With climate change and extreme weather expected to increase risks to businesses, including their supply chains, productivity, revenues, and credit-ratings, climate resilience is a topic that should be a high priority to the private sector. In developing countries, it is estimated that climate resilience requires investment of around $150billion per year by 2030, and rising steadily from there. It is therefore crucial that the private sector joins the public sector in increasing investment to face this challenge.This working paper, produced by the Climate Policy Initiative, provides emerging insights on the tools and approaches developed by a subset of Development Finance Institution (DFI) activities engaging the private sector in climate resilience. The paper aims to outline the barriers to private investment, identify approaches DFIs have taken to overcome these barriers, discuss possible ways to stimulate greater private and public investment, and to foster debate on how to close the current investment gap.The study highlighted the following lessons:

A combination of policies, regulations, and longer-term debt from DFIs can trigger private investments in climate resilience.
Technical assistance measures has helped to stimulate demand for private investment by addressing knowledge gaps. They also supported water-dependent businesses to identify opportunities for climate-resilient investments, and engaged local banks in the financing of water-efficient technologies.
Technical assistance, provision of finance for on-lending, and credit enhancement measures are encouraging local financial institutions and non-bank entities to address the debt funding gaps preventing micro-, small-, and medium-enterprises from investing in climate resilience.

Finally, four main recommendations are provided to aid in identifying viable investment opportunities, and to develop project pipelines:

Governments should adjust regulatory frameworks to create stronger incentives for private investment.
Governments, their agencies, and DFIs, sometimes in partnership with private actors, can help equip businesses with the information and tools they need to integrate climate information into investment decision making.
DFIs and other public agencies should enhance collaboration with the financial system and between actors of supply chains to foster private investors engagement in climate resilience.
DFIs can help create the necessary evidence base to encourage private sector interest by piloting approaches in middle-income countries for use in lower-income countries.