Climate Adaptation

Starting in December 2023, the European Commission supported a project to help Cassa Depositi e Prestiti SpA (CDP), the Italian national promotional bank, to identify where and how it could play a role in promoting the development and financing of climate adaptation investment projects in Italy.

Context

Italy faces significant climate change risks, including heatwaves, wildfires, floods, droughts, coastal erosion, and landslides, with nearly 94% of municipalities exposed to hazards that threaten public health, infrastructure, and economic stability. Despite clear evidence and known solutions, adaptation investments remain insufficient due to challenges like the localized nature of climate risk, delayed or hard-to-monetize returns, and fragmented planning. Recent events, such as the 2022 heatwave and 2023 floods, underscore the urgent need for resilience-building, especially in sectors like agriculture, health, and water management. CDP is well-positioned to drive progress by mobilizing finance, reducing investment barriers, and supporting project development.

Support Delivered

The project included the following components: 

1. Kick-off meeting and inception report, covering the operational aspects of the project 

2. Diagnostic of climate adaptation in Italy, covering existing initiatives and funding as well as needs and barriers 

3. Best practice research, looking at stakeholders within EU member states and beyond through interviews and desk research 

4. CDP capabilities assessment, mapping current processes and competences supporting climate adaptation and identifying gaps and needs 

5. Draft strategy and action plan, defining the overarching role CDP could play to support climate adaptation measures and the tools required 

6. Stakeholder engagement and information dissemination activities, through the production of a final report summarising the projects’ results.

Results achieved

The project made it possible to identify the potential role of CDP in facilitating and accelerating climate adaptation interventions promoted by Public Administrations, both central and local, in the various identified areas (e.g., hydrogeological, transport, and urban infrastructure).

Based on the different types of market failures characterizing the intervention areas, and taking into account best practices adopted at the international level, guidelines were defined to direct CDP’s actions. Additionally, some examples of project screening tools, methodologies for assessing the economic-financial and socio-economic sustainability of initiatives, as well as a database of financial structuring models, were provided.

The project laid the groundwork for defining a model that, once implemented, could help reduce Italy’s adaptation gap, strengthening the resilience of the national economy and promoting sustainable growth in the long term.