Driving a Sustainable Future - Time to Prioritise Adaptation and Resilience as we Address an Evolving Global Climate

Entering the second half of the year offers a good opportunity to reflect on our ever-evolving climate and the need to talk more about how we are adapting to changes which are indisputable. Importantly, we need to talk about how we move forward in finding innovative financing solutions to build resilience in our communities.

According to the World Meteorological Organization (WMO) “State of the Climate in Africa 2024” report, our continent has been, and will continue to be, disproportionately affected by climate change and the associated high costs required to fund essential climate adaptation and build resilience. The same report highlights that costs associated with climate change can be as much as 5% of African Gross Domestic Product (GDP) and many are allocating up to 9% of their annual budgets to respond to climate extremes.

It is therefore essential that the public and private sectors shift their focus and prioritise adaptation and resilience, alongside mitigation. We need to continue to focus on climate mitigation projects in order to slow down or minimise negative impacts of climate change through, for example enabling and funding cleaner energy sources and decarbonisation activities.

However, we equally need to consider how we reduce vulnerability to the negative impacts of climate change. This is what is referred to as climate adaptation finance and includes investments in climate smart agriculture such as drought resistant crops or improved water management, investment in resilient infrastructure like flood defences and early warning systems, energy storage systems and development of resilient buildings. Financing these activities improves resilience of economies and communities to floods, drought and other extreme weather events.

We have a collective and urgent responsibility to prioritise and find innovative ways to fund adaptation and integrate strategies that prepare us to be resilient.

This is a core part of my team’s daily focus. I recently participated in two conferences held in Cape Town in June, the 2025 SADC Sustainable Finance Forum and a Group of 20 (G20) engagement on adaptation and resilience. Both of these forums made it clear that addressing climate-related impacts and specifically prioritising adaptation and resilience are both a moral and business imperative.

Based on various reports, including the Emerging Economies Climate Report of 2023, the business cost associated with climate change for Africa is undisputable. According to the above report, 79% of respondents said climate change is impacting their organisation today, up from 68% in 2022, with flooding, drought and heat noted as the top physical risks.

Business and finance need to invest in our assets, infrastructure and communities to ensure we can better withstand these risks. This is not, however, an easy call to action. There are many challenges that exist in scaling up financing for adaptation and resilience. These include, but are not limited to, a lack of clear revenue streams, insufficient and inaccurate data, a lack of expertise, limited resources in low-income countries to fund these projects, and the difficulty in accurately measuring and valuing the impact of these projects.

Thus, it is incumbent on players in the finance sector to develop solutions that can provide tangible solutions and meet business requirements. Among some of the newer thinking in addressing financing gaps are initiatives such as using revenue streams from carbon credits or from associated ecotourism to fund adaptation projects. Similarly, blended finance solutions are essential in bringing together multiple players with differing risk appetites and mandates to fund some of these critical projects that may not be commercially bankable on a standalone basis, and index based (parametric) insurance can be applied to mitigate physical risks.

In the famous words of W. Edwards Deming, “in God we trust. all others must bring data”. While adaptation is a relatively new concept for many governments, real economy firms and financial institutions, data will be a foundational building block for any adaptation strategy. Better data, modelling tools, and geolocation data will be essential for comprehensive solutions.

Corporate and financial institutions have the potential to include adaptation considerations into strategy setting and targets, though this remains a nascent consideration. We will need a measure of boldness and visionary leadership to drive a step-change in conventional business considerations.

In pursuit of an integrated considered approach and to paraphrase a famous French philosopher, Voltaire, “we should not let perfect be the enemy of the good”. As most readers will know, South Africa holds the presidency of the G20 this year and is effectively using the global convening platform to drive key initiatives that make adaptation a norm rather than an exception.

At Standard Bank, we believe in embracing a balanced approach in creating solutions to existential challenges. This balance requires cross-societal responses that include the private sector, public sector and civil society to ensure a sustainable future.

In April this year, we announced a revised target to mobilise more than R450 billion of sustainable finance by 2028. As at end of 2024, we had already mobilised R177 billion, since 2022. Our green and social mobilisation sub-targets include adaptation and resilience financing activities such as basic infrastructure, essential services, and biodiversity conservation in addition to sustainable farming.

We have also funded some of the largest battery energy storage system (BESS) projects across Africa to the tune of approximately R12 billion. BESS projects improve the resilience of the national grid and improve access to energy for communities.

Standard Bank has also published a target to finance more than R7bn in climate smart agricultural practices by 2030 with more than R2bn financed in 2024 alone. With almost 40% of land in Africa dedicated to agriculture, this sector is a critical custodian of our valuable natural habitat – which is a valuable asset requiring investment in order to drive adaptation and enhance resilience.

Multilateral organisations and forums also have a key role to play in driving systemic and behavioural changes. The scale of the challenge is too big for any one participant to solve alone. Gatherings like COP30, G20, and SADC Sustainable Finance Forum (among others) must serve as catalysts for innovation, action and target-setting.

It is crucial for African countries to make our voices heard in these forums, given the scale of the challenges faced by our continent.

We have the opportunity to make a lasting difference. We cannot fail to meet this challenge, lest we put future generations at risk.