a woman pulling her floating belongings behind her on a flooded road Photo by Sandipani Chattopadhyay, 2017 CGAP Photo Contest

Climate Resilience

People living in poverty are the most susceptible to climate change, and are the least well equipped to respond. This is especially true for women, who face greater exposure and higher vulnerability to climate impacts, yet they have fewer tools and strategies available to them to adapt. 

An inclusive financial system empowers vulnerable people to pursue their own resilience strategies, making it a fundamental enabler of autonomous, grass-roots adaptation and an absolute necessity for a just transition.

Financial inclusion is inherently about serving clients who are risky and costly. As climate change makes already vulnerable clients riskier still, financial service providers will find it increasingly hard to keep serving them. Financial service providers are themselves vulnerable to climate risk, which some already struggle to cover. Efforts to manage climate risk and ‘green’ the financial system could unintentionally contribute to greater exclusion.

Thoughtful policy responses can help to create a virtuous cycle of growing inclusion, falling climate risk, and greater financial stability (see illustration below). But more financial inclusion won’t automatically bolster climate resilience. Business cases may be harder to build for adaptation finance than traditional lending, and financial services carry risks which could become part of the problem.

diagram of a virtuous cycle

Most financial service providers don’t yet see climate adaptation as a top priority for their clients. Some cite a lack of data, expertise, and demand. The product landscape is very narrow and centered on agriculture, particularly weather index insurance.

Much can be done to enable, catalyze, and scale financial products and services. But large risks to millions of poor people will realistically never be covered by markets. Social  protection programs are needed for vulnerable populations, including for slow-onset risks and long-term resilience building.

The financial inclusion and climate communities must learn to work on climate, financial inclusion, and gender in more integrated ways. With the right policy, regulatory, and financial support from governments and investors, financial service providers must innovate to better serve the climate adaptation needs of their more vulnerable clients, developing and testing financial solutions that better respond to the diverse resilience needs of customers. 

CGAP is currently working to:

  • Distil best practice for financial service providers on how to better prepare for and respond to extreme climate events;
  • Define the features and combinations of financial products that best support the climate resilience needs of vulnerable clients; 
  • Drive innovation of financial solutions to better meet the climate needs of underserved clients; 
  • Provide advice to policymakers, including on mobilizing the private sector to extend their commercial climate risk management and adaptation solutions to more vulnerable populations;
  • Demonstrate how financial services can help social protection systems build better long-term resilience to climate shocks and stresses.


Featured Videos

Featured Publications


Rural women are critical to ensuring global food security but disproportionately vulnerable to climate change. In this working paper, CGAP and Mercy Corps AgriFin provide an overview of 10 opportunities for service providers, investors, and donors to improve rural women’s climate resilience and share examples of innovative business solutions.
Reading Deck

This deck explores three personas of rural women and their distinct customer journeys through product and service engagement. It aims to provide a deeper understanding of the challenges and opportunities rural women face—including in the context of climate change. 

The third in our three-part blog series with Decodis and MSC discusses our finding that different climate events, and different phases of those events, drive different needs for financial services.

The second blog in our series with Decodis and MSC explores our research finding that many poor households are just muddling through climate events rather than strategically adapting to long-term climate change in ways that enhance their resilience.

Based on interviews with hundreds of farmers in Nigeria, we unpack how households use financial services in responding to climate events.

Development funders are thirsty for guidance and good practices on funding for climate adaptation, not just mitigation. Here, we discuss how funding to support inclusive financial systems may be a great place for them to start.

EMDEs are hit hardest by climate-related disasters and environmental impacts and will need a variety of financial services to adapt and grow more resilient to climate change. Are they getting them? Our product scan provides preliminary insights.

This year’s World Environment Day theme “Only One Earth” reminds us that this planet is humanity’s only home, with finite resources that we must safeguard. Here, we look not only at who pollutes, but who suffers the impact of climate change most.

In her first blog post as CGAP CEO, Sophie Sirtaine proposes a global agenda for financial inclusion that leads to an inclusive, greener and more resilient world.

Amid the talk of national climate plans, net zero timelines, and the Paris rulebook, we should not forget about the need for practical tools — including financial services — that enable low-income populations to participate in the climate transition.

Early evidence suggests that the financial sector could play a key role in helping low-income people prepare for and participate in climate transition. However, greater coordination among funders and other sector stakeholders is needed.