Climate Adaptation, Resilience, and Financial Inclusion: A New Agenda
Financial inclusion can play a critical role in enabling autonomous adaptation and building grassroots resilience to climate change. Building resilience against the devastating effects of a warming climate is impossible without access to savings, lending, payments, and insurance solutions that help households and businesses to prepare for, cope with, and recover from increasingly intense and unpredictable climate shocks and stresses. Financial inclusion can hence bolster climate resilience in low-income communities that are the least responsible for climate change emissions yet tend to be more exposed and vulnerable to their effects. Access to the right financial services can be particularly important in empowering women and girls, who, as a group, often play a critical role in the adaptation and resilience of communities but are more exposed and vulnerable to climate risk as well as more excluded from the tools needed to manage it.
By enabling the poorest and most vulnerable people to pursue their own resilience strategies, an inclusive financial system is a fundamental enabler of adaptation and an absolute necessity for a just transition. It should be a cornerstone of action on climate adaptation. This study is therefore outlining a new agenda for global collaboration on financial inclusion, climate adaptation, and resilience.