Opportunities to integrate disaster reduction risk and climate resilience into sustainable finance

This report sets out recommendations on how the main sustainable finance initiatives underway can support a major reduction in disaster risk. 

The scale of financial flows and investments is massive. In Europe assets under management reached €25.2 trillion in 2017, 147% of GDP1 . And sustainable investment is growing fast – Blackrock, the world’s largest fund manager, has forecast that the total share of sustainable investments in Exchange Traded Funds globally will increase from today’s 3% of total assets, to 21% of all assets by 20282.

However, most global investments still fail to take disaster and climate-related risk into account. There is a long way to go in ensuring that these risks are understood and integrated into investment decisions, and that financing for prevention and recovery takes place where it is needed and in an equitable way. 

This report sets out recommendations on how the main sustainable finance initiatives underway can support a major reduction in disaster risk. The authors considered physical climate risk together with disaster risk caused by natural hazards. The analysis builds on insights from 35 stakeholders from the private, public and non-profit sectors as well as the European Commission, gained at a workshop in Brussels which was organized by UNDRR and E3G in March 2019.