Our New partnership signals growing focus on climate resilience investment across Asia-Pacific. According to estimates cited by DBS, global adaptation and resilience efforts could require more than US$365 billion annually by 2035.
Singapore banking giant DBS has partnered with the Climate Bonds Initiative to develop new financing approaches for climate adaptation and resilience projects across Asia-Pacific, as governments and investors confront the escalating economic costs of climate change.
The agreement, announced during Ecosperity 2026 last week, reflects a growing shift in global climate finance away from focusing solely on emissions reduction toward preparing economies and communities for worsening physical climate impacts.
The move comes as climate-related disasters including floods, rising sea levels, extreme heat and stronger storms increasingly threaten economic stability across Asia, one of the world’s most climate-vulnerable regions.
RELEVANT SUSTAINABLE GOALS
Climate Adaptation Funding Needs Continue to Outpace Available Capital
Unlike climate mitigation projects, which focus on cutting greenhouse gas emissions through renewable energy and clean technologies, adaptation investments are designed to reduce vulnerability to climate impacts.
These projects include flood barriers, heat-resilient buildings, water management systems and climate-resilient agriculture.
Yet despite growing urgency, adaptation financing has historically lagged behind mitigation funding because many resilience projects generate value primarily by preventing future economic losses rather than producing immediate and predictable returns.
According to estimates cited by DBS, global adaptation and resilience efforts could require more than US$365 billion annually by 2035.
That estimate broadly aligns with projections from the United Nations Environment Programme, which has warned that developing countries may need between US$310 billion and US$387 billion annually for adaptation by 2035, while current financing remains significantly below those levels.
Asia Faces Intensifying Climate Risks
The financing challenge is especially acute across Asia-Pacific.
The region combines densely populated coastal cities, rapidly expanding urban infrastructure and heavy reliance on climate-sensitive sectors such as agriculture, making it particularly vulnerable to climate disruption.
“As the effects of physical climate risks grow in scale and frequency, the need to help businesses and communities adapt to better withstand climate shocks is becoming more urgent,” said Kelvin Wong, chief sustainability officer at DBS.
“This is especially true for Asia which is one of the most climate vulnerable regions in the world,” he added.
Research by the Asian Development Bank has estimated that climate change could reduce developing Asia’s GDP by as much as 17 per cent by 2070 under a high-emissions scenario if countries fail to strengthen resilience and climate action.
The economic consequences are increasingly becoming a major concern for financial institutions as climate-related losses evolve from environmental problems into direct financial and credit risks.
Financial Institutions Shift Toward Resilience Investing
Sean Kidney, chief executive of Climate Bonds Initiative, said resilience financing is becoming critical to economic stability.
“Financing resilience investment has become critical to avoid derailing economies and increasing default risk,” Kidney said.
“The opportunities for productive investments are enormous.”
As part of the partnership, DBS and CBI will jointly produce research examining adaptation and resilience investment opportunities across Asia-Pacific, particularly in sectors such as energy and real estate.
The collaboration also aims to strengthen the banking sector’s internal capacity to assess climate-related physical risks in lending and investment decisions.
DBS said it will introduce internal programmes to help relationship managers and assessment teams integrate adaptation and resilience considerations into financing activities.
Why Adaptation Projects Remain Difficult to Finance
One of the central challenges highlighted by the partnership is the difficulty of financing adaptation projects under traditional banking and investment models.
Shilpa Gulrajani, head of sustainable finance at DBS’ institutional banking group, said many adaptation investments do not fit conventional financial structures because they are designed around avoiding future losses rather than generating direct revenues.
“Unlike mitigation projects, which typically generate clear and predictable cash flows, many adaptation investments are centred on loss avoidance,” Gulrajani said.
“This makes them inherently more challenging to finance using conventional approaches.”
As climate impacts intensify globally, financial institutions are increasingly being forced to rethink how they value resilience and long-term risk reduction.
Adaptation Finance Moves to the Centre of Climate Strategy
For years, global climate finance discussions were dominated by mitigation projects such as renewable energy, electric vehicles and carbon reduction technologies.
But policymakers and investors are increasingly acknowledging that adaptation can no longer remain secondary, particularly in highly exposed regions like Asia.
Climate shocks are already disrupting supply chains, damaging infrastructure, straining public finances and threatening food and water security across many Asian economies.
The DBS-CBI partnership reflects a broader recognition within financial markets that adaptation is not simply an environmental issue, but an economic and financial imperative.
As governments across Asia face mounting pressure to protect cities, industries and communities from worsening climate impacts, adaptation finance is emerging as one of the fastest-growing and most strategically important areas of sustainable investment.
