefs and 13 in-depth case studies spanning floods in Bosnia, wildfires in Canada and California, earthquake disruption in Türkiye, and record heat during the Philippines’ May 2025 midterms.

Just one in three people globally believe governments are well prepared for future climate impacts, according to a new 31-country Ipsos survey of 23,704 adults. Two-thirds of risk experts and 75% of the general public report feeling personally vulnerable to climate change, yet confidence in public authorities to manage those risks remains thin. In addition, competing policy concerns — including crime, inflation, unemployment — have pushed climate change to 11th place in a ranking of peoples’ day-to-day worries. (Ipsos Mori)

Extreme heat now threatens the livelihoods of 1.23 billion people in agriculture and is accelerating losses across every major food system, according to a new report from the Food and Agriculture Organization and World Meteorological Organization. Agricultural workers face mortality rates from occupational heat exposure 35 times higher than other sectors and productivity losses from prolonged high temperature conditions. 470 billion labor hours were lost globally in 2021 alone. High-emission projections put 75% of global livestock under dangerous heat stress by 2100, with annual production losses in the tens of billions. (World Meteorological Organization)

A senior political appointee at the US Federal Emergency Management Agency (FEMA) privately warned agency leadership in January and February that staff cuts and a growing tally of natural disasters were pushing the agency toward "increased operational risk" ahead of the June 1 hurricane season. Victoria Barton, FEMA’s communications chief, urged Department of Homeland Security approval for a number of quick policy fixes to ease pressure on the agency, including closing a large backlog of legacy disaster declarations to free up staff time for future challenges. (E&E News)

California’s effort to make fossil fuel companies pay for wildfire insurance losses collapsed last Wednesday when a state Senate committee rejected the measure for the second time in two weeks. Senate Bill 982, authored by Senator Scott Wiener, would have authorized the attorney general to sue fossil fuel companies to recover costs borne by the California FAIR Plan, the insurer of last resort recovering from a surge in claims and rush of new enrollments following the Los Angeles wildfires. The bill failed 3-7 in the Senate Insurance Committee despite late amendments intended to soften the impact on the oil and gas industry. (The Sacramento Bee)

Heat-related deaths across Europe rose in 99.6% of monitored regions over the past decade, averaging 52 additional deaths per million inhabitants annually compared with 1991–2000, according to the 2026 Lancet Countdown on health and climate change. The summer of 2024 was the hottest on record, exposing 2.3 billion person-days of heatwave risk among infants and older adults. At the same time, transmission suitability for Dengue virus has surged 297% since 1981–2010 due to rising temperature, likely leading to a surge in outbreaks of the illness across the continent. (The Lancet)

France dropped climate change from the G7 environment ministers’ agenda in Paris last week as a sop to the Trump administration. The concession, confirmed by Ecology Minister Monique Barbut’s office, was intended to preserve unity among the club of developed nations. The meeting instead covered biodiversity funding, ocean conservation, and desertification — areas where consensus remains possible. (France 24)

The UK Parliament’s Environment, Food and Rural Affairs Committee has issued a call for evidence on wildfire risks, citing record incidents in 2025. This will examine land management, emergency service capacity, cross-departmental coordination, and government funding mechanisms. Written submissions are due May 15. (UK Parliament)

Taiwan launched its fourth National Climate Adaptation Action Plan to prepare for high warming scenarios and an increase in cascading extreme weather risks. The plan covers measures for 2026 through to 2030, and adopts the 59 international Belém adaptation indicators approved by countries at COP30 last year. Taiwan has already conducted extreme-heat drills simulating three consecutive days of 38°C temperatures in Taipei and New Taipei City, and deployed 5,767 cooling stations nationwide. Authorities plan to establish a National Climate Change Adaptation Resilience Center to connect climate research with policy governance. (Taipei Times)

Street trees and sidewalk greenery can cool cities, but nowhere near enough to keep pace with climate change, according to a study of 133 cities published in Environmental Research Letters. Researchers found that even the most ambitious possible expansion of street green space by 2050 would offset only 3-11% of projected heat stress growth under current emissions policies — and just 2-7% under a high-emissions scenario. Cooling efficiency varies sharply by climate zone and the structure of urban environment, with dry and continental cities benefiting most. (Environmental Research Letters)

Wildfire intelligence company Overstory has launched what it calls the first AI models capable of predicting utility-caused wildfires and power outages at the level of individual trees and shrubs.

The new Outage Model and Ignition Model identifies the specific vegetation and utility assets most at the risk and provides grid operators with a ranked list of interventions to try before incidents occur. The company trained the models on reams of satellite imagery, aerial data, historical outage records, asset age, and weather variables across millions of network miles.

A companion tool, Overstory Scenarios, lets operators model the cost and risk-reduction trade-offs of different resilience programs in real time — compressing analysis that previously took weeks.

Overstory is used by six of the ten largest utilities in North America and is backed by Blume Equity, Energy Impact Partners, B Capital, and Semapa Next.

JBA Risk Management, a UK-based flood modeling company, has released a suite of global climate change flood maps designed to help insurers, investors, and corporates assess physical flood risk under multiple warming scenarios. The maps apply climate model-derived change factors to JBA’s existing global flood datasets — covering river, surface water, and coastal flooding — allowing risk projections to shift in line with changing climate expectations. The product supports both asset-level and portfolio-wide analysis and is intended to help clients meet regulatory compliance demands alongside internal investment and valuation decisions. (JBA)

A new machine learning framework has identified eight US Gulf and Atlantic Coast cities at severe flood risk, with New York City carrying the largest exposed population — 4.75 million under general flood conditions — and New Orleans the most complete exposure, with roughly 99% of residents and buildings at high risk. The study deployed three machine learning models against FEMA historical damage data across 16 hazard, exposure, and vulnerability variables. (Science Advances)

Shifting tides: A decade of business climate adaptation and resilience research (2013–2023) (Corporate Social Responsibility and Environmental Management)

Unveiling patterns in the quality and consistency of climate adaptation plans of the Global Covenant of Mayors (npj Urban Sustainability)

Decade-long warming accelerates antibiotic resistance in grassland soils (Nature)

On using large language models to support social research for climate action (npj Climate Action)

Widespread shift toward extreme dominated precipitation with pronounced trends in arid and mediterranean regions (Scientific Reports)

Assessing the impact of extreme climate events on cardiovascular disease in 157 Chinese cities (2015–2020): A spatial and causal analysis (American Journal of Preventive Medicine)

From resilience to “susilience”: Toward further theoretical perspectives in sustainable supply chains (Sustainable Development)

An ambitious global goal on adaptation for heritage (npj Climate Action)

Thanks for reading!

Louie Woodall
Editor