National governments in Asia are at different stages of progress in their climate change-related National Adaptation Plans ( NAPs ), and clearer strategies are required to boost private capital involvement in climate resilience projects, according to a recent report.

And, despite increasing awareness of climate risks – such as flooding, heat stress and water shortages – many countries still lack the transparency and policy conviction needed to give investors’ confidence, finds the Financing Asia’s National Adaptation Plans report by the Asia Investor Group on Climate Change ( AIGCC ), which evaluates the climate adaptation plans of nine Asian markets – China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, South Korea and Thailand – against key investor expectations.

Public funding alone is insufficient, the AIGCC report reveals, and unlocking billions in private finance will require governments to:

• Adopt clear roadmaps
• Make climate risk data widely accessible
• Engage directly with investors.

The lack of a structured pipeline of investable adaptation projects, the report notes, is a key area of concern. And, while China and Indonesia have taken steps towards defining public-private partnerships for adaptation initiatives, other markets remain behind in articulating actionable strategies.

Meanwhile, climate risk disclosure regulations remain inconsistent, the report points out, with only a few nations – China, Japan and South Korea, among them – moving towards alignment with International Sustainability Standards Board guidelines.

Greater policy clarity

Better data infrastructure is needed, the report underscores, adding that while platforms like South Korea’s vulnerability assessment tool to build climate change adaption plan ( Vestap ) and Japan’s climate change adaption information platform ( A-Plat ) have been useful in providing climate risk insights, other markets have yet to develop similar tools, leaving gaps in risk assessment at the sectoral and local levels.

“To significantly boost adaptation finance in Asia, we need clear risk assessments, project opportunities and defined roles for private capital,” says Eric Nietsch, the head of sustainable investing for Asia at Manulife Investment Management and the co-chair of the AIGCC’s physical risk and resilience ( PRR ) working group. “NAPs are bridging these gaps, and we are committed to continuing to work on mobilizing the necessary funds to support these measures.

“Investors are interested in investing in adaptation and resilience projects that will also bring long-term value to their beneficiaries, and sound adaptation strategies at the national level are crucial to progress this.”

The private sector stands ready to finance adaptation and resilience projects, notes Rebecca Mikula-Wright, the AIGCC’s CEO, provided there is greater policy clarity. “Governments that provide clear adaptation strategies and work closely with private sector stakeholders will be able to mobilize capital far more effectively.”

Therefore, governments across Asia, the AIGCC argues, should increase collaboration with investors, enhance data transparency and develop clear adaptation finance mechanisms; and, without these improvements, private capital will remain underused, leaving many climate resilience projects stalled.