NGFS publishes input paper on integrating adaptation and resilience into transition plans

Building on previous work, including the NGFS Transition Plan Package (2024) and the Conceptual Note on Adaptation (2024), the NGFS was invited to lead the development of this paper, in collaboration with other partners. This input paper aims to inform the G20 Sustainable Finance Working Group’s 2025 priority on scaling up adaptation finance for a just climate transition.

The impact of physical climate risks is already significant and is expected to intensify even in a scenario where emissions are reduced to net zero by 2050. Climate mitigation remains crucial for limiting future damages. At the same time, climate adaptation measures can play an essential role in reducing vulnerability to existing physical risks while providing opportunities for investments. Yet, the practical integration of adaptation into transition planning remains limited, as transition plans tend to focus only on mitigation.

Transition plans can serve as strategic tools for assessing and managing physical risks. This paper leverages the five building blocks of existing transition plan frameworks – governance, foundations, implementation strategy, engagement strategy, and metrics and targets – to assist in incorporating adaptation and resilience considerations. This approach aims to capture the synergies between mitigation and adaptation objectives. The capacities of institutions and the contexts in which they operate vary. Recognizing these differences, the paper proposes a maturity pathway to support both financial and non-financial institutions in developing adaptation metrics and targets as part of their transition planning process. 

An enabling environment by public actors, and strong real economy planning by non-financial institutions, are important to unlock the full potential of adaptation-inclusive transition planning. The NGFS therefore calls on policymakers, supervisors, financial and non-financial institutions, and academics to accelerate their efforts to embed adaptation into transition plans, alongside mitigation actions. 

To read the full version of the input paper on integrating adaptation and resilience into transition plans, please click here.

Sabine Mauderer, Chair of the NGFS and First Deputy Governor of the Deutsche Bundesbank:
“Climate change has significant costs even if we achieve net zero. This underscores the critical need for adaptation measures. One approach is to integrate adaptation into transition plans. In doing so, corporates and financial institutions can better manage risks and identify new opportunities. This NGFS paper provides practical guidance for institutions to make adaptation a central part of their transition plans. By integrating adaptation into transition plans corporates and financial institutions contribute to a more sustainable and resilient economy.”

Sean Carmody, Co-Chair of the NGFS Task Force on Adaptation and Executive Director, Policy and Advice Division, Australian Prudential Regulation Authority: 
“This paper tackles one of the significant barriers to mobilising adaptation finance — the challenge of measuring adaptation and resilience. By introducing a practical maturity model, it offers a clear pathway for setting adaptation metrics and targets that align with institutions' varying ambitions. We hope this will encourage development of climate transition plans that are truly holistic — addressing not just mitigation, but adaptation too.”

Donald Chen, Co-Chair of the NGFS Workstream on Supervision and Executive Director, Banking Policy, Hong Kong Monetary Authority: 
“Transition plans as a useful tool to provide strategic and prudential information have been under the focus of Workstream Supervision over the past few years.  This input paper marks an important milestone of the Workstream by showing how climate adaptation would be equally relevant for transition plans, and how existing frameworks could be leveraged.  It would provide high level guidance with specific examples for institutions to embed adaptation into transition plans.”

This paper benefited from key contributions from the International Transition Plan Network (ITPN), the Sustainable Insurance Forum (SIF), and the CDP. The NGFS is grateful for this fruitful collaboration. 

About the NGFS
The Network for Greening the Financial System (NGFS) was launched at the Paris One Planet Summit on 12 December 2017. It represents a group of central banks and supervisors, which are willing to share best practices and contribute to the development of environment and climate risk management in the financial sector, and to mobilise mainstream finance to support the transition toward a sustainable economy. The NGFS brings together 145 central banks and supervisors and 22 observers. The NGFS is chaired by Sabine Mauderer, First Deputy Governor of the Deutsche Bundesbank, with the support of the Vice Chair, Fundi Tshazibana, Deputy Governor of the South African Reserve Bank and Chief Executive Officer of the Prudential Authority. The Secretariat, headed by Yann Marin, is provided by the Banque de France.
 
For more details, visit the NGFS website, LinkedIn account and X account or contact the NGFS Secretariat at the Banque de France: sec.ngfs@banque-france.fr
Press Office at the Banque de France : +33 (0) 1 42 92 39 00 / presse@banque-france.fr