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Welcome to the second edition of the Cadlas Quarterly Newsletter! Each edition will provide valuable insights into the latest trends and developments in climate resilience finance, covering topics such as sustainable bonds, climate resilience taxonomies, and more. This newsletter is also an excellent way to stay up-to-date on the Cadlas team and our work!

In vulnerable developing countries, private investment in climate adaptation falls short of needs due to barriers like limited climate data, unclear impact metrics, and a lack of collaborative frameworks. The Climate Adaptation Innovation Learning (CAIL) project tackles these issues by fostering innovation and private sector engagement, connecting financial stakeholders in climate-vulnerable regions through three Communities of Practice (CoP).

Cadlas is pleased to serve as the technical partner for the Climate Change Adaptation Information Flows & Impact Measurement CoP, which focuses on consolidating and enhancing the understanding and use of climate-related information flows, empowering the financial sector to make scalable, impactful adaptation investments.

CAIL is financed by the Global Environment Facility and implemented by the UNIDO in partnership with Climate-KIC, Global Adaptation & Resilience Investment Working Group (GARI)  and United Nations Environment Programme Finance Initiative (UNEP FI). 

Cadlas is especially proud to see Barbados at the forefront of implementing innovative climate finance solutions for climate resilience such as the world’s first debt-for-climate swap. Supported by the Inter-American Development Bank, the European Investment Bank and commercial banks, this transaction swaps Barbados’ sovereign debt for more affordable financing, unlocking $125 million in fiscal savings which will be used to enhance water security and climate resilience.

Cadlas has previously collaborated with the Inter-American Development Bank on sustainability-linked sovereign debt instruments. This explored how sovereign debt management can be aligned with national climate resilience priorities and outlined a model for climate resilience performance measurement and target-setting. We are thrilled to see these ideas in action, paving the way for other climate-vulnerable nations to enhance resilience.

The financial sector is increasingly recognizing the emerging opportunities tied to climate adaptation and resilience. While progress has been made in improving the level of private sector investment, much more is needed to create the enabling conditions for a thriving adaptation and resilience market.

Cadlas is proud to have contributed to the development of the ‘Call for Collaboration’ recommendations, formulated during roundtable discussions hosted by the Atlantic Council’s Climate Resilience Center and the High-Level Climate Champions with public and private sector stakeholders. These recommendations outline six key actions to create enabling environments for mobilizing private finance for adaptation and resilience.

The potential for sustainable bonds to support the scaling up of financing for climate resilience took a major step forward in November, when the state of California approved a proposition for a USD 10 billion bond issuance to raise finance for responding to the impacts of climate change. These funds will be used to raise finance for investments that build resilience to a range of climate change impacts that California faces – many of which were brought into sharp focus through the devasting wildfires that destroyed thousands of homes in the Los Angeles area during January 2025.

While the bulk of the funds (USD 3.8 billion) will go towards water sector investments such as improving water quality, coping with floods and droughts, and the restoration of freshwater bodies such as rivers and lakes, a number of other climate resilience priorities are also covered. These include allocations of USD 1.95 billion for coping with wildfires and extreme heat, USD 1.9 billion for protecting natural habitats and wildlife, and USD 1.2 billion for coastal and marine protection, as well as funding for clean energy and agricultural projects.

Introducing Resilience Unpacked, Cadlas’ insight blog series providing an in-depth exploration of key topics in climate resilience financing. This first instalment will focus on national platforms and their role in mobilising finance for climate resilience.

National platforms for climate action are increasingly being recognised as important mechanisms for advancing national climate adaptation goals. These government-led partnerships foster collaboration among development partners and other stakeholders, aligning efforts with a shared strategic vision and national priorities. These platforms are essential for mobilising and directing finance towards investments that align with national adaptation and resilience priorities, fostering both focus and a sense of ownership over these priorities.

Read more here to learn how these platforms can help to mobilise finance for adaptation by bridging the gap between high-level national adaptation plans and financeable investments.

In a recent interview with Responsible Investor, Cadlas CEO Craig Davies highlighted the importance of clear, widely recognised definitions of adaptation and resilience, such as those outlined in the Climate Bonds Resilience Taxonomy (CBRT), in attracting private investment to the space. By specifying what qualifies as an adaptation activity, the CBRT seeks to empower bond issuers to design innovative financial instruments that inspire investor confidence. Davies also expressed his optimism that the CBRT would play a pivotal role in boosting private sector engagement in financing climate adaptation and resilience initiatives.

Welcome to the first edition of the Cadlas Quarterly Newsletter! Each edition will provide valuable insights into the latest trends and developments in climate resilience finance, covering topics such as sustainable bonds, climate resilience taxonomies, and more. This newsletter is also an excellent way to stay up-to-date on the Cadlas team and our work!

The launch of the Climate Bonds Resilience Taxonomy (CBRT) in September 2024 marks a significant advancement in climate resilience financing.

This initiative provides a clear vocabulary for these investments, fostering collaboration among investors, issuers, regulators, and policymakers.

The CBRT builds upon Climate Bonds’ extensive experience of taxonomy development and extends their existing Climate Bonds Taxonomy into the increasingly urgent, but comparatively under-funded, area of climate resilience.

Cadlas is proud to be the Lead Technical Partner on this ground-breaking initiative, having worked closely with Climate Bonds since 2022 to bring in our extensive, practical experience of climate resilience financing.

Cadlas CEO Craig Davies shared Cadlas’ perspectives on the role of the financial sector in supporting private sector action on climate adaptation as part of a Climate Adaptation Week organised by the United Nations Industrial Development Organisation (UNIDO) on 14-15 October. Building climate resilience is absolutely central to UNIDO’s core mission of inclusive and sustainable industrial development.

In addition to securing its own climate resilience, the industrial base also has a vital role to play in delivering the solutions and innovation that is urgently needed to build a climate-resilient economy at scale.

Cadlas recently made significant contributions to the Asian Development Bank‘s Climate Adaptation Investment (CAIP) Forum in Manila, connected to our ongoing work with the ADB on this topic. Our Senior Specialist in Climate Resilience, Noah Wescombe, delivered a key presentation on climate resilience bonds, showcasing Cadlas’s role as the Lead Technical Partner in developing the Climate Bonds Resilience Taxonomy. This presentation marked a crucial step in connecting climate adaptation to tangible investment modalities, generating substantial interest among forum attendees.

In addition to presenting, Cadlas actively participated in technical discussions and led an investment planning clinic with the representatives of national Armenian delegations. This engagement provided valuable insights into structuring sustainability-linked loans and highlighted the necessary enabling environments for scaling such products. Cadlas’s involvement underscored our expertise in climate resilience financing and our commitment to advancing practical solutions for adaptation investments across diverse national contexts.

The financial sector needs improved information on climate change adaptation to direct funds toward investments that enhance the real economy’s climate resilience.

Cadlas is delighted to be working alongside an impressive array of partner organisations including UNEP-FI, UNIDO, Climate-KIC and the Global Adaptation and Resilience Investment (GARI) group to implement this important GEF project. In particular, Cadlas is providing technical support to UNEP-FI on climate change adaptation impact measurement and information flows over 2024-25.

From discussions about transition planning to the challenges with achieving interoperability between taxonomies and innovative models for scaling up finance for resilience, Climate Bonds CONNECT 2024 was filled with valuable insights and impactful discussion sessions around adaptation and resilience.

From discussions about transition planning to the challenges with achieving interoperability between taxonomies and innovative models for scaling up finance for resilience, Climate Bonds CONNECT 2024 was filled with valuable insights and impactful discussion sessions around adaptation and resilience.

In a recent interview with Environmental Finance, Cadlas CEO Craig Davies highlighted that while interest and momentum around adaptation-themed sustainable bonds is growing, significant investment opportunities are still being overlooked. Despite a substantial increase in bond issuances in recent years, actual allocations to adaptation and resilience investments remain low. In particular, he pointed out an almost pervasive misalignment between adaptation strategies and eligible investments at the sub-sovereign level within sustainable bond frameworks.

As investors continue to recognize the revenue-generating potential of these investments, Davies emphasized the need for a clear taxonomy to enhance market understanding of adaptation and resilience.

Cadlas CEO, Craig Davies, recently joined the Climate Proof podcast to discuss the current state of financial regulation related specifically to adaptation and whether targeted regulatory development could potentially help mobilities capital for adaptation.

Within the last decade, financial regulators across the globe have begun to enforce mandatory climate-related disclosures on companies and financial institutions including rules on “green funds” labelling. However, despite this increased regulatory action, adaptation and resilience have been largely neglected.