N🟁N

How Global Finance Undermines Climate Adaptation And Resilience

The article titled "How Global Finance Undermines Climate Resilience" by Felicia Jackson, published on Forbes on June 26, 2025, delves into the intricate relationship between global financial systems and their impact on climate resilience. The piece is a comprehensive examination of how financial practices, policies, and institutions are not only failing to support climate resilience but are actively undermining efforts to mitigate and adapt to climate change.

The article begins by setting the stage with a stark reminder of the escalating climate crisis. Jackson highlights recent extreme weather events, such as devastating hurricanes, prolonged droughts, and unprecedented wildfires, which have wreaked havoc across the globe. These events, she argues, are not isolated incidents but symptoms of a broader systemic failure to address climate change effectively. The financial sector, with its vast influence and resources, should be at the forefront of driving solutions, yet it is often found to be part of the problem.

One of the central themes of the article is the role of fossil fuel financing. Jackson points out that despite global commitments to transition to renewable energy, major financial institutions continue to pour billions of dollars into fossil fuel projects. She cites a recent report indicating that in 2024 alone, global banks provided over $1 trillion in financing to the fossil fuel industry. This investment not only perpetuates reliance on carbon-intensive energy sources but also diverts capital away from sustainable alternatives that could enhance climate resilience.

The article then shifts focus to the issue of short-termism in financial decision-making. Jackson argues that the financial sector's obsession with quarterly profits and short-term gains is fundamentally at odds with the long-term nature of climate resilience. She provides examples of how investment decisions, driven by immediate financial returns, often overlook the long-term environmental and social costs. This short-termism, she contends, is a significant barrier to achieving the systemic changes needed to build a more resilient future.

Another critical aspect discussed is the role of financial regulations and policies. Jackson critiques the current regulatory framework, which she believes is inadequate in holding financial institutions accountable for their environmental impact. She points to the lack of mandatory climate risk disclosures and the absence of stringent penalties for non-compliance as key areas where reform is urgently needed. Without robust regulations, she argues, financial institutions have little incentive to prioritize climate resilience over profit.

The article also explores the concept of 'greenwashing' within the financial sector. Jackson explains how some financial institutions engage in superficial environmental initiatives to enhance their public image without making substantial changes to their core business practices. She cites several high-profile cases where banks and investment firms have been accused of greenwashing, misleading consumers and investors about their commitment to sustainability. This practice, she argues, not only undermines genuine efforts to combat climate change but also erodes public trust in the financial sector's ability to drive meaningful change.

Jackson then delves into the impact of financial practices on vulnerable communities. She highlights how global finance often exacerbates existing inequalities, leaving marginalized populations more exposed to the adverse effects of climate change. For instance, she discusses how predatory lending practices in developing countries can lead to unsustainable debt levels, making it harder for these nations to invest in climate resilience measures. Similarly, she points out how insurance companies often withdraw coverage from areas deemed high-risk due to climate change, leaving communities without the financial safety nets they need to recover from climate-related disasters.

The article also examines the potential of innovative financial instruments to support climate resilience. Jackson discusses the rise of green bonds, climate-linked derivatives, and other financial products designed to channel capital towards sustainable projects. While she acknowledges the promise of these instruments, she cautions that their effectiveness depends on their design and implementation. Without proper oversight and alignment with genuine climate goals, these financial innovations could fall short of their potential.

In the latter part of the article, Jackson offers a series of recommendations for how the financial sector can better support climate resilience. She calls for a shift towards long-term investment strategies that prioritize sustainability over short-term gains. She also advocates for stronger regulatory frameworks that enforce climate risk disclosures and penalize greenwashing. Additionally, she emphasizes the importance of engaging with communities to ensure that financial solutions are equitable and inclusive.

Jackson concludes by underscoring the urgency of the situation. She argues that the financial sector has a critical role to play in building a more resilient future, but this requires a fundamental shift in how it operates. Without decisive action, she warns, the global financial system will continue to undermine efforts to combat climate change, with devastating consequences for the planet and its inhabitants.

Overall, the article is a thorough and compelling critique of the current state of global finance in relation to climate resilience. It provides a detailed analysis of the various ways in which financial practices are failing to support climate goals and offers a roadmap for how the sector can transform to become a force for positive change. Jackson's piece is a call to action for financial leaders, policymakers, and the public to work together to create a more sustainable and resilient future.

Read the Full Forbes Article at:
[ https://www.forbes.com/sites/feliciajackson/2025/06/26/how-global-finance-undermines-climate-resilience/ ]