Reframing Climate Action: From Managing Risk To Building Resilience

For decades, efforts across the climate, conservation and development spheres have shared a common aim: to protect people and ecosystems from harm. Over time, as environmental understanding advanced and financial markets became more engaged, risk management has emerged as a dominant framework shaping decisions.

Risk proved appealing because it could be measured. Financial actors could quantify, price, hedge, insure, or “de-risk” it to attract private capital. From microinsurance pilots to sovereign catastrophe bonds, risk became the operative language of climate action. Policymakers and institutions built models, systems, and instruments, like early warning networks and climate bonds, around the logic of reducing or transferring risk.

But this framing is increasingly inadequate. As the world faces cascading climate, geopolitical, health, and economic shocks, managing risk alone is no longer enough. Nowhere is this more evident than in adaptation, where the gap between needs and funding is starkest. The shift required is clear: resilience, not risk avoidance, must become the organizing principle.

From Morality to Markets to Resilience

More recently, the dominant framing has shifted toward financial risk and market efficiency, turning climate risk into something to price and disclose, fueling ESG based indices and green bonds. While these tools mobilized capital, they have largely prioritized large-scale mitigation over local adaptation.

Resilience now offers a necessary correction to a system overly focused on the avoidance of risk rather than regeneration. It’s not a soft add-on but a central strategy for stability and prosperity. Community-driven, locally led adaptation has proven more effective and durable, rooted in lived experience and local knowledge. Yet these initiatives remain sidelined and underfunded by conventional finance models.

“We fundamentally need to change the narrative from aid to empowering people, families, communities and small firms everywhere… to make the decisions for themselves and to get access to the funding they need to make those decisions,” said Sophie Sirtaine, CEO of CGAP, at the launch of Unlocking Critical Finance for Climate and Economic Resilience, a report by The Earthshot Prize with contributions from CGAP and supported by the Mastercard Center for Inclusive Growth and CGAP.

The Limits of Risk Logic

Today’s climate finance system focuses heavily on minimizing downside risk, especially for investors. This often results in shifting risk from the private sector to public actors, rather than addressing underlying vulnerabilities. In adaptation finance, this contradiction is sharp: while mitigation absorbs the majority of global climate capital, adaptation receives just 10%, and less than 17% of that reaches the local level.

“Communities most vulnerable to climate impacts are often the least economically secure, and yet remain largely overlooked by private and commercial capital,” said Mehmaz Ghojeh, head of strategic partnerships at Earthshot.

Financial norms that emphasize scalability, formal structures, and returns filter out many high-impact, locally led solutions. Even when these efforts are funded, they are often forced to fit into mitigation-style models that overlook their broader public benefits.

Despite their impact, investments in resilience, from disaster preparedness to ecosystem restoration, receive no credit in financial ratings or capital markets. As Guido Schmidt-Traub, partner at Systemiq and advisor to Brazil’s COP30 presidency, asked at a London Climate Week event on the triple dividend of resilience: “Why does climate risk lower a country’s credit rating, but resilience investment doesn’t improve it?”

Scaling What Already Works

The Unlocking Critical Finance report draws on more than 2,200 innovations nominated to The Earthshot Prize, distilling lessons from a diverse range of locally led, commercially viable, and socially inclusive solutions.

One example is Coast 4C in the Philippines, which helps seaweed farmers increase yields while restoring degraded marine ecosystems. The program protects over 5,800 hectares of coastline, cuts 11,200 tonnes of CO₂e annually, and supports nearly 9,000 people—82% of them women—with increased income and access to finance.

These are not edge cases but viable models. What unites them is not scale or profitability but local agency, ownership, design, and delivery by the communities who understand the challenges best. As Ghojeh makes clear: “This is just one of many examples showing that locally-led and commercially viable models are already transforming climate-vulnerable economies.”

“Many of these solutions are led by micro and small enterprises in climate-vulnerable economies, who understand the challenges deeply,” added Payal Dalal, Executive Vice President at the Mastercard Center for Inclusive Growth.

From Recipients to Protagonists

Perhaps the greatest flaw in the risk narrative is its portrayal of vulnerable communities as passive recipients of aid. A resilience approach instead sees them as active protagonists, designing, implementing, and scaling solutions that suit their context.

It is increasingly clear that effective adaptation won’t scale through traditional government programs or risk-averse financial systems. “We are still asking how to survive the next crisis. But the real question is, how do we thrive despite it?” said Schmidt-Traub.

To truly reframe climate action, we must ask not only “What could go wrong?” but “What must go right for people to flourish?”

Building a Resilience-Centered Future

As Ghojeh points out the solutions already exist, from Coast 4C and Frontier Markets in India to RISCO’s digital climate risk tools. What’s missing is a system that can identify, fund, and scale them. That requires moving beyond ESG checklists and adopting tools that value long-term resilience outcomes. It means supporting intermediaries that bridge global capital and local innovators.

We need financing tools fit for vulnerable contexts, ones that work where traditional systems fail. As Ghojeh puts it: “The innovations exist. The capital exists. Now is the time to connect the two and scale the solutions that are already building a better future.”

The economic rationale is compelling. According to recent research from the World Resources Institue, every $1 invested in resilience could generate 10x return, from avoided losses to increased productivity and social stability. Locally led adaptation delivers what experts call ‘triple dividends’: reduced climate risk, economic returns, and broader development gains.

Achieving that future demands more than new metrics, it requires a mindset shift. One that puts resilience, not risk, at the heart of how we act, invest, and govern.