Working Towards NLAAA: Finance Solutions for a Resilient Delta

Rising sea levels, land subsidence, and more extreme weather are urgent challenges facing the Dutch delta due to climate change. Although the Netherlands is globally the best protected delta, we need to get ahead of these challenges to maintain climate adaptive. Numerous institutions are working hard to tackle these issues, aiming to ‘keep our feet dry’. 

Financial institutions—including investors, lenders, and insurers, many based abroad—are also concerned about our vulnerability to climate change and our efforts to address it. They want to know if we are effectively managing these risks. Their perspective is crucial: our national credit rating depends on how financial institutions and rating agencies view these risks and our response to them. Without a “triple A” credit rating it will become more expensive to borrow the necessary capital for the climate adaptation costs we are facing. Besides the risk of rising costs, there is also an opportunity to be found in being ahead of the game, using climate adaptation as an incentive to fuel the new economy business models. We need to come up with a new investment strategy for a country where water and soil are leading.

So, what does effective management of these risks look like? How do we understand the financial impacts of climate risks and their management in the Dutch delta? And how do we attract investment to ensure necessary adaptation measures are implemented?

These questions were central to the “Working Towards NLAAA: Finance Solutions for a Resilient Delta” expert meeting held on May 14 in Dordrecht. The venue, a former bank built in 1870 for the purpose of “vorming, verbetering en beschaving van het volk,” (“education, improvement and civilization of the people”) provided a fitting backdrop for over 100 experts working together towards a modern interpretation of this mission. The day’s objectives were to develop stronger connections between stakeholders, build a shared understanding of the financial challenges and opportunities related to climate change in the Dutch delta, and focus on collaborative opportunities grounded in real-world cases.

Moderator Tracy Metz welcomed representatives from the financial sector, the Dutch “delta community,” adaptation policy and practice, and various scientific disciplines. Collaborators from the Dutch Central Bank (DNB) Platform for Sustainable Finance Working Group on Climate Adaptation and the National Delta Programme’s “NLAAA” initiative were given a front-row seat. Researchers from fields such as finance, law, economics, behavioral sciences, engineering, spatial planning, and design were also present.

Academics can provide state-of-the-art knowledge and serve as an honest broker. At the Resilient Delta initiative bring parties together for research-driven dialogue, exploration, and collective learning rooted in real-world cases

Zac Taylor

Theme Lead Delta System

In a conversation between Detmer Koekoek, the Kwartiermaker for the NLAAA initiative of the National Delta Programme, and Zac Taylor, the Academic Lead on Climate Finance for the Resilient Delta initiative, the importance of close cooperation between science, policy, and practice was emphasized. Taylor stated, “Academics can provide state-of-the-art knowledge and serve as an honest broker. At the Resilient Delta initiative bring parties together for research-driven dialogue, exploration, and collective learning rooted in real-world cases.”

The Resilient Delta initiative aims to bridge science and practice to address the challenging problems facing our delta. Integrating climate adaptation into the financial sector and involving finance in the Netherlands’ adaptation discussions are examples of such challenges, for Taylor. Sharing research questions, case studies, data, and knowledge enhances opportunities for deeper insights and more robust actions.

Professor Tatiana Filatova, in her keynote lecture titled “Physical Risks and the Economics of Climate Change Adaptation,” reinforced the scientific foundation for this collaborative agenda. Her core message was that physical risks are not always priced correctly by markets, and that investing in prevention and adaptation is far smarter than facing the costs of climate-induced losses and cascading damages. The costs of inaction are simply too high.

The NL-AAA initiative of the National Delta Program joins public and private sector to address climate adaptation in the Netherlands. Collaboration between government, financial sector and academics is crucial to succeed and maintain AAA Climate Resilient

Detmer Koekoek

Kwartiermaker ‘Nederland AAA-Klimaatbestendig’ initiative of the National Delta Programme

With these insights, the audience was divided into six round table groups to develop a shared understanding of concrete climate adaptation finance cases. Each group, co-hosted by a scientist and a real-world case owner, focused on one of six thematic questions: How do we finance futureproof new area development like Maasterras in Dordrecht? What does the future of our insurance system look like? Could the EU taxonomy change how we finance climate adaptation? Is there a business case for retrofitting existing neighborhoods in a future-proof way? What are the disruptive side effects of introducing climate risk labels for homeowners? What could a national climate investment strategy look like?

The morning sessions focused on exploring each question, while the afternoon sessions emphasized potential solutions and the knowledge needed to achieve them. For instance, understanding novel investment models and their tax and legal implications might be necessary. Learning from successful approaches in other countries or setting up conditions for testing and scaling viable approaches could also be beneficial.

In the coming weeks, Resilient Delta will share a report summarizing the plenary and breakout conversations, focusing on ideas for collaboration and follow-up. Resilient Delta has a mandate from our host universities to nurture and accelerate these ideas, applying new knowledge in relevant ways. Building on this productive day and ongoing initiatives, we look forward to working together towards NLAAA, uncovering ways to leverage finance to ensure a climate-resilient Dutch delta.

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