The European Investment Bank invested €18bn in climate action, of which €16bn in the EU (30% of its overall lending), with a growing amount dedicated to climate-resilient projects that improve adaptation to climate change impacts. Climate change considerations are mainstreamed in all EIB sectoral policies and integrated into all operational activities. They are also systematically included in all EIB project appraisals to make the Bank’s lending portfolio across all sectors more climate-friendly.
The European Bank for Reconstruction and Development has a special mandate to promote the transition to market economies, investing in private sector projects that have a transition impact only. Climate change considerations are mainstreamed in project appraisal and climate resilience is considered both in terms of risks and business opportunities as far as it has transitional impact.
The European Commission has started involving Commercial banks so as to better understand current practices on integration of climate change adaptation in their activities.
Insurance can be a valuable tool for adaptation in three main ways: helping to manage climate change risks; providing incentives for risk prevention; and providing information on risk (Courbage and Stahel, 2012). The insurance sector is arguably the most advanced in evaluating risks and opportunities. Major adaptation initiatives in the insurance sector, to date, have focused around building institutional networks that address the common risks to the industry through collaboration. It is likely that the insurance sector leads in this area due to its vulnerability, but also because of its historical experience in risk management and climate-related risks.
The Commission is preparing a paper on the prevention and insurance of disasters, foreseen for adoption in 2013. A stakeholders' involvement process would then follow, with the objective of identifying good practice in the EU and detailing the need for additional information at EU level. The objective is to ensure that insurance, both as a sector and as an instrument for adaptation, provides the adequate incentives for investments and business decisions so as to secure the long-term resilience and competitiveness of the EU's economy. Efficient market functioning would ensure that the potential costs associated with increased insurance premiums in vulnerable areas would be outweighed by the avoided losses in case of natural disasters.