Singapore banking group DBS has partnered with the Climate Bonds Initiative (CBI) to develop financing approaches for climate adaptation and resilience in Asia-Pacific, as governments and financial institutions increasingly focus on the economic costs of climate change.
The agreement, announced on the sidelines of Temasek’s sustainability event Ecosperity 2026 last week, came as policymakers and investors increasingly shift attention towards helping economies cope with severe physical climate impacts including floods, extreme heat, rising sea levels and stronger storms.
Unlike climate mitigation efforts, which focus on reducing greenhouse gas emissions through projects such as renewable energy, adaptation investments aim to reduce vulnerability to climate impacts through measures such as flood barriers, heat-resilient buildings, water management systems and climate-resilient agriculture.
Adaptation financing has historically lagged behind mitigation funding because many projects generate value by preventing future losses rather than producing immediate and predictable revenue streams.
According to estimates cited by DBS, adaptation and resilience efforts could require more than US$365 billion annually by 2035.
That broadly mirrors estimates from the United Nations Environment Programme (UNEP), which has warned that developing countries may require between US$310 billion and US$387 billion annually for adaptation by 2035, while available financing remains substantially lower.
The challenge is particularly acute in Asia, one of the world’s most climate-vulnerable regions due to densely populated coastal areas, heavy reliance on agriculture and rapidly expanding urban infrastructure.
“As the effects of physical climate risks grow in scale and frequency, the need to help businesses and communities adapt to better withstand climate shocks is becoming more urgent,” said Kelvin Wong, chief sustainability officer at DBS.
“This is especially true for Asia which is one of the most climate vulnerable regions in the world.”
Research by the Asian Development Bank has estimated climate change could reduce developing Asia’s GDP by as much as 17 per cent by 2070 under a high-emissions scenario if countries fail to strengthen climate action and resilience measures.
Climate-related losses have increasingly moved beyond environmental concerns to become economic and financial risks for lenders and investors.
“Financing resilience investment has become critical to avoid derailing economies and increasing default risk,” said Sean Kidney, chief executive of CBI, a non-governmental organisation mobilising global capital for climate action.
“The opportunities for productive investments are enormous.”
As part of the partnership, DBS and CBI will jointly produce research examining adaptation and resilience investment opportunities across Asia-Pacific in sectors including energy and real estate.
DBS will also introduce internal programmes designed to help relationship managers and assessment teams integrate adaptation and resilience considerations into lending and investment decisions.
Shilpa Gulrajani, head of sustainable finance at DBS’ institutional banking group, said many adaptation projects remain difficult to finance under conventional approaches.
“Unlike mitigation projects, which typically generate clear and predictable cash flows, many adaptation investments are centred on loss avoidance,” she said.
“This makes them inherently more challenging to finance using conventional approaches.”
