South Asia is bracing for a sharp escalation in extreme weather events, with projections indicating that nearly 90 percent of its population will be exposed to intense heat and over one in five people at risk of severe flooding by 2030. 

As public budgets face increasing pressure, a new World Bank report, “From Risk to Resilience: Helping People and Firms Adapt in South Asia,” emphasizes that the bulk of climate adaptation efforts will need to be led by the private sector. The report lays out critical policy reforms designed to empower households and firms to adapt to these increasingly frequent and damaging weather events.

Released today, the report reveals a high level of climate risk awareness across the region. More than 60 per cent of households and businesses have experienced extreme weather in the last five years, and over 75 percent anticipate similar events in the coming decade. In response, many are already taking steps to adapt, with approximately 80 percent of households and 63 percent of firms reporting some adaptation measures. However, most of these actions remain basic, such as raising house foundations or installing fans, while more advanced strategies, like adopting climate-resilient seeds or relocating from high-risk areas, are less common.

“The urgency is growing. People and firms are already adapting, but they are doing so with limited tools and few resources,” stated Martin Raiser, World Bank Vice President for South Asia. “Governments must act quickly to remove the barriers that prevent more effective adaptation. This includes removing distortions in land and labor markets, expanding access to finance, and investing in public infrastructure to support people and businesses as they respond to climate risks.”

The study identifies market barriers and income constraints as primary obstacles to more robust adaptation. Households with greater education or access to formal finance are more inclined to adopt advanced strategies. Similarly, better-managed firms facing fewer regulatory hurdles tend to be more adaptive. Removing these systemic barriers is crucial for enabling more effective adaptation by both households and firms.

Franziska Ohnsorge, World Bank Chief Economist for South Asia, highlighted the significant potential of private sector engagement: “Private sector adaptation could reduce one third of the region’s projected climate damage, but this requires governments to strengthen enabling environments. Adaptation is most effective when markets function well and when essential services like transport, water, healthcare, and digital connectivity are widely accessible.”

The report advocates for a dual approach, calling for both targeted adaptation efforts and broader development measures that inherently build climate resilience. Despite fiscal limitations, governments play a vital role in facilitating this transition. Key recommendations include expanding access to localized climate information, promoting weather-indexed insurance, and supporting the adoption of resilient technologies, such as energy-efficient cooling systems. Essential public investments in protective infrastructure—including roads, drainage, reliable power supply, and mobile networks—are also deemed critical for ensuring safety and connectivity.

Successful local adaptation initiatives offer promising blueprints. In Bangladesh, investments in early warning systems and cyclone shelters have dramatically reduced fatalities during major storms. In India, cities like Ahmedabad are leading with proactive heat action plans to protect urban populations from rising temperatures. These examples demonstrate how strategic investments, and effective institutions can successfully scale up local adaptation efforts.

The World Bank report concludes by outlining three core principles for policy action: implementing a comprehensive package of adaptation measures, prioritizing solutions that simultaneously support development and climate resilience, and aligning adaptation strategies with long-term development goals to ensure lasting progress. By fostering conditions that empower households and firms to adapt, governments in South Asia can effectively build a more resilient future.

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