UNEP FI has partnered with MinterEllison to examine the impact of litigation in adaptation finance and address some of the challenges in scaling up adaptation capital identified in the GCA Adaptation Finance Paper published in 2019. This collaboration led to the publication of “The Forgotten Climate-related Financial Risk: Liability Impacts on Adaptation and Adaptation Finance“ in April 2021.

This high-level briefing paper explores the legal implications of adaptation to climate change-related impacts. Based on existing cases, it shows how climate litigation can act as both a driver and consequence of adaptation or maladaptation. As a corollary of the analysis, observations are drawn on the potential for litigation to help overcome some of the barriers to scaling finance for adaptation. It also provides a framework to consider the range of climate-related liability risks, and presents key inputs from which financial institutions can understand climate litigation as a mechanism to reduce barriers to adaptation finance.