Earlier this year, I was invited to speak at the UNEP FI Regional Roundtable on Sustainable Finance for Africa and the Middle East. It brought together financial institutions, policy leaders, and sustainability experts to explore how capital can drive resilience in a world of growing climate shocks.

My talk focused on one idea:

Finance can’t stop climate change — but it can stop collapse.

That may sound bold. But in disaster risk finance, I’ve seen what happens when we act early — and what it costs when we don’t.

So what do we mean by “building resilience”?

Resilience means the ability to anticipate, absorb, and recover from shocks — without falling into deeper crisis or long-term disruption.

And that readiness isn’t accidental.

It’s designed. It’s financed. And it starts before the next disaster hits.

Traditional disaster response is too slow

When natural disasters strike — such as floods, droughts, and earthquakes — countries often rely on humanitarian appeals, post-crisis loans, and delayed aid.

But these are too slow, too uncertain, and too expensive.

That’s why we need faster, more predictable financial tools. Tools that help vulnerable countries and communities respond without waiting for help to arrive.

This is where parametric insurance comes in

Unlike traditional insurance, which pays only after damage is assessed, parametric insurance is triggered by data — like rainfall levels or seismic activity — with pre-agreed thresholds.

When the threshold is crossed, the payout is triggered.

No delays. No negotiation. Just fast, objective finance — when it matters most.

In Morocco, when a 6.8 magnitude earthquake struck in 2023, seismic data confirmed the threshold on the Richter scale had been breached. Within days, $275 million was disbursed through the country’s parametric earthquake insurance scheme — one of the largest climate- and disaster-linked payouts in African history.

Some questioned whether it was enough to match the scale of devastation. And that’s a fair concern — no financial instrument alone can undo human tragedy.

But that misses the point.

The payout wasn’t a full recovery package. It was fast finance to enable early action — supporting relief efforts, maintaining liquidity, and preventing a deeper economic shock.

We saw this again in Malawi

One of the poorest countries in the world, Malawi faced a severe drought in the 2023/24 cropping season that devastated crops and pushed farming communities to the brink.

Parametric insurance triggered a payout of $18.2 million through ARC Ltd.

• $11.6 million went to the Government of Malawi
• $6.6 million supported partners under the Malawi Social Protection Policy

This wasn’t money stuck in a future budget or delayed by bureaucracy. It was designed to flow quickly — before a bad season turned into a hunger crisis.

Farmers received support ahead of the next planting season and humanitarian agencies could respond without waiting for emergency funds.

That’s what financial resilience looks like.

The bigger point?

This isn’t just about insurance. It’s about reimagining finance — from something reactive to something ready.

Finance that’s:

• Predictive, not just responsive
• Aligned, not just available
• And designed with the end user in mind

That includes tailoring products for local realities. In regions where people still transact in cash or where digital infrastructure is uneven, we cannot simply copy and paste insurance models from elsewhere.

We must build what fits.

A final thought

According to the World Bank, every $1 invested in early action like this can save up to $4 in avoided losses.

So let’s return to where we began.

Finance can’t stop climate change — but it can stop collapse.

Because real resilience isn’t built in the aftermath of crisis — it’s built in the systems we design before the next shock hits.

Let’s build that future.

The next crisis won’t wait. Neither should we.