Collaboration to Drive Greater Adaptation Finance Against Climate Hazards in ASEAN

The world is changing, and we all must adapt. The climate crisis is among the most complex issues we have faced in recent years, whose cascading impacts exacerbate other challenges as well. Adapting to improve our resilience against the crisis requires substantial financing—yet another issue we must address. In an effort to bridge the financing gap, several organizations have announced a collaboration to foster better adaptation finance in the ASEAN region.

The Cost of Adapting

In 2024, we experienced what may have been the hottest year on record so far. Rising global temperatures are one of the many impacts of climate change, which can worsen if insufficient action is taken to halt the crisis.

Some regions have already suffered from extreme heatwaves, drought, and food insecurity that disrupt their daily lives. Other areas experienced rising sea levels and flooding, affecting the livelihoods of thousands. These climate impacts strike the hardest in developing and vulnerable countries, and disproportionately affect women, children, people with disabilities, and other vulnerable groups in them.

Adapting to the crisis is crucial for minimizing damage and enhancing resilience. Implementing multi-hazard early warning systems and preserving ecosystems, for instance, can foster better preparation and protection against climate-induced disasters.

However, a significant gap in adaptation finance hinders climate adaptation. Adaptation finance refers to the fund that goes into helping communities reduce risk and harm from climate hazards. UNEP’s Adaptation Gap Report 2024 states that developing countries need between 215 billion USD and 387 billion USD annually by 2030 to meet their climate adaptation needs. However, only around 21.3 billion USD is currently available each year.

The report further states that while the finance flows increased to 27.5 billion USD in 2022, thanks to the fulfillment of the Glasgow Climate Pact goal, bridging the substantial gap in adaptation finance will require increased efforts, such as mobilizing additional financial resources and shifting from reactive to anticipatory financing mechanism.

Driving Adaptation Finance in ASEAN

Accelerating crisis calls for greater adaptation finance. In June 2025, the United Nations Environment Programme Finance Initiative (UNEP FI), the ASEAN Capital Markets Forum (ACMF), and the Sustainable Finance Institute Asia (SFIA) announced a collaboration aimed at driving greater adaptation finance in ASEAN.

The collaboration aims to develop a regional adaptation guide that identifies critical activities and measures for better adaptation and stronger resilience against climate-induced hazards. The guide will complement and enhance the ASEAN Taxonomy, which aims to classify financial activities that support climate and environmental commitments. It is a way to identify how financial services can build resilience against climate disasters and benefit society and the economy in the process.

“Sustainable finance taxonomies are key in providing a common language for this. A regional adaptation-focused guide has great potential to enhance the ASEAN Taxonomy and direct capital toward investments that strengthen climate adaptation,” said Laura Canas da Costa, Global Policy Co-Lead at UNEP FI.

Furthermore, the initiative aims to develop a guide for the mitigation co-benefit and Adaptation for Resilience (mARs) to enhance the ASEAN Taxonomy as well. The mARs guide can help identify potential positive impacts on other objectives, such as the economy and health, that arise from implementing adaptation measures for one goal.

Addressing Causes

While adaptation is essential, we must also hold accountable those with significant contributions to greenhouse gas emissions, from widespread fossil fuel usage to armed conflicts. Key stakeholders in governments and businesses, in particular, must translate their climate commitments into concrete actions that do not harm people and the environment. Ultimately, addressing the causes of the climate crisis will help ease the adaptation burden and build a safer world for all.

Editor: Nazalea Kusuma

Kresentia Madina

Reporter at Green Network Asia | Website | + posts

Madina is the Assistant Manager for Digital Publications at Green Network Asia. She graduated from Universitas Indonesia with a bachelor's degree in English Literature. She has three years of professional experience working on GNA international digital publications, programs, and partnerships particularly on social and cultural issues.