World Bank Urges Private Sector Role in Adapting South Asia to Climate Threats

A sharp escalation in extreme weather events is putting South Asia at growing risk, with nearly 90 percent of the population expected to face intensifying heat and more than one in five at risk of severe flooding by 2030, according to a new World Bank report released today. The study emphasizes that while the urgency of climate adaptation is high, strained public budgets mean that the private sector must play a central role in helping households and firms become more climate-resilient.

Titled "From Risk to Resilience: Helping People and Firms Adapt in South Asia," the report highlights the high awareness of climate risks in the region. It reveals that over 60 percent of households and firms have already experienced extreme weather in the past five years, and more than three-quarters expect similar disruptions in the next decade.

Basic Steps Are Not Enough

Adaptation is already underway—80 percent of households and 63 percent of firms have taken some form of action. However, most of these responses are rudimentary, such as raising home foundations, installing electric fans, or purchasing water pumps. Advanced solutions like adopting climate-resilient seeds, installing energy-efficient cooling, or relocating from high-risk zones remain rare, largely due to financial and regulatory constraints.

“People and firms are already adapting, but with limited tools and few resources,” said Martin Raiser, World Bank Vice President for South Asia. “Governments must act fast to remove barriers preventing more effective adaptation.”

Barriers to Effective Adaptation

The report points to systemic issues that hinder adaptation:

• Limited access to finance, particularly for low-income households and small businesses

• Distorted land and labor markets that discourage long-term investment

• Regulatory burdens that make it harder for firms to innovate

• Poor infrastructure in vulnerable areas, including inadequate roads, drainage, and healthcare services

Households with more education, or those with access to formal credit, are significantly more likely to adopt advanced adaptation measures. Similarly, well-managed firms with lower regulatory burdens and greater digital connectivity tend to fare better.

“Private sector adaptation could mitigate up to one-third of the region’s projected climate damage,” said Franziska Ohnsorge, Chief Economist for South Asia. “But this hinges on governments fostering an enabling environment.”

Strategic Role for Governments

Despite fiscal constraints, governments remain central to the adaptation strategy. The report outlines several key roles for the public sector:

• Investing in climate-resilient infrastructure, including transport, power, mobile networks, and drainage systems

• Providing localized climate information to help people make informed decisions

• Expanding weather-indexed insurance to reduce financial vulnerability

• Supporting resilient technologies such as solar-powered irrigation or cool roofs

• Promoting institutional reforms that streamline regulation and improve public service delivery

Successful case studies show what’s possible. Bangladesh, for instance, has significantly reduced fatalities from tropical storms through early warning systems and cyclone shelters. In India, cities like Ahmedabad have launched heat action plans that combine urban planning, public health, and communication strategies to mitigate heatwaves.

Three Pillars of Policy Reform

The World Bank’s policy roadmap for South Asia is based on three principles:

1. Comprehensive Approach: Combine financial, regulatory, and infrastructural support for adaptation.

2. Dual-Impact Solutions: Prioritize measures that enhance development and climate resilience simultaneously.

3. Alignment with Long-Term Goals: Ensure adaptation strategies are integrated into national development plans for sustainable impact.

A Call to Empower

The report concludes that resilience in South Asia can only be achieved if households and firms are empowered with tools, resources, and supportive systems. While the region faces a mounting climate threat, well-directed policy and private innovation could turn vulnerability into opportunity.