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Case study

ADB scales up the integration of physical climate risk management into its operations

Recognizing the vital importance of strengthening resilience of communities, ecosystems and economies in its developing member countries (DMCs) in delivering sustainable and inclusive socioeconomic development in a changing climate, ADB formalized a climate risk management framework in March 2014 to guide efforts in managing physical climate risks in its investment.
Key points
  • The alignment of physical climate risk management activities with the key milestones within the investment project cycle is key for climate risk management to be effective.
  • With the awareness on climate risks increasing, and experiences for risk screening and assessment accumulate within the institution, the need for technical support to strengthen climate risk management shifts towards practical guidance and advice on structural and non-structural interventions that investment projects could integrate to address physical climate risks.
  • As physical climate risks and associated risk management solutions are highly context specific, there is a growing need for more tailored, project-level technical support in designing and assessing climate risk management options.
  • Efforts to strengthen climate resilience need to go beyond “climate proofing” existing development investment projects and to include investments that are predicated on the need to address physical climate change impacts as an emerging risk to sustainable and inclusive development.