5 questions for Anthony Schrapffer: Inside the IFC's 2026 Report on climate-resilient infrastructure

With over 40 co-authors and reviewers, 3 partner institutions, and 3 engineering companies contributing their field expertise, this report (1) is, above all, the story of a successful collaboration around a vital issue.

Anthony Schrapffer: Yes, and I would start with what made it work. The report was prepared under the auspices of the International Finance Corporation, a member of the World Bank Group, and it brought indeed together more than forty co-authors and reviewers across three partner institutions (including Scientific Climate Ratings, an EDHEC venture, and AXA Climate) and three engineering firms (SUEZ, Tractebel and EGIS).

The World Bank Group set the institutional frame and reviewed the findings, the engineering partners grounded it in real assets, and at EDHEC, we, through our venture, led the technical heart of the study: the quantitative framework linking adaptation measures to net asset value and to the risk-adjusted metrics investors actually use (2).

That collaboration mattered because the subject demands it. Infrastructure is the backbone of our modern society and economy. It keeps the power on for homes, businesses, and critical services, the water flowing from reservoir to tap, and the traffic moving through the territories, and yet, despite clear and repeated climate warnings, adaptation and resilience remain under-invested (3).

The goal was deliberately practical: not another warning, but the financial case, i.e the translation of physical risk into the language of finance. We wanted to show that resilience is not simply a cost to absorb, but an opportunity to invest in, and to give every actor across the financing chain a clear path from ambition to action.

The first part of the report brings together key insights and figures on the hidden cost of inaction, the gaps preventing investment at scale, and the 'shield effect' of investing today to protect tomorrow's assets. Could you tell us more?

Anthony Schrapffer: The scale of the exposure is striking. The average annual loss from extreme weather on infrastructure and buildings already exceeds USD 700 billion, roughly one-seventh of global GDP growth in 2021–2022, and for low- and middle-income countries the hit is around USD 390 billion a year.

Left unmanaged, climate impacts could destroy 43 million jobs across 49 countries by 2050, and the global cost of inaction reaches USD 1.27 trillion between now and 2100. Emerging markets hold only a third of the value at risk but bear more than half of the losses. Yet the same analysis shows targeted adaptation can cut those job losses by more than half, that is the shield effect of investing today to protect tomorrow's assets.

For example, upgrading Brazil’s roads to resilient standards by 2050 would cost about USD 19 billion but avoid roughly USD 41 billion in losses, essentially doubling the return, while shifting from reactive to routine maintenance lowers long-term costs by up to 40 percent. What blocks progress is not economics but four gaps we map precisely: a data gap, where risk cannot be quantified; an incentive gap, where regulation fails to reward resilience; a financing gap, where capital is rarely tied to adaptation and resilience outcomes; and a governance gap that fragments effort. Close those, and the capital follows.

Continuing with this example from Brazil, a key emerging market country, the report then focuses on three sectoral use cases. What strikes you in this part?

Anthony Schrapffer: What strikes me is that the numbers become almost dramatic once you quantify them properly, which is exactly the work we led at Scientific Climate Ratings. Across three Brazilian assets, an adaptation investment costing less than 10 percent of net asset value protects a multiple of that cost in value.

In power transmission and distribution, for a cost of about three percent of NAV, firebreaks saves nearly 23 percent of NAV, 8.6 dollars protected for every dollar invested, and cuts service outages by 85 percent. In water, a 2.4 percent investment returns 6.3 to one; on the motorway, 2.2 to one.

These are risk-adjusted dividends, evaluated over the full asset lifecycle. The deeper message is about full corporate and strategic alignment: adaptation is no longer just an engineering issue. It is a financial decision that should shape strategic priorities, credit assessments, and the cost of capital.

That reframing runs through our five cross-sectoral insights: climate impacts can erode almost 30 percent of net asset value under certain scenarios compared to a counterfactual case; targeted, some lower-cost measures deliver the highest benefit-to-cost ratios; some interventions fall below private cost-efficiency thresholds yet create major socioeconomic value, so public co-investment is critical.

Part III is a rich section of the report it identifies levers and pathways to unlock adaptation and resilience private investment. What are the key messages here?

Anthony Schrapffer: We try to answer the question everyone asks next: how do we actually access this opportunity? We organise it as four moves.

First, see the risk, build the climate-risk data infrastructure and, crucially, translate that data into financial value, which is precisely what our valuation framework at Scientific Climate Ratings is built to do.

Second, price the risk. Right now operators rarely get to recover what they spend on adaptation, so it doesn't happen. Make that cost-recovery predictable, through tariffs and concession terms, and reform public-private partnerships so the contract rewards the most resilient bid, not just the cheapest.

Third, deploy the capital. Adaptation costs money upfront and pays back over decades, so the financing must be patient, longer loan maturities, better terms for assets that prove their resilience, and guarantees or first-loss capital that protect early investors. Here, multilateral development banks and development finance institutions are pivotal: by absorbing the first risks, they give private capital the confidence to follow.

Fourth, coordinate: move from asset-by-asset fixes to system-level governance. On resources, the report points stakeholders to concrete, publicly available tools: the Climate Bonds Resilience Taxonomy, ISO 14090, IFC's Building Resilience Index, and climate risk quantification and rating frameworks such as those developed by Scientific Climate Ratings. The stakeholder approach is deliberately shared: governments set the rules and clarify cost recovery, operators elevate resilience to strategy level, investors embed physical risk in due diligence, and development banks crowd in private capital. Each has a distinct, named role — that is what turns intent into deployment.

EDHEC and its venture, Scientific Climate Ratings, have put a lot of efforts and expertise in this report. Do you think it will be a game changer?

Anthony Schrapffer: I think it can be - precisely because it changes the conversation from whether adaptation matters to how it pays. The strength of Scientific Climate Ratings' expertise and EDHEC Climate Institute's research in this report is methodological: we built the framework that links adaptation measures to net asset value and to the risk-adjusted metrics investors actually price.

That rigor is what gives the headline numbers their credibility. For it to be a game changer, the evidence has to travel, and it will, carried by the World Bank Group’s convening power and the reach of the partners, so the findings land with regulators, operators and financiers at once. But publicity alone is not enough; stakeholders have to come onboard concretely, governments clarifying cost recovery, operators bringing resilience into board-level decisions, investors adopting standardised resilience metrics and methodologies.

Our role does not end with publication. Through Scientific Climate Ratings we will keep pushing the science forward (4), refining the valuation methodology, extending it to new asset types across all geographies, and turning it into ratings and tools the market can use directly (4).

And this is where adaptation and mitigation must be understood as two halves of the same response, not competing priorities. Cutting emissions remains essential, but even under the most ambitious decarbonisation paths, a significant rise in physical climate risk is already locked in, the warming baked into the system will keep intensifying floods, droughts, storms and heat for decades. Resilience is therefore not optional, nor a substitute for reducing emissions; it is the unavoidable, complementary task of protecting the infrastructure and communities that will face those hazards regardless of how fast the world decarbonises.

The evidence is now on the table: adaptation is not a cost to be tolerated but a return to be captured. The capital exists and the opportunity is proven: our job, from here, is to make sure the market can no longer afford to look away.

References

(1) Low Cost, High Yield: The Adaptation and Resilience Investment Opportunity for Infrastructure. June 18, 2026. IFC - International Finance Corporation (a member of the World Bank Group), AXA Climate and Scientific Climate Ratings (an EDHEC Venture) - https://www.edhec.edu/sites/default/files/2026-07/2026-adaptation-resilience-investment-opportunity-infrastructure-axa-ifc-edhec.pdf

(2) Scientific Climate Ratings Leads Business Case Analytics for the World Bank’s New Report, Revealing Significant Returns on Infrastructure Adaptation & Resilience Investments. June 2026. Scientific Climate Ratings, an EDHEC Venture - https://scientificratings.com/2026/06/24/scientific-climate-ratings-leads-business-case-analytics-for-the-world-banks-new-report-revealing-significant-returns-on-infrastructure-adaptation-resilience-investments/

(3) [#dataviz] Climate change could be very costly for those who have invested in infrastructure. EDHEC Vox, July 2024 - https://www.edhec.edu/en/research-and-faculty/edhec-vox/dataviz-climate-change-could-be-very-costly-for-investors-in-infrastructure

(4) Scientific Climate Ratings: the missing link for investors. EDHEC Vox, April 2026 - https://www.edhec.edu/en/research-and-faculty/edhec-vox/scientific-climate-ratings-edhec-venture-the-missing-link-for-investors