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Lessons from the Netherlands' Working Group on Adaptation
Dutch financial institutions want to scale up adaptation finance, but need the government to step up
Louie Woodall
February 08, 2024
AI-generated via DALL-E
TL;DR
The Dutch Working Group on Adaptation recently published a report on public-private collaborations needed to scale adaptation finance.
The Dutch financial sector is perilously exposed to climate risks. Over one-quarter of institutions’ portfolios are exposed to real estate, which is vulnerable to floods, heat stress, subsidence, and more.
The Working Group proposes five “instruments” for scaling adaptation finance.
While financial institutions are urged to embrace these “instruments”, the report makes clear they need the help of a supportive government.
The Watersnoodramp (or North Sea Flood) of 1953 is a painful chapter in Dutch history. Seventy-one years ago, a powerful storm surge charged against the Netherlands coast, afforded added ferocity by the high spring tide. The rush of water overwhelmed the country’s flood defenses, stampeding through its system of dijks (dikes) and swamping over 500 square miles of land. Over 1,800 people died, as did an estimated 30,000 livestock. Around 9% of Dutch farmland was inundated.
The Netherlands is therefore no stranger to the devastation natural disasters can cause. State and private actors alike are also acutely aware that climate change is giving rise to ever more dangerous weather events, which continue to test the flood defenses built following the Watersnoodramp. Heatwaves, droughts, and violent hailstorms have also swept the country in recent years.
Financial institutions aren’t standing idly by as these risks grow. In 2022, the country’s Sustainable Finance Platform, brainchild of the Dutch central bank, set up a working group on climate adaptation, made up of public entities and private financial institutions — including national champions Achmea, Rabobank, and ABN Amro. Late last year, it published its first report on ways to mobilize public-private finance for adaptation objectives.
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