Asia needs common language to unlock climate resilience financing, MAS says

Singapore's financial regulator has identified a fundamental problem holding back climate adaptation across Asia: investors cannot easily measure what they are buying. At a sustainability forum in Singapore last week, Abigail Ng, the Monetary Authority of Singapore's Chief Sustainability Officer, laid out the gap plainly. When companies invest in carbon removal or renewable energy, they speak a common language—tonnes of carbon dioxide. When they invest in making communities and infrastructure more resilient to climate impacts, they have no such shared metric. The result is that money flows toward mitigation projects while adaptation languishes, even though Southeast Asia has already absorbed nearly $235 billion in climate-related economic losses over the past three decades.

The scale of the need is staggering. The United Nations Development Programme estimates that Asean economies currently spend around $3.2 billion annually on climate adaptation. By 2030, they will need $422 billion cumulatively just to prepare for the physical climate risks already bearing down on the region. Yet only 17 percent of global climate finance currently targets adaptation at all. Investors recognize the problem intellectually. They understand that adaptation prevents losses. But as Ng explained, that understanding has not translated into capital flowing at the necessary scale. The absence of a common language—a way to compare one adaptation project against another, to quantify what resilience actually delivers—leaves investors uncertain about where to place their bets.

The Monetary Authority of Singapore is working to build that language through the Mitigation Co-Benefit and Adaptation and Resilience Guide, or MARS Guide, developed at the level of the Association of Southeast Asian Nations. The framework is designed to help companies and governments identify the specific climate hazards they face, the technological and nature-based solutions available to address them, and a consistent way to communicate about adaptation investments. Without such a framework, adaptation projects remain fragmented and localized—too small and geographically specific to attract the large pools of capital that institutional investors manage. Project preparation and capacity building are weak. Developers and financiers lack a shared understanding of what makes an adaptation investment bankable.

The challenge extends beyond measurement into the question of who bears the risk. Jackie Surtani, Regional Director of Singapore at the Asian Development Bank, noted that many adaptation projects do not generate obvious or predictable cash flows. A plastic recycling facility in Indonesia, supported by the ADB, illustrates the problem: when European regulations changed, the market for recycled bottles collapsed, exposing the project to commercial risks that private investors cannot easily absorb. Governments must play a central role in adaptation financing because the private sector faces hazards—regulatory shifts, market volatility—that commercial banks cannot price or manage alone. The ADB has committed roughly $1 billion over ten years across approximately twenty agriculture projects focused on adaptation, but Surtani acknowledged this remains small relative to the region's overall needs. Multilateral development banks and other public institutions must be willing to absorb first losses, provide guarantees, and structure blended finance arrangements that allow commercial capital to enter deals it could not otherwise take on.

For commercial banks themselves, the problem becomes more granular when adaptation financing moves beyond large public infrastructure into the real economy. Melissa Moi, Head of Sustainable Business at UOB's Group Corporate Sustainability Office, said that water treatment plants, seawalls, and large-scale water-management systems are relatively familiar to bankers and engineers. But translating the economics of adaptation into terms that individual businesses understand remains elusive. Research may show that a dollar invested in adaptation prevents a dollar of losses, but a business owner needs to know what that means for their particular sector, their assets, their operations. The boundaries between public and private responsibility for adaptation are unclear. Companies do not know where they should invest in their own resilience and what role private capital should play. Financial institutions lack forward-looking, detailed, and consistent data on the likelihood and severity of physical risks affecting specific assets.

Moi suggested that adaptation may already be happening across the economy without being explicitly recognized as such. In agriculture, companies have adapted their operations to changing weather patterns for years. But because these investments are not labeled as adaptation, they remain invisible within the financial system. The challenge now is to make adaptation visible—to help businesses and financiers identify what constitutes resilience investment and understand the economic case for financing it. Without that visibility, without a common language and framework, the capital needed to prepare Asia for intensifying climate risks will continue to flow elsewhere, leaving the region underprepared for the physical hazards already accelerating.