Financial Institutions Wrestle with Adaptation Data Gaps, a Divisive Colorado River Plan, AiDASH Acquired by Schneider Electric, and More

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Financial institutions lack the data needed to evaluate adaptation responses and outcomes, making it harder to measure whether climate-proofing actions are working and whether capital is reaching the right places, according to a Climate Policy Initiative (CPI) review.

The paper maps the data landscape for tracking physical risk exposure and the responses of financial institutions and real-economy actors. It flags gaps that keep this data from connecting across asset, institution, and system levels — data CPI says is needed to show whether A&R action is actually reducing vulnerability. “Current initiatives have not yet captured the causal chain between an adaptation response and a measurable resilience outcome. This limits the ability to understand how well the financial sector is prepared for climate risks and obscures potential opportunities to scale investment in A&R in the real economy,” the report reads.

Figures cited from CPI's Net Zero Finance Tracker (NZFT) — which covers 1,500 institutions — offer context on the disclosure-action gap. While some 79% of tracked institutions by assets under management reported climate risk exposure in 2024, only 33% evaluate and act on it with appropriate tools. CPI plans to expand the tracker with adaptation-specific targets and portfolio-level resilience indicators.

The paper also analyzes eight leading A&R frameworks — including the Task Force on Climate-related Financial Disclosures, the International Sustainability Standards Board and the EU's Corporate Sustainability Reporting Directive — to find where expectations for financial institutions converge. CPI identified 26 emerging best practices across four pillars: governance, strategy and planning, risk management, and real-economy and policy engagement. The analysis stops short of ranking or scoring individual frameworks, though some of the eight cover more of the best practices than others.

For example, on governance — while CPI found board-level oversight of climate risk is covered in all frameworks — most do not call for executive pay to be tied to resilience performance or mandate third-party verification of adaptation plans. On strategy and planning, there is little focus by the frameworks on the development of adaptation-focused financial products. Real-economy and policy engagement is the weakest pillar across frameworks. Only three of the eight frameworks tell institutions to engage clients or investee companies on A&R planning beyond risk disclosure.

“Adaptation and resilience are becoming increasingly important across the core functions and activities of financial institutions,” Lizzie Russler, Analyst at CPI, told Climate Proof. “While the sector is improving its ability to identify and disclose physical climate risks, the greater challenge is turning that insight into action. The largest gaps now lie in tracking how financial institutions and their clients respond—and whether those actions reduce vulnerability and expected losses, improve insurability, and preserve asset value over time.”

Natural catastrophes inflicted US$112bn of economic losses worldwide in the first half of 2026 – a tad below the 10-year average – according to Munich Re. However, of these losses only US$44bn were insured, a 60% protection gap. North America again dominated the global total at about US$47bn in economic losses (US$34bn insured), with an April severe-thunderstorm outbreak across the central US the costliest single event. The reinsurer flags a potential record-breaking ‘super’ El Niño toward year-end as the key swing factor for full-year figures, bringing with it increased risk of drought and wildfires in some regions, and torrential rainfall in others. In July, insurance broker Aon estimated first half catastrophe losses at US$112bn, of which US$47bn were insured.  (Munich Re)

Climate change has driven US$57bn in flood, storm, and drought losses across small island states over the past 25 years, according to new ODI Global research. Using an updated attribution model, the organization assigns a larger fraction of attributable risk (FAR) – a measure of how much human-caused global warming alters the probability and intensity of specific extreme weather events – to storms: 0.57, up from 0.43. Hurricane Melissa alone cost Jamaica US$12.2bn in total losses in 2025, roughly 57% of GDP, of which US$9.7bn is attributable to climate change’s magnification of the storm’s impacts. Storm losses could reach US$49bn by 2050 under 1.5°C warming, the report notes. (ODI)

Outrigger Impact, a ‘blue economy’ financing platform, achieved a first close on its inaugural blended-finance vehicle targeting ocean-related business investments across Small Island Developing States. The fund aims to deploy capital in sectors that strengthen climate adaptation and resilience, including circular economy, sustainable fisheries, ecosystem restoration, coastal resilience, and climate-smart infrastructure. Contributors to the initial raise include the Nordic Development Fund and the Luxembourg-European Investment Bank Climate Finance Platform. Outrigger is targeting a final close of US$100mn by 2027. (Outrigger Impact)

Fiji has rolled out its first climate risk parametric insurance product aimed at micro, small and medium-sized enterprises. The product, developed by Tower Insurance with backing from the Reserve Bank of Fiji, UNCDF, UNDP and the Asian Development Bank, offers fast, pre-agreed payouts to businesses struck by torrential rainfall and high winds. At the product’s launch, Fiji’s Minister for Finance Esrom Immanuel said cyclones and floods cost Fiji more than US$500mn each year, more than 5% of GDP. (Islands Business)

Two carbon market standard-setters have launched a new initiative exploring how carbon credits can help close the climate adaptation finance gap for vulnerable countries. The Voluntary Carbon Markets Integrity Initiative (VCMI) and Global Green Growth Institute (GGGI) are sponsoring research in how these instruments could unlock capital for climate-proofing measures, with modeling showing that if carbon credit sales account for just one-fifth of revenue in nature-based resilience solutions they could generate as much as US$50bn for climate adaptation. The VCMI estimates carbon markets could unlock US$20bn more annually if countries align their carbon market frameworks with adaptation priorities. A report from the initiative is due by early November. (VCMI)

The Trump administration put the finishing touches to a framework for managing the Colorado River on Friday, under the shadow of persistent, climate change-fueled droughts that threaten water access for some 40 million people and hydropower resources in seven states.

In its Final Environmental Impact Statement, the Interior Department directs officials to issue operating plans every two years for how the river system’s waters will be shared across states rather than setting one, decade-long rule. Interior Secretary Doug Burgum called it a bridge to “durable, consensus-based solutions” across the Basin States.

The federal government can regulate the flow of water through the Colorado River using the Hoover and Glen Canyon Dams, which impound Lake Mead and Lake Powell, the country’s two largest reservoirs.

While the framework aims to head off a looming water and energy crisis across a broad swathe of the American West, it lays out a range of reservoir releases and conservation measures that could curtail allocations to the downstream states — Arizona, California, and Nevada — by hundreds of billions of gallons without imposing similar restrictions on their upstream neighbors: Colorado, New Mexico, Utah, and Wyoming.

Arizona Governor Katie Hobbs criticized Interior’s framework, arguing that it could allow the federal government to force the state “to take the majority of draconian water cutbacks.” California’s negotiators said upstream states must share reductions too, with JB Hamby of the Colorado River Board of California saying “specific, measurable reductions in water use by every state” are needed.

President Trump denied disaster aid to four Democratic-led states despite federal agencies finding that each met standards for approval after February’s record winter storm, Politico reports. New Jersey, Massachusetts, Rhode Island, and New York sought a combined US$227mn in federal assistance in the wake of the blizzard, with internal documents showing that snow-related costs exceeded the limits required to trigger action by the Federal Emergency Management Agency (FEMA) in all cases. The denials break decades of precedent. Presidents since 2001 have approved 69 of 70 qualifying snow-aid requests. FEMA now says it will restrict snow assistance to “truly extraordinary events that overwhelm local and state capabilities”. (Politico)

US lawmakers introduced the FLOOD Act on July 27, designed to help US farmers get ahead of rising flood risk and strengthen food security. The legislation from Representatives Jimmy Panetta and Randy Feenstra, alongside Senators Lisa Blunt Rochester and Jim Justice, would fold the US Department of Agriculture’s Emergency Watershed Program into the Regional Conservation Partnership Program, and allow for the purchase of voluntary easements in high-risk floodplains before disasters hit. It would also improve access to flood relief by rural and farming communities. The bill has drawn endorsements from The Nature Conservancy, American Rivers Action Fund and two dozen conservation and agriculture groups. (US Representative Jimmy Panetta)

European Union crisis chief Hadja Lahbib called for increased preventive investments to combat wildfires in the wake of runaway blazes across France and Spain. Countries should redirect EU funding toward forest management and public education on fire-risk behavior rather than just more firefighting equipment, she said. The bloc has deployed a record 770-plus firefighters across the continent this summer together with specialized airplanes and helicopters. (Reuters)

Spain has committed €19mn (US$22mn) to climate-resilient shelters and urban green infrastructure as part of a new National Network of Climate Shelters. The spaces — open to all members of the public — offer relief to vulnerable people unable to cool themselves at home, and are situated in libraries, museums, sports centres, and other public spaces. €10mn (US$11.5mn) of funding will go into establishing new centers, and €9mn (US$10.4mn) to prepare the population for higher temperatures and more extreme weather. (La Moncloa)

French Prime Minister Sébastien Lecornu has directed Ecology Minister Monique Barbut to draft measures to fast-track the country’s third National Climate Adaptation Plan in the wake of this summer’s runaway wildfires and unprecedented heatwaves. The plan prepares France for up to 4°C of warming by 2100 with measures spanning buildings, agriculture, transport, water management, and education — including reworking school and exam calendars around extreme-heat periods. (France 24) 

The UK, France, and Spain issued joint statements framing recent wildfires as a security threat and pledging to work together to advance international climate resilience efforts “including through enhanced adaptation measures, strengthened preparedness and risk reduction.” UK Foreign Secretary Ed Miliband and his French counterpart, Jean-Noël Barrot,  further committed to expanding early-warning systems through the CREWS initiative, which supports the UN’s Early Warnings for All effort. (UK Government (1) (2))

More than 100 UK manufacturers, non-profits, and food retailers – including Tesco, Sainsbury's, and Aldi – sent a letter to Prime Minister Andy Burnham urging a legally binding Good Food Bill to shore up national food security. The push comes amid challenging conditions for British farmers, who have seen fertiliser costs surge roughly 40% since last year and fruit and vegetable production down 16% since 2015. The proposed bill would mandate binding nutrition targets and set five-year action plans and independent progress reporting — formalizing food resilience as a cross-government priority alongside energy and defense. (The Food Foundation)

Scotland is establishing a National Flood Advisory Service to coordinate flood protection schemes and embed best practice nationwide. The draft 2025-26 budget allocates an additional £15mn (US$20mn) for delivery of expanded flooding resilience and coastal adaptation work on top of £42mn (US$56mn) in annual local authority funding and £150mn (US$201mn) committed over the current parliament. The strategy targets adaptable urban and rural landscapes, expanded property-level flood resilience, and better data for exposure planning. (Scottish Government)

Singapore has opened its first National Adaptation Plan to public consultation, formalizing a heat-, flood-, coastal-, and water- and food-security framework the government first outlined in March. The initial plan is slated for release in 2027, and will focus on identifying climate risks and inventorying existing adaptation measures ahead of further discussions across government and the private sector on how to finance new and improved adaptations. (The Straits Times)

Schneider Electric agreed to acquire roughly 90% of AiDASH in an all-cash deal valuing the climate tech start-up at US$350mn, deepening the French energy giant’s push into AI-driven grid resilience. The transaction, entered into on June 20 and announced last Thursday, follows Schneider Electric’s earlier stake through SE Ventures.

AiDASH, founded in 2019 and based in Palo Alto, uses satellite imagery and AI to monitor vegetation, wildfire, and storm risks for utilities and other infrastructure operators. The company serves more than 185 customers and employs about 335 people across the US, India, and the UK.

The deal folds AiDASH into Schneider's One Digital Grid platform, creating what the company calls an end-to-end reliability and resilience offering for grid operators. Completion awaits regulatory approval.

AiDASH had raised US$91.5mn to date, including a US$58.5mn Series C round in 2024 backed by Duke Energy, National Grid and Marubeni, and The Lightsmith Group — a growth equity-focused fund prioritizing investments in climate resilience-strengthening technologies. 

“AiDASH shows that the market has woken up to the value of adaptation and resilience solutions — AiDASH is one of the first examples, but will by no means be the last,” said Jay Koh, Managing Partner at The Lightsmith Group.

Verisk has acquired McKenzie Intelligence Services (MIS), a UK-based geospatial intelligence firm specializing in real-time catastrophe and conflict event analysis. MIS’s military-grade satellite and aerial data will feed into Verisk’s catastrophe models, giving insurers faster property-level damage assessments and portfolio exposure estimates after major loss events. The buyout deepens the risk modeler’s foothold in the reinsurance risk analytics market. (Verisk)

MSCI has completed its acquisition of First Street, closing a US$120mn deal first announced on June 24. The physics-based climate risk data provider covers more than 2.4 billion structures worldwide, giving MSCI expanded capabilities to model physical climate exposures across real estate and infrastructure portfolios. First Street’s revenues will be reported as part of MSCI’s Sustainability and Climate segment, which had operating revenues of US$91.9mn in Q2 — up 3.4% year-on-year. (MSCI)

Copernicus, the Earth observation arm of the European Union’s Space programme, has launched Fire Emissions Watch, a near-real-time tool for tracking global wildfire emissions and smoke plumes. The service leverages satellite data and forecasts from the European Centre for Medium-Range Weather Forecasts to track emissions and other pollutants in fire smoke. The application already shows France’s worst July on record, with 0.89 megatonnes of carbon emitted — well above the 2022 record of 0.64 megatonnes. The tool is intended to empower planners and researchers to analyze emissions by grid cell, region, or custom geography back to 2003, and to help with near-term air quality risk assessments. (Copernicus)

Major intensification of fire weather across southern Europe in recent decades (Scientific Reports)

Climate change perception–impact–adaptation pathways among farmers: evidence from seven major agricultural governorates in Egypt (Scientific Reports)

Climate change enhances the success of marine invasive species (Global Change Biology)

Climate adequacy and market risk: Are they related? Empirical evidence from the European equity market before and after the adoption of the Paris Agreement (Business Strategy and the Environment)

The past and future impact of climate change on childhood malaria in Africa (Nature)

Climate change increases likelihood of compounding drivers of severe wildfire conditions in France and Spain (World Weather Attribution)

Flood risk mapping and the distributional impacts of climate information (American Economic Journal: Economic Policy)

Putting people at the centre of UK climate adaptation and resilience (UK Government Office for Science)

Thanks for reading!

Louie Woodall
Editor