Pillar 1
Adaptation and Resilience Initiatives
Southeast Asia faces growing climate and biodiversity threats, from rising seas and extreme weather to ecosystem loss. SGFIN’s Adaptation and Resilience research stream helps financial institutions assess physical and transition risks, using geospatial data and sector-specific case studies. The goal is to develop financing solutions to strengthen long-term societal and commercial resilience to escalating climate and biodiversity risks.
SGFIN research on adaptive responses offers cutting-edge empirical and theoretical insights, examining economic responses to extreme events, adaptive behaviour under uncertainty, and policy mechanisms that strengthen resilience. Together, these studies inform evidence-based strategies to enhance adaptive capacity and reduce vulnerability in a warming world, highlighting pathways for resilient development across sectors.
A Multi-Provider Assessment of Asset-Level Flood Risk in the Banking Sector
2026
This study links large-corporate loan exposures to georeferenced assets and compares inland flood hazards across three providers. The findings show that asset-level analysis uncovers concentrated losses hidden by borrower averages, especially in capital-intensive sectors. Provider divergence is material, with no single dataset capturing half of pooled tail risk. The framework makes physical climate-risk uncertainty visible, comparable, and actionable for credit assessment, stress testing, and supervision.
Transition and Physical Climate Risks in Bank Loan Portfolios Across the Indonesian Banking System
2026
As physical risks from climate change escalate globally, financial systems face mounting climate-related vulnerabilities. Indonesia’s banking sector also faces compounding exposure. The country’s low-lying coastal geography and fossil fuel-dependent economy create dual vulnerabilities, both transitional and physical. Transition stress testing reveals that coal, oil, gas, and electricity sector borrowers face disproportionately higher default risks during volatile periods, with expected losses potentially rising 35%. Flooding poses particularly severe physical risks, threatening borrower asset values significantly. By 2060, major banks could face annual asset losses averaging 0.4% under moderate climate scenarios, and rising over 60% under severe projections. Stronger provisioning, improved capital planning, and enhanced climate risk monitoring frameworks are urgently needed.
Farming Practices, Financing Constraints, and Trust Barriers in Indonesia’s Rice Sector
2026
This paper provides a detailed examination of the financial vulnerabilities faced by smallholder rice farmers in Indonesia. This paper presents findings from a large-scale survey of 3,030 rice-farming households, highlighting the underlying barriers to productivity, financial inclusion, and climate resilience.
Atlantic Hurricanes & Business Activity
Agarwal, S., Choudhury, S. P., Fan, M., & Klapper, L. (2025). The impact of Atlantic hurricanes on business activity (Policy Research Working Paper Series 11217). The World Bank. https://openknowledge.worldbank.org/server/api/core/bitstreams/4a51f770-b6bc-4426-a0a1-1b4d814b551c/content
This paper quantifies the short-run economic impact of 21 Atlantic hurricanes on U.S. local business activity from 2017 to 2024 using anonymized Mastercard transaction data aggregated by ZIP code. On average, hurricanes reduce merchant sales by 12.4 percent during the preparation, impact, and recovery phases—an estimated US$1.38 billion in lost revenue per storm. Substitution in spending across nearby areas or large online platforms is limited, indicating widespread local consumption declines. Economic disruption varies more by industry than storm intensity, with independent stores hit harder than chains. Local businesses with larger online presence face smaller, shorter sales declines, showing greater resilience.
Urban Development & Climate Risk
Agarwal S., Fan, M., & Qin, Y. (2025). Avoid urban development policy that fuels climate risk, Nature Climate Change. https://doi.org/10.1038/s41558-025-02365-3
Urban development policies, designed to improve city resilience, could unintentionally increase the exposure to climate risk. This Comment discusses the impact of misaligned incentives, miscalculated benefits and costs, and overlooked behavioural responses on policy outcomes, as well as future directions.
Noise Pollution & Youth Development
Adbi, A., Agarwal, S., & Ghosh, P. (2025). Urban noise pollution and learning in developing economies, Nature Cities 2, 6-7. https://doi.org/10.1038/s44284-024-00189-4
Many cities in the developing world are witnessing high noise pollution due to infrastructure development and growing traffic. Urban planning interventions may be necessary to mitigate potential adverse effect of noise pollution on the learning outcomes of young residents in developing economies.
