On 14 November 2024, the Network for Greening the Financial System (NGFS) published a Conceptual Note on Adaptation and a Synthesis Report on the greening of the financial system.

Conceptual Note

The Conceptual Note is the first comprehensive exploration by the NGFS of climate adaptation and its implications for financial stability. It highlights the importance of integrating adaptation into risk

management, promoting adaptation finance and bridging insurance protection gaps, for both developed economies and Emerging Markets and Developing Economies.

The Conceptual Note begins with a presentation of the costs and benefits of adaptation (Section 1) and then describes the importance of adaptation as a form of risk management for the financial system and society more broadly (Section 2). It explores the challenges facing efforts to scale up adaptation financing (Section 3). It then outlines considerations for future work to be conducted by the NGFS, central banks and supervisors (Section 4). Several national case studies are included to showcase specific actions being taken by regulators, both individually and in collaboration with other public and private sector groups (Annex).

The Conceptual Note outlines four specific areas of interest for central banks and supervisors that lay the groundwork for future NGFS initiatives, with the aim of identifying good practices and developing recommendations and guidelines:

  • The role of metrics and tools for better measurement and disclosure of adaptation.
  • Exploring the need to enhance policy, supervisory and regulatory frameworks.
  • Fostering an enabling environment for adaptation finance.
  • Collaborating at the international level, with actions focused on local considerations. 

Synthesis Report

The Synthesis Report consolidates key publications and findings that help assess the progress on greening of the financial system and aligning the financial sector with global climate goals. It examines the readiness of financial institutions and the contribution of regulatory bodies, highlights gaps and challenges, and proposes actionable recommendations to advance towards a greener

financial system.

It assesses three key areas to provide an overview of the evolution of the financial system in its journey to reach the Paris objectives. Each area constitutes one of the three foundations that are necessary to build a greener financial system: 1) developing a common understanding of what climate goals mean for finance and the progress made on the provision of finance aligned with  those goals; 2) scaling up the relevant market instruments and strategies, and 3) establishing regulatory and supervisory frameworks that foster and enable an ecosystem for an effective and just green transition.