Authors: Abdi Mehvar, Zac Taylor
At the SKG Annual Congress on March 27, 2025, in Amersfoort, the Red&Blue session served as a key platform for critical discussions and knowledge exchange on integrating climate adaptation finance into urban area development. A panel of Dutch climate finance experts was invited to explore how international insights could be applied to the Dutch context. Moderated by Co Verdaas, Delta Program Commissioner and TU Delft Professor in Area Development, the session aimed not only to present the latest findings from the Red&Blue research program but also to actively engage participants in identifying practical challenges, knowledge gaps, and opportunities to advance climate adaptation finance. This report outlines a summary of the discussions occurred during this session.
Looking Abroad: Climate Adaptation Finance in Cities
Zac Taylor (Assistant Professor, TU Delft and Academic Lead, Resilient Delta) opened the session with an overview of emerging international trends and tensions in urban climate adaptation finance, emphasizing three key elements: real estate investors, property insurers, and place-based collaboration instruments.
Institutional investors face growing calls to assess and manage climate risks in their real estate portfolios. “There is a climate-intelligent arms race among property investors: How do we standardize climate risk assessments of investments?”, Taylor emphasized that the lack of a clear global standard results in conflicting assessments and uncertainty in decision-making. He also emphasized that real estate investors increasingly face a conundrum when deciding how to manage their risks: do they stay and engage in place-based discussions about mitigating risk, or do they decide to retreat from assets and markets seen to be too vulnerable? Taylor argued that some major investors are now declining to invest in high-risk markets, while others are struggling to find pragmatic ways to develop effective place-based adaptation strategies across their portfolios, which often stretch across multiple continents. Looking ahead, it will be crucial to find effective ways to integrate investor decision-making with place-based adaptation planning.
The role of property insurance in climate adaptation was another focal point of Taylor’s talk. In high-risk markets like Florida, Louisiana, and California, he observed how property insurers increasingly withdraw from high-risk areas or raise premiums to unsustainable levels. “We’re seeing cases where property insurance costs exceed 10% of a household’s pre-tax income,” he said, stressing how this trend threatens mortgage markets, new housing development, commercial real estate lending, and housing affordability. Collectively, this poses a significant financial threat to the stability of individuals, but also cities and regions. He also underscored the need for insurers to move from reactive strategies to active support for collaborative risk mitigation efforts. Climate adaptive building, smart spatial planning, and other direct investments in adaptation can reduce the strain on insurance markets, for example.
Photo by Sander van Wettum
In the face of financial market retreat, cities are increasingly left to manage the (financial) needs and consequences of climate adaptation. Taylor argued that local governments often struggle with fragmented financing mechanisms, where different climate risks—floods, heat stress, wind damage—are addressed through separate, uncoordinated public and private finance solutions. This fragmented approach, he warned, can lead to unintended consequences, ranging from maladaptation to affordability issues for residents. To address these challenges, Taylor emphasized the need for innovative place-based finance and governance models that go beyond traditional, siloed approaches. Integrated financial strategies, supported by both public and private sector collaboration, will be key to ensuring that urban climate adaptation is efficient, equitable, and scalable. Taylor concluded by posing three questions for Dutch practice:
- How can public and private sectors work together on climate adaptation finance?
- What mandates and collaboration tools do we need to effectively implement adaptation strategies?
- How do we balance efficiency, effectiveness, and equity in climate resilience planning?
Panel Discussion: Urban Climate Adaptation Finance in Practice
After Taylor’s opening propositions, Co Verdaas kicked off a panel discussion with a question for the room: “Who here is already working on climate finance challenges?”. One lawyer in the audience responded by highlighting the challenges of integrating climate adaptation into financial and regulatory frameworks: “We push insurance solutions and financing, but there is a lack of interest.” His remarks set the stage for three panelists – each representing the worlds of real estate investment, property insurance, and local government practice in the Netherlands.
Rudy Verstappen, ESG Team Lead at Altera, shared his company’s approach to integrating climate adaptation into its real estate investment strategy: “We see climate adaptation more from a risk management perspective, and we aim to integrate and mitigate as many risks as possible. If multiple shocks occur simultaneously, our funding could become limited. So, we focus on limiting risks”. He elaborated on the company’s close collaboration with the Dutch Green Building Council, which has developed the Framework for Climate Adaptive Buildings. Altera uses the framework to assess risks like drought and heat stress.
As for international investors retreating from high-risk areas, the room debated whether this was a viable approach – especially for investors rooted in the Netherlands. The audience seemed to agree that abandoning risky areas is not a sustainable option for investors. Instead, the focus should be on making proactive adaptation investments. In response, Verstappen acknowledged the complexity of the challenge and differentiated between types of climate risks. While rising sea levels may eventually necessitate relocation in certain areas, many other risks are relatively manageable. He emphasized that Altera’s approach emphasizes targeted adaptation solutions, rather than retreat. The team focuses on a horizon of 20-30 years, rather than long-term climate projections, to prioritize investments.
Gijs Kloek, Senior Manager Actuarial within the climate division of property insurer Achmea, emphasized the growing role of the insurance sector in addressing climate risks in the Netherlands. As the chair of the Climate Adaptation Work Group of the Platform for Sustainable Finance, Kloek also shared insights into the ongoing collaborations between banks, insurers, pension funds, real estate companies, and the government, which aims to develop joint strategic responses to climate change. Kloek pointed to a Work Group report published late last year that examined the implications of climate adaptation for the financial sector. “We explored what climate change means for the economy and our industry, and we outlined concrete recommendations for both the government and businesses,” he explained. These recommendations are now being actively implemented through multi-stakeholder working groups.
Kloek also underscored the importance of scientific research in informing practitioners’ responses, noting that Achmea has been consulting extensively with climate experts to refine its approach. He also stressed the need for cross-sector coordination, especially in addressing climate-related financial risks: “It is essential that businesses, government entities, and financial institutions collaborate to strengthen climate resilience.” While the Netherlands benefits from robust flood protection measures, Kloek pointed out that efforts must be scaled up to meet the urgency of climate challenges. He emphasized the significant economic influence insurers have in shaping policies and investments that prioritize sustainability. “We are here with our coordination groups, ensuring that the financial sector plays an active role in climate adaptation—not just in The Hague, but also on a broader European level,” he said.
Kloek highlighted a significant shift in the Dutch insurance sector’s approach to climate risk. While in some international markets insurers have been retreating from high-risk areas, Dutch insurers have been expanding their coverage. “For many years, areas like Eastern Groningen were excluded from coverage, but that has gradually changed. In recent years, even extreme rainfall and small-scale flooding have been covered. For the past five years, most insurers have also included floods from non-primary water defenses.” Despite this expansion in coverage, Kloek acknowledged that insuring damages from a failure in the primary water defenses remains a challenge. “The potential damage from a breach is so large that private insurers cannot bear the financial risk alone,” he explained. Discussions are ongoing with the government to explore potential solutions, including a reporting portal for flood damage. Kloek noted that new legal arrangements would be necessary to integrate insurers into the damage claims-paying and recovery process, which is now the responsibility of the government.
Rudy Verstappen and Gijs Kloek. Photo by Sander van Wettum
Kloek also addressed concerns regarding urban areas outside of dikes, as in cities like Rotterdam, where insurance coverage remains limited. “We don’t want to encourage more people to live in these vulnerable zones,” he said, “but there are areas where further building could be considered.” The feasibility of this approach is still under discussion. As climate adaptation measures become more widespread, Kloek noted that insurers are beginning to see tangible benefits. “With climate adaptation efforts and preventive measures, we can manage risks more effectively. If we continue in this direction, insurers can play a key role in stabilizing the financial impacts of extreme climate events.”
Hanke Haagsma, Strategic Advisor for Urban Development at the City of Rotterdam, highlighted the urgent need for large-scale investment in climate adaptation in existing urban areas. With aging neighborhoods and growing sustainability challenges, Rotterdam faces a significant financial challenge, requiring high investment by 2050 to tackle these issues, argued Haagsma
Rotterdam is grappling with multiple challenges simultaneously, including the transition away from gas, improving housing conditions, and addressing climate-related risks. Many homes in older neighborhoods were not built to last a century, and the market value of these houses does not represent the inner value. A portion of the housing stock consists of social housing, some of which have been sold off. Several neighborhoods also have urgent building foundation problems, putting residents and the city alike in a potential financial squeeze.
Community engagement is a central focus in Rotterdam’s approach, as the city strives to involve residents in decision-making processes. “We are in discussions with stakeholders about the problems they already face and how we can collaborate on solutions”, Haagsma explained. However, she acknowledged that the solutions are complex and that much work remains to align the financial resources with the scale of the challenges. “We’re already making strides in outdoor spaces and climate-related projects, but the biggest challenges remain in the existing city”, she added. Rotterdam is experimenting with innovative approaches, drawing lessons from pilot projects such as those in Zaanstad, where challenges like land subsidence and foundation issues are being addressed. However, Haagsmapointed out that concrete solutions are still in development, indicating that while progress is being made, much work remains to be done to address the full scope of the city’s needs.
Photo by Abdi Mehvar
Coupling Adaptation Strategies: Tackling Challenges through Cooperation
Following these perspectives, Co Verdaas emphasized that effective climate adaptation begins with acknowledging the challenges, analyzing them thoroughly, and collaborating across sectors to find practical solutions. A broader plenary discussion underscored the growing complexity of area development, as cities need to coordinate efforts across different sectors, and scales, involving insurers, investors, and policymakers.
Participants considered how strategic interdependencies between sectors, scales of intervention, and stakeholders must be proactively aligned in the future. As an example of the need for cross-sector alignment, participants touched on the ramifications of insurance product availability for urban development decision-making. Should urban areas be built for a future with fewer insurance solutions, with more protection provided through alternative strategies like more climate adaptive building? This shift is prompting stakeholders to rethink long-term risk management and financing strategies for climate resilience.
Aligning action between sectoral actors isn’t without hiccups, however. Rudy Verstappen offered an example of Altera’s hands-on approach to managing climate risks in their portfolio alongside other public and private stakeholders. Altera helped to secure the installation of a green roof at a large commercial property, but this endeavor wasn’t without trade-offs: ‘‘While these partnerships are invaluable, they often move more slowly than private-sector initiatives.” This raises questions about the extent to which cooperation can become streamlined and mainstreamed in the future.
Discussants also reflected on strategic interdependencies between spatial scales and time horizons of intervention. One key example of this dilemma can be found in the unembanked waterfront areas of Rotterdam. Thousands of residential and commercial properties are in these areas, with substantial new development on the horizon. Here, the delta-wide decision on whether to open or close the New Waterway, and to what protection standard any new large-scale flood measures should take, has profound implications for the types of strategies that are most effective for managing the long- exposure of urban areas.
While some participants argued for a consistent, standardized approach to addressing climate risks in these areas, others underscored that addressing the complexity of climate risk and resilience planning is difficult, given a range of factors—from uncertainties in climate science to the undetermined interconnection between local and systems-level approaches for managing water, as examples. Longer-term strategic decisions have nearer-term consequences for climate risk assessment and resilience investment strategies in areas like Rotterdam, where massive investments in the built environment continue to be made.
Bridging individual and collective action also emerged as a central dilemma. Discussions over proposed climate risk disclosure for homebuyers and climate labels for houses emerged as examples where this question remains unresolved. Many stakeholders agree that climate risks are not yet sufficiently integrated within real estate markets, as in property valuation or financial product design. Interventions like labeling are seen as one way to address this challenge. Yet participants also warned that these measures could disproportionately harm individuals and worsen existing inequalities in Dutch society.
Klimaatrisico’s gemeten: hoe modellen waterlabels kleuren
The Rotterdam neighborhood of Bloemhof became a focal point of discussion on the latter tension. Here, intensifying land subsidence challenges and longer-term future-proofing opportunities require coordinated intervention between residents, the municipality, financial institutions, and other stakeholders. While professionals discuss climate risks and solutions from an analytical and policy-driven standpoint, Ellen van Bueren (Professor of Urban Development Management at TU Delft and Lead of the Red&Blue program) reiterated the need to take the resident perspective: “Many residents are already struggling, and even more may face difficulties in the near future. How prepared we are when these problems become immediate crises for local communities?”
Hanke Haagsma acknowledged this challenge in Rotterdam, where residents and the municipality face a growing dilemma. The urgency isn’t yet great enough to trigger large-scale government intervention, but the issue is too significant to overlook. Some residents recognize the need for action while others don’t or can’t, for various reasons. For all groups, financial constraints—such as mortgages or personal wealth tied to their homes—make action difficult. This leaves the issue in a gray area between personal responsibility and collective action. The situation requires proactive and inclusive approaches before it escalates into a crisis, according to Haagsma.
Final Words
“Can we have open conversations about an urban area’s future, considering climate risks and the investments required for transformation?”. Co Verdaas concluded the session by acknowledging the concerns raised and emphasizing that serious work is already underway—not just in the Delta region but across the Netherlands. While uncertainties persist, collaboration between the public and private sectors continues to strengthen. The conversation is far from over—new questions will emerge, and so too will strategies evolve. However, the key message is clear: through sustained cooperation and collective climate adaptation strategies, cities, neighborhoods, and residents can become more climate-resilient in the face of future challenges. This lies at the heart of the Red&Blue program.
