New resource: Introducing just adaptation for institutional investors

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Just adaptation refers to reducing physical risks without shifting those risks onto other people, communities, or future generations, and considering the impacts of both action and inaction.

Why this matters for investors

As climate impacts intensify, adaptation is accelerating. Without a focus on fairness, adaptation can undermine social license, delay projects, and increase systemic risk.

These risks are financially material for investors. Poorly designed or contested adaptation can slow implementation, increase physical risks to assets, and contribute to broader economic instability.

Embedding just adaptation can:

• Improve investment outcomes by supporting more effective and cost-efficient adaptation
• Reduce long-term portfolios losses linked to physical climate and social risks
• Unlock investment opportunities in resilience infrastructure and adaptation solutions
• Strengthen economic resilience, helping protect long-term returns

What this report covers

This paper provides a practical starting point by:

• Introducing the concept of just adaptation and its relevance to investors
• Identifying how adaptation decisions can create or exacerbate social and financial risks
• Outlining how investors can begin to integrate just adaptation into investment processes, stewardship and policy engagement

The report also highlights sectors where just adaptation is particularly critical, including infrastructure, energy, transport, housing, and essential services that underpin community wellbeing.

Key actions for investors

While good practice is still emerging, the report identifies four priority areas for action:

• Integrate just adaptation into investment decision-making, including risk management and due diligence
• Advocate for policy that embeds just adaptation and avoids maladaptation
• Support equitable financing models, including mechanisms that enable investment in underserved communities
• Engage companies to ensure adaptation decisions consider impacts on workers and communities

This report provides a foundation for investors to support fair, effective adaptation, and protect long-term returns.

Download the Resource