Funding a sustainable future – debt but not as we know it

Climate impacts are testing the liveability of our cities. But how will we fund urban resilience measures when governments are strapped for cash and individual businesses struggle to invest in solutions to broad risks?

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" Heatwave responses can be educational and engaging if packaged to include community based [solutions]."
Mara Bun, Resilience Consultant, Green Cross Australia

This is a global challenge.

A team driving an innovative 'Resilience Bond' in NYC asserts: “the pipeline of projects remains stubbornly stuck in traditional, direct revenue models, such as toll roads and bridges, and planning for resilience upgrades and improvements remains a public sector challenge”.

New collaborative funding models are needed to bolster urban resilience. Green Cross Australia’s Business Adaptation Network (BAN) was developed to tackle challenges like this one. Since 2014, 16 companies from infrastructure, finance, property and other service sectors have joined BAN alongside research and local government members to share challenges and advance climate adaptation practices across Australia.

This group has brought diverse insights and capabilities to the table. I facilitated a recent Sydney gathering of 50 business leaders who considered these key questions:

• What needs funding?

• How do we fund projects?

• Are there standards we can use? Do we need more?


City of Sydney Chief Resilience Officer Beck Dawson asked what it will take for metropolitan Sydney to build shock absorbers in advance of escalating heat wave, bushfire, severe storm and flood risks. These work shopped priorities emerged:

• Start local

Top of the list: street-level, socially driven social investments like planting up streets, painting bike lanes and investing in neighborhood clean-ups. When natural disasters hit, the cost to ecosystems, community, business and government is reduced if our cities are more mobile, our urban canopy can cool us down, and our waterways are not clogged with waste.

• Adaptive infrastructure

The cost of undergrounding electricity cables to mitigate bushfire losses seems prohibitively expensive – until you compare it to recurring peri-urban bushfires and escalating loss scenario as cities boundaries reach closer to surrounding catchments. Our pricing rules prevent undergrounding cables but in the US novel environmental upgrade agreements are enabling investment in adaptive infrastructure.

• Integrated responses

Our cities are getting hotter. According to a widely cited University of California study of 217 cities globally, nearly half the cities experienced an increase in heatwaves between 1973 and 2012 while just 2 per cent experienced fewer. Others suggest cities are warming at a rate up to 30 per cent higher than the surrounding, non-urban environment.

They will not be livable unless we copy Singapore by aggressively investing in the urban canopy. This will mitigate urban heat islands, provide community refuge and support business continuity through heat waves and floods at street level.

Heat-wave responses can be educational and socially engaging if packaged to include community based white-roof programs, solar investments, battery storage and tree planting.

Just as local conversations about future-proofing can create incentives for product development, big data can further enable public participation by helping residents and local governments to visualise how their investments are weaving a neighbourhood scale resilience fabric.

• Inviting governments and citizens to lead

Singapore’s top down leadership has delivered world-class sustainability responses that test the capacity of Western Democracies to respond to climate change.

Australians expect our governments to make big, tough investment decisions, yet our governments do not appreciate the scale of the livability challenge nor the costs of failing to adapt.

We need a communications campaign that engages all levels of government and we need to unleash the power of deliberative democracy to enable prioritisation of resilient infrastructure investments. 

Citizens Juries become immersed in knowledge about current and emerging risks and benefits arising from different investment choices. They are well placed to lift their gaze beyond short-term political cycles, if governments entrust them with informing infrastructure investment decisions.


ANZ’s Cath Bremner believes resilience funding is a potential solution. Major investments can be repaid through small rate increases over many years with this view. Options include:

• Combining Catastrophe (or CAT) Bonds with Resilience Bonds. CAT bonds are insurance linked instruments that raise funds for catastrophe responses.

In contrast, Resilience Bonds (a new debt instrument developed by design firm re:focus partners, Swiss Re, RMS and Rockefeller Foundation) fund projects that reduce the risk of the same pre-defined natural disasters occurring. When combined with a resilience bond, CATS become more valuable. See more here.

• Supporting metro Sydney local governments to leverage 'fit-for-the-future' funding towards resilience investments.

• Providing resilience-retrofitting incentives for homes and commercial buildings to drive down insurance premiums and mitigate disaster response costs.

• Implementing environmental levies to fund project finance.

• Developing new debt instruments: Infrastructure Resilience Bonds (IRBs) that draw on funds collected through levies from those that benefit from the infrastructure.

• Exploring Social Impact Bond (SIBs) to fund the community sector to protect the vulnerable from heat waves.


According to EY’s Graham Sinden, new debt-instrument standards will need to be developed and existing standards must evolve if we are to capture the far-reaching benefits of projects aiming to enhance resilience.

Critical issues include:

• The capacity to give certainty in outcomes and benefits.

• The establishment of metrics for performance.

• The identification of counterparties. Who will pay out the bond plus realisation at the end of the period?

• How do we accrue value? Who collects the benefit of the projects? How are costs and benefits allocated?


Ideas from this workshop will be progressed by the Resilient Sydney project, with BAN member participation.

Learn more about BAN here, Resilient Sydney here, and BAN workshop host ANZ’s view on climate bonds here.

BAN is a member-funded community of practice. Join us by contacting Directors of the Board of Green Cross Australia Adam Davis ( or Sarah Kinsela (

• Benefits will be highly distributed in nature and over a medium term (~25 years). Long-term nature of projects may be a requirement and contribute to making a project investment grade.

• How do communities provide input, and drive prioritisation on projects. How do projects demonstrate community buy-in, support and benefit?

As always, BlueNotes welcomes comments on our stories in the comment field below.

Mara Bun is Resilience Consultant, Green Cross Australia, a not-for-profit helping people adapt to changing climate in ways which embrace sustainability and foster community resilience. 

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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