Certified Expert in Climate Adaptation Finance - Lehrgang von Frankfurt School of Finance & Management gGmbH

Unit 1: Climate change science – What is adaptation?

This introductory unit will present the science behind climate change and its physical impact, before moving on to discuss the impact of climate change on the economy. It will explore economies need to adapt, addressing the question “what is climate adaptation”, providing the macro perspective of adaptation (UNFCCC definition of adaptation) before moving to the micro perspective of adaptation (what do economies/actors do to adapt?)

Unit 2: Climate science meets climate finance

The Unit will provide an overview of the climate finance landscape to understand the importance and relevance of adaptation and climate resilience in terms of scale and contribution to climate finance. The Unit will explore the main building blocks of international adaptation-related policies, looking particularly at the Paris Agreement to anchor the role of the public sector and public support instruments and policies later in the course.

Unit 3: Coping with damages – the natural role of private and public sector actors

This Unit will provide an introductory overview of the natural roles of actors, presenting the interactions between private and public stakeholders, providing the basis for further analysis into adaptation finance. Private actors must consider how business decisions will change in a changing environment, while public actors must decide how to moderate this structural change (e.g. providing policies, support, information, etc.). The Unit will also introduce the different types of investors and financial intermediaries and an understanding of their decision-making criteria and processes, to answer the overarching question: Why are companies investing in climate and sustainability?

Unit 4: Basics of finance and investment with a business model perspective on climate-resilient projects

This Unit will shift the focus towards the level of climate investments. Participants will gain a methodological understanding of financing at the project level, including how to assess the financial viability of an investment. There are crucial tools necessary to do this, and this unit will provide the basics of business models, finance, and investment, with a focus on investment calculations (including key terms, typical KPIs) and key specifics of business cases, with a reference to climate adaptation.

Unit 5: Barriers to adaptation finance and the role of support frameworks

This Unit explores why markets alone might fundamentally not be able to trigger adaptation investment in a way necessary to mitigate climate change. It introduces market imperfections, or barriers, which may systematically keep adaptation projects from materialising. Once these barriers have been identified, there are a variety of options to tackle or overcome them, leading to efficient market outcomes. This guides you on how public finance or policy can facilitate private financial flows towards adaptation.

Unit 6: Building a business case for adaptation

In the previous Units, we explore the broader context and regulatory frameworks surrounding adaptation/climate resilient projects. This Unit will narrow the focus, introducing the process of analysing new adaptation business model, or adjusting existing business models, to increase the climate resilience of their portfolio.

Part I will first introduce the rationale for a private actor to invest, building on Unit 4 and will then provide a deep-dive into understanding adaptation business models and the proposition behind them, what kind of business models we observe in adaptation/climate resilience, the investors and the type of financial instruments used.

Part II will provide an overview of the broad variety of adaptation business cases, analysing a selection of case studies on different adaptation/climate resilient projects to conduct an in-depth analysis of their characteristics. In this way, we will build a business case from the perspective of a project developer.

Unit 7: Investment opportunities from the perspective of private financiers

This Unit will provide an overview of what sources of financing are available to finance adaptation business models, building on those analysed in Unit 6. It will link to the overview of financing structures given in Unit 4 and build up knowledge on investment opportunities from the perspective of private financiers, answering the question: who invests in these (adaptation) business models and how?

Unit 8: Financing the business model – financial instruments

Following on from sources of finance, this Unit will focus on instruments available to private actors to invest in climate adaptation activities, including ‘innovative’ instruments and blended finance.

Unit 9: Climate resilience and risk metrics and indicators

This Unit explores climate risks and resilience metrics, looking at how to define metrics that are measurable, computable and comparable, which include both mean and variability, recent past, current trends, and projection of risks. Possible indicators to measure climate finance potential include financial and impact-driven ones. A very restricted focus on monetary indicators might not create the right incentives to support a mix of projects contributing to transformational change. This Unit will also explore the measurement and disclosure of climate risk as to the first step to developing strategies to address risk as part of all investment decisions.

Adaptation seeks to moderate harm or exploit beneficial opportunities. Most of the research on adaptation to date has focused on public spending on adaptation rather than private adaptation, although it may be likely that most of the adaptation financing needs appear with the private actors affected by climate change. Understanding this will help to moderate and potentially accelerate adaptation, as well as address the role of government incentives for adaptation projects. This course will demonstrate that adaptation can appear with different economic and financial characteristics depending on the level we look at it and the individual activity that is considered. Depending on these different characteristics there are different roles for private and commercial actors or governmental institutions in facilitating the structural change towards a low carbon and climate-resilient economy.

This course is suitable for both public and private sector practitioners, including entrepreneurs, project developers, private investors, initiator/fund houses, international development finance consultants and managers, plant operators and manufacturers, engineers and advisory professionals (e.g. law firms, business, and tax consultants).  The course aims to explain the many facets of, and perspectives on, climate adaptation finance. Experience in (mainstream) banking and finance is therefore helpful but not required.