Advancing water resilience through science-based criteria
2024 was the hottest year on record. The same year, the UN reported that over 800,000 people were displaced by extreme weather. In the US, 2025 has already set a record for the financial cost of climate disasters. The human, economic, and environmental costs of inaction are escalating. So must our ambition.
Even the most conservative estimates place the adaptation funding gap at around USD200 billion. Resilience, meanwhile, remains an emerging and often fragmented approach to water and climate action, still far from being fully realised. So we are setting our sights on the USD 6 trillion (and growing) green, social, sustainability, and sustainability-linked bonds (GSS+)* market.
A new Climate Bonds Initiative (Climate Bonds) working group co-led with Paul Fleming, President, The Water Value LLC, and John Matthews, Executive Director, Alliance for Global Water Adaptation (AGWA), is looking to expand green bond criteria to mobilise funding for adaptation and resilience.
Climate Bonds is one of several organisations working to ensure the quality and integrity of these bonds, providing investors, issuers, and others with the information they need to participate in the market. Fleming and Matthews have been involved, given their expertise in water resilience, investment, and defining operational criteria that can mobilize capital.
The goal of the new working group is to develop a coherent taxonomy that defines what qualifies as an adaptation and resilience intervention for water — a framework designed to accelerate the flow of capital into water and climate resilience. “We’re aiming to combine integrity with urgency, creating a clear and practical structure for identifying water-resilient investments that can support both project developers and investors,” says Fleming.
The expanded criteria would facilitate bond issuance in a way that prioritises high integrity while finding an appropriate balance with expediency, making it easier and faster to put together interventions that get capital and for investors to find and fund them.
According to Matthews, “Along with our Climate Bonds colleagues, Paul and I are eager to create a water and climate investment vector – aligning investors with direction and magnitude. If we do our work correctly, we will make the flow of capital both easier and more targeted.”
“If we want adaptation and resilience to move at the speed the climate crisis demands, we need clarity, consistency and scale. This work brings all three together – giving investors a coherent framework to recognise resilient water investments and direct capital to where it can make a real difference.”
The group brings together technical experts ranging from investors to practitioners directly involved in implementation and project delivery. Their task is to take Climate Bonds’ existing cross-sector Resilience Taxonomy, refine the water-related criteria, and put them through rigorous stress testing. Based on their assessments and analysis of current requirements, the experts will update — and, where needed, introduce new — criteria to ensure the framework is robust, practical, and fit for purpose.
Our approach involves applying criteria to a suite of interventions to ensure they make a substantial contribution to adaptation while also avoiding maladaptive impacts and not contributing to greenhouse gas emissions. The next step will be to collate a subset of interventions – a whitelist – that meet enough criteria to be automatically greenlit for investment with no further investigation needed.
The impact of the work will be two-fold. Primarily, the use of the updated criteria should increase confidence and thus investment in adaptation and resilience projects. In effect, the team is defining a resilience “sector” for investors, with water at its center. Additionally, the criteria will help investors better understand resilience, driving its integration across their portfolio, while adaptation projects will have robust guidance – through the criteria – to ensure their projects are resilient.
At the end of COP29, parties agreed on a new collective quantified goal (NCQG) on climate finance of USD 300 billion per year to support climate action in developing countries. We have yet to see how COP30 will put this into action. But the team now in place is creating a framework that should facilitate both private and public investment.
Our aim with this collaboration is to help mobilize urgently needed funding sooner rather than later by guiding adaptation projects to become more resilient through specific criteria and then bringing these projects to the attention of investors.