Daiane Piva of ING argues that physical climate risk is transforming adaptation from a policy afterthought into a strategic imperative. She explains how banks can finance resilience, integrate adaptation alongside mitigation, and strengthen long-term stab
As floods, heatwaves, wildfires, and
storms intensify, physical climate risk is moving from theoretical concern to
financial reality. For Daiane Piva, Global Decarbonization Lead at ING, the
implications are both systemic and immediate.
“Physical climate risks such as
floods, heatwaves, wildfires, and storms are undeniably intensifying and could
significantly reduce global GDP by 2050, even if net-zero targets are
achieved,” she explains.
These risks are complex, non-linear,
and systemic, affecting clients and their assets in unpredictable ways. Because
the stability of clients underpins that of their banks, long-term financial
resilience is directly exposed.
Despite this, financial flows toward
adaptation remain underdeveloped. Piva sees that gap not only as a
vulnerability but as a transformational opportunity. “At ING, we see this not
only as a challenge but as a transformational opportunity,” she says.
Adaptation, she argues, often sits
closer to a company’s core business than emission reduction.
“When a catastrophe strikes, the
impact is immediate: balance sheets suffer, downtime reduces revenues,
reconstruction consumes CAPEX that could have funded growth, and supply chains
face disruptions,” she notes.
Even firms outside the direct impact
zone can experience cascading effects through suppliers in high-risk regions.
This creates new avenues for lending
and product innovation. Financing home retrofits, reinforcing infrastructure,
and integrating resilience measures into existing credit lines can strengthen
business continuity while supporting growth.
Piva highlights that resilience
measures can be embedded into facilities originally designed for energy
efficiency, expanding their scope to include adaptation upgrades.
Elevating adaptation to sit alongside
mitigation requires careful integration. ING’s Terra approach steers
carbon-intensive portfolios toward net zero by 2050.
At the same time, the bank is
exploring how to better embed resilience into its broader strategy.
“Just as we finance the transition to
a low-carbon economy by supporting clients in achieving meaningful emissions
reductions, we can also play a role in helping clients build resilience to
physical climate risks by providing the financing they need,” Piva says.
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