When it comes to combating climate change, awareness of the need to reduce greenhouse gas emissions is growing day by day, and it has even become the first thing that comes to mind. However, it is crystal clear that this alone is not enough. Today, when we consider the matter in terms of urgency, another concept just as important as reduction is adaptation to climate change. In fact, these are two equally important issues, neither of which can take precedence over the other, because investing in adaptation financing today is an absolute necessity to prevent future losses from escalating. Interventions designed to help not only the various systems people rely on to sustain their daily lives but also natural systems degraded by human activities adapt to climate change are gaining importance.
According to a report published this year by the Climate Policy Initiative, an independent, nonprofit analysis and consulting organization focused on climate policy and, in particular, climate finance, total global climate finance reached approximately $2 trillion in 2024. In contrast, investment in adaptation and resilience remained at just $64 billion and leveled off after increases in previous years.
Isn’t the gap enormous? One of the main reasons for this is that investments in mitigation financing can more easily take on a commercial nature. For this reason, public funding covers the vast majority of the burden in adaptation financing. However, the private sector is also gradually accelerating its investments in this area.
The Most Direct Opportunity in Climate Finance
An increase in the private sector’s adaptation investments is of vital importance under current conditions. Public-sector adaptation financing consists largely of grants and loans, including both concessional and non-concessional types. In particular, debt remains the most widely used instrument in adaptation financing on a global scale.
For this reason, public financing must be used not to replace private financing but to catalyze it. Particularly in adaptation and resilience investments, public resources can reduce the risks facing private capital through tools such as guarantees, risk-sharing, blended finance, capacity building, and project preparation support. In this way, limited public resources can mobilize a larger amount of private investment.
Consequently, closing the adaptation financing gap with private-sector funding appears to be the most direct opportunity for scaling up financing. Indeed, this approach was referenced in the revised “new collective quantitative target” decision adopted at COP29 in Baku.
The private sector possesses both the commitment and the capacity to develop scalable, locally tailored adaptation solutions, particularly in areas where it owns or is dependent on vulnerable assets and infrastructure. Private financing from various commercial actors in both developed and developing countries is of critical importance for closing the financing gap, particularly in the areas of clean energy sources, agriculture, forestry, land use, adaptation, and resilience.
Investments Are Insufficient and Fragmented
The OECD’s April 2026 report, titled “Strengthening the Private Sector’s Contribution to Climate Adaptation,” also recommends that, rather than the private sector replacing the public sector, its investments, technology, innovation, and expertise be mobilized through public policies. The report, which emphasizes that climate adaptation is no longer merely an environmental policy issue for companies but an economic necessity, highlights the inadequacy and fragmented nature of the private sector’s adaptation investments.
According to the OECD, key barriers facing the private sector include a lack of information, insufficient technical capacity, high upfront costs, and difficulties in measuring return on investment. However, the OECD states that despite all these challenges, the private sector should view adaptation not as a cost but as an investment that can increase efficiency. The report emphasizes that the private sector can make significant contributions in areas such as water management, flood and drought forecasting, agricultural risk management, and early warning systems—particularly through artificial intelligence and monitoring systems.
The Financial System Has Great Potential
In fact, the private sector’s contributions to resilience are countless. For example, companies can invest from their own balance sheets to enhance the resilience of their assets, operations, and supply chains. They can also develop resilience-related products and services in line with consumer demand.
The financial system holds significant untapped potential for climate adaptation. Given the scale of its resources and the breadth of its expertise, the private financial sector can catalyze meaningful and transformative climate action for communities, businesses, and natural ecosystems. Although initial investments in adaptation and resilience have been made through financial instruments, frameworks, and metrics, progress remains limited. The sector needs to invest in creating favorable conditions that will support the development of the adaptation and resilience market. However, it is also essential for the public sector to create the conditions necessary for this market to flourish.
On the other hand, despite all these opportunities, we must acknowledge that certain obstacles exist. Limited public-private sector collaboration and rigid regulations are delaying the design, approval, and implementation of projects. Alternatively, limited access to capital and a lack of technical capacity are hindering investments, particularly in developing economies. Furthermore, unpredictable cash flows limit the willingness to invest. Fragmented and largely local projects make it difficult to scale up and complicate cooperation among different actors. For this reason, urgent steps must be taken to transform opportunities for the private sector into scalable solutions.
Hopes Are High in Antalya!
With all these facts on the table and COP31 just around the corner, no clear consensus has yet been reached on adaptation financing and the private sector’s contributions. The UN climate talks held in Bonn, Germany, in June—which also served as a sort of preparation for COP31—yielded limited results, and adaptation to climate change became one of the most contentious issues in the Bonn negotiations. In particular, the parties were unable to reach an agreement on the text regarding the Global Goal on Adaptation (GGA). Yet just last year at COP30, the parties had agreed on a new adaptation finance target as part of “global collective action.”
In Bonn, however, developing and least developed country parties insisted that the goal of tripling climate finance be included in the GGA text. Canada, Norway, and Japan were among the countries that opposed any reference to the tripling target. As a result, no agreement was reached on the GGA. The issue was therefore referred to COP31 under “Rule 16” and carried over to the negotiations in Antalya without any agreed-upon text.
It remains to be seen what outcomes the discussions in Antalya will yield regarding adaptation finance, but making progress on mobilizing the private sector appears to be one of the greatest hopes. We need to address the barriers facing the private sector and amplify the message that adaptation financing has now transcended the level of a mere environmental necessity to become an economic—and potentially financial—opportunity. It is now crystal clear that this is one of the most important and practical ways we can build a more resilient and sustainable world in the face of climate change.
Date: 24 August 2026
