For many organisations, the conversation is evolving. Cutting emissions remains essential, but another question is moving up the agenda: how do we adapt to the physical effects of a changing climate?
As a result, climate adaptation is increasingly being discussed alongside decarbonisation.
From climate risk to business resilience
At ING, we see this shift reflected in conversations with clients across sectors. Businesses are taking a closer look at how physical climate risks could affect assets, operations and supply chains. At the same time, they are exploring investments that can strengthen resilience over the long term.
The trend is visible across the economy. Energy companies are investing in infrastructure that can support a more resilient and increasingly electrified system. Real estate companies are looking at ways to reduce heat stress in buildings. Infrastructure operators are assessing how transport, logistics and utility networks can cope with more extreme weather.
In agriculture and food production, the focus is often on water management, climate-smart farming and protecting productive land. Building resilience across the value chain is becoming increasingly important.
For many businesses, adaptation is no longer seen only through a sustainability lens. It is becoming a business resilience issue.
Climate impacts are shaping investment
The need is growing. Extreme heat, drought, flooding and water scarcity are already affecting economies across Europe. These events can disrupt energy generation, industrial production, transportation and agricultural output.
They are also shaping investment decisions.
"Sustainable finance is entering a new phase of growth," says Peter Kindt, global head of Sustainable Solutions Group at ING. "The market may be evolving, but the need to finance the energy transition, strengthen infrastructure, support innovation and build resilience to a changing climate remains as strong as ever."
A resilient energy system
Recent heatwaves highlighted how closely resilience and transition objectives are connected. Low water levels reduced hydropower generation in parts of the Nordics, while high river temperatures affected nuclear generation in France and Belgium. The result was increased pressure on electricity markets.
The lesson is clear. Building a lower-carbon energy system is not only about adding renewable power. It is also about ensuring that energy infrastructure can operate reliably in a changing climate.
That helps explain why investment in electricity grids, transmission networks and broader energy infrastructure remains so important. A resilient energy system supports growth, electrification and energy security. Increasingly, it also depends on effective climate adaptation measures.
The role of sustainable finance
Financial institutions have a role to play.
"Climate adaptation is still a relatively new consideration for many businesses," says Arash Mojabi, UK head of Sustainable Solutions Group at ING. "Some organisations are already looking beyond immediate risks and exploring how to protect assets, strengthen supply chains and remain competitive over the long term. Others are only starting to assess what physical climate risks could mean for their operations. Sustainable finance can help turn credible resilience plans into investable solutions alongside the continued transition to a low-carbon economy."
Financing is part of the picture. Combining capital with sector knowledge and strategic insight can also help organisations understand emerging risks and identify opportunities.
Turning adaptation into opportunity
The opportunity extends beyond managing risk. Adapting economies to climate change is expected to drive demand for new technologies, upgraded infrastructure and more resilient business models. Areas such as water management, flood protection, climate-smart agriculture and resilient infrastructure are likely to become increasingly important.
Organisations that act early may be better positioned to navigate uncertainty, protect long-term value and remain competitive as climate risks become more visible.
For ING, supporting clients through both the low-carbon transition and the growing need for climate adaptation remains an important focus. Increasingly, the two go hand in hand. Building a more sustainable economy means reducing emissions while also strengthening resilience to a changing climate.
Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance a lot of sustainable activities, but we still finance more that's not. See how we're progressing at ing.com/climate.