Glasgow Finance Pact in Peril, UK Adaptation Report Warning, ICEYE Nat Cat Upgrade, and More

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Developed countries likely fell short of their pledge to double adaptation finance to US$40bn by 2025, with OECD data showing the figure reached just under US$35bn in 2024. 

The shortfall lands as major donor countries including the US, UK, France, and Germany cut overseas aid budgets, making a late surge to reach the target virtually impossible. The OECD said closing the gap would have required close to 20% growth in government adaptation funding in 2025 alone.

The 2021 Glasgow Climate Pact pushed rich countries to double the US$20bn in adaptation finance recorded in 2019 by 2025. While progress has been made from the US$24.6bn recorded in 2021, adaptation has stagnated as a share of total climate finance at around 25%. Climate finance for decarbonization continues to dominate overall flows, accounting for nearly two-thirds of the total last year.

Public financing continues to dominate adaptation flows, with just US$3bn being mobilized by private sources in 2024, barely changed from 2020 — though up from just US$1.1bn in 2021. In terms of sector distribution, finance is fairly evenly distributed with water and agriculture accounting for the largest shares.

Rich nations mobilized a record US$136.7bn in total climate finance for developing countries in 2024 — the third consecutive year surpassing the long-delayed US$100bn annual target

The European Central Bank has warned that physical climate and nature-related risk measurement “are still in their infancy”, meaning the risks are likely being underestimated. The institution has published an updated compendium of good practices for climate and nature-related risk management and stress testing with an eye on improving risk identification and measurement for all banks — big and small — under its jurisdiction. This includes guidance on quantifying climate physical risk and area the ECB says banks typically struggle with. (European Central Bank)

Singapore’s DBS Bank is partnering with the Climate Bonds Initiative to advance adaptation financing solutions across Asia-Pacific. The two institutions will co-develop a flagship research paper mapping investment opportunities in climate adaptation across the region, and DBS will run an internal capacity-building program to entrench adaptation considerations into the workflows followed by relationship managers and assessment teams. (DBS)

Sustainability non-profit Ceres’ annual benchmarking of climate risk disclosure in the US insurance sector finds that while public reporting has become widespread, the depth and quality of disclosures may not be sufficient to inform investors and regulators of their true vulnerability. The analysis of 537 insurance groups’ 2024 disclosures finds that while more than 80% disclose against all four pillars of the Task Force on Climate-related Financial Disclosures (TCFD), less than 11% of these meet the standard for “substantive reporting”. Moreover, disclosure quality across these pillars — Governance, Strategy, Risk Management, and Metrics and Targets – has stagnated over the past four years. (Ceres)

Nature breakdown is underpriced in investment portfolios, ISS STOXX’s Research Institute warned in a new report calling on investors to move beyond climate-only risk frameworks. An analysis of 26 listed companies found more than half of their revenue is dependent on ecosystem services, meaning they are “commercially reliant on nature’s ability to supply raw materials and water”. In addition, asset-level analysis of 306 farm sites under a high-emissions scenario found medium-to-high water stress exposure jumping from 11% of assets in 2030 to 57% by 2050, with high-risk assets concentrated in Southeast Asia. (ISS STOXX)

The UK has to invest £11bn (US$14.8bn) a year to shield itself from rising heat, flooding, and drought risks caused by global warming, the country’s independent Climate Change Committee (CCC) has warned.

In its 554-page assessment of the country’s climate risks, the panel calculates that without adequate climate-proofing, the cost of climate change to the UK economy could rise to between 1% and 5% of GDP by mid-century under a 2°C warming scenario — equivalent to £60bn (US$80.6bn) to £260bn (US$349.4bn) per year. The authors add that climate damages caused today could already be up to 2% of GDP.

The scope and scale of future climate impacts projected by the CCC are vast. By 2050, 92% of UK homes are likely to overheat, peak river flows could be up to 45% higher than today, and water supply shortfalls may exceed five billion litres per day. “The UK was built for a climate that no longer exists today and will be increasingly distant in years to come”, the report reads. 

Among the recommended adaptations highlighted by the CCC are investment in building cooling and retrofitting, flood defense and green infrastructure, water system resilience, and agricultural adaptation. On the finance side, the Committee underlines the need for resilience-linked financial products and clearer corporate disclosure requirements to support adaptation-friendly capital allocation. “We need a new approach to adaptation in our governments to create national adaptation frameworks capable of driving the necessary action,” the authors state.

The assessment lands in advance of the government’s fourth National Adaptation Programme, due for publication in 2028.

The UN General Assembly has formally endorsed the International Court of Justice’s (ICJ) 2025 advisory opinion on states’ climate obligations — making clear that countries have a legal responsibility to shield populations from escalating climate shocks. Member states voted 141-8 to adopt the resolution, with 28 countries abstaining. The dissenters included the US, Saudi Arabia, Russia, Israel, Iran, Yemen, Liberia, and Belarus. While the resolution does not create binding obligations — as ICJ advisory opinions are non-enforceable — its adoption establishes a reference baseline for future loss and damage negotiations and strengthens the hand of small island states looking for assistance adapting to worsening floods, heatwaves, and storms. (Reuters)

Respondents to a consultation on the EU’s new climate resilience framework want authorities to institute mandatory forward-looking risk assessments, harmonized climate scenarios, and resilience-by-design requirements across all public spending and procurement. Nearly 900 responses across two consultation rounds flagged funding access and limited local capacity as the primary barriers to adaptation action. Eighty-seven percent of public consultation respondents said climate resilience must be integrated into fiscal planning at all levels of government. On insurance, 72% supported a European risk-pooling marketplace, with stakeholders calling for public-private risk-sharing mechanisms, parametric-triggered products, and catastrophe bonds to close widening coverage gaps. (European Commission)

Australia’s national science agency is cutting up to a third of the climate scientists who maintain ACCESS-NRI, the southern hemisphere’s only global climate model. The 92 planned job cuts across CSIRO’s environment unit threaten Australia’s ability to model sea-level rise, flood risk, and climate adaptation pathways – and comes off the back of 800 redundancies over the last two years. The cuts land even as the agency receives a A$387.4mn (US$276.3mn) funding boost from the federal government. (ABC News Australia)

Satellite tech firm ICEYE has launched a satellite-based natural catastrophe monitoring service for global banks, offering property-level impact data on floods, wind, earthquakes, and wildfires.

The Finnish-American company is marketing the product against a backdrop of rising mortgage delinquencies and physical property damage in flood- and storm-prone areas. It draws on ICEYE’s synthetic aperture radar constellation — which is able to capture flood extent and depth, wildfire damage, and hurricane and earthquake impact at the building level, and can operate continuously regardless of weather or light conditions. 

Banks can feed the data directly into credit risk models and use it to inform lending decisions and calibrate stress-tests, as well as meet ESG disclosure requirements by demonstrating how physical climate risks are monitored.

The offering also includes a historical catastrophe catalogue, giving lenders a dataset to validate loss models and enhance their assessment of collateral risks against real-world events. 

Spire Global, a provider of space-based data and analytics, has launched an upgraded weather forecasting platform for energy trading desks. Powered by an AI model adept at predicting weather conditions at the three-to-six-week range, the platform aims to support traders managing gas-demand pricing, forward positions, and hedging portfolios. (Spire Global)

Google DeepMind has announced an inaugural accelerator program in the Asia Pacific region, designed to put advanced AI capabilities into the hands of start-ups, research teams, and non-profits tackling climate and energy challenges. Selected participants will receive technical mentorship from DeepMind researchers alongside access to Google’s science AI models. (Google)

Mercury Insurance has invested in BurnBot, a California-based company that makes wildfire-fighting robots for vegetation management and fuel reduction at the wildland-urban interface. As part of the deal, BurnBot and Mercury will work together to explore wildfire risk reduction strategies, starting in California. (Mercury Insurance)

AXA UK is launching a new climate adaptation advisory program catering to small and medium-sized enterprises. In partnership with AXA Climate, the insurance group’s dedicated climate education hub, AXA UK will provide learning modules on climate risk and adaptation tailored to the needs of smaller companies. (AXA UK)

Experience-driven perceptions misalign with assessed heat risk in the United States (Yale Program on Climate Change Communication)

Personal experiences matter for climate action (Nature Climate Change)

Rapid drought-to-flood weather whiplash amplifies climate change governance failure (Nature Water)

Critical dependence of global ocean heat monitoring on the ocean observing system (Nature Climate Change)

Global lake anoxia is projected to intensify under climate change (Communications Sustainability) 

Flood risk, insurance, and housing in the United States (National Bureau of Economic Research)

Physical risk & climate change adaptation and resilience: A curated guide for financial institutions (Glasgow Financial Alliance for Net Zero)

NGFS Note on the economic and financial impacts of extreme weather events (Network for Greening the Financial System)

Thanks for reading!

Louie Woodall
Editor