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Resilience rating system: A methodology for building and tracking resilience to climate change

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Introduction and objectives of the Resilience Rating System

Climate change and natural hazards cause economic losses that threaten development and long-term growth. Severe rainfall can cause mudslides and road washouts, while floods can contaminate water supplies. Higher temperatures can reduce the efficiency of electricity transmission and distribution, and place stress on grid networks from increased cooling demands. Droughts can harm livestock and crop productivity, while changes in rainfall patterns increase the risk of crop pest infestations that threaten food security. Resilience is the capacity to prepare for these types of disruption, recover from shocks, and grow from a disruptive experience. Development agencies have committed to do more to boost the resilience of countries around the world. With the increase in attention to and investments in disaster risk management and climate change adaptation, it becomes more important to track performance, progress, and development outcomes for resilience.

To better monitor adaptation and resilience-related action, the World Bank’s Action Plan on Climate Change and Resilience committed to create a Resilience Rating System (RRS) to complement existing methodologies on tracking climate-related finance and increase ambition for climate-aligned development. The main objectives of the RRS are to:

» Better inform decision makers, client countries, and other stakeholders. The RRS provides specific assessment and reporting criteria that can be used to track resilience, either by how a project is designed or how it provides the tools, institutions, and infrastructure needed to cope with climate change impacts and natural disasters. The RRS methodology can be applied to any investment, including private sector projects.

» Create incentives for more and better climate adaptation. Enhanced transparency and standardized reporting can create financial incentives. Effectively communicating a project’s climate resilience to potential investors can attract finance towards projects that are climate resilient or support climate resilience objectives.

» Identify best practice. The rating system can help identify best practice, allowing quicker and better learning to be scaled up from the best projects and practices across sectors and countries, within and outside the World Bank Group.

» Provide guidance. The RRS provides guidance on ways to incorporate appropriate risk reduction measures into project design and improve the quality of development projects. It also accommodates flexibility for different sectoral and country contexts.

The RRS does not attempt to solve all challenges related to tracking and monitoring climate change action. Rather, it aims to guide institutions, private sector participants, and project developers—especially in sectors that do not traditionally incorporate climate risk—that are looking to improve climate resilience in project design and outcomes. In parallel, the RRS helps streamline World Bank Group corporate climate commitments related to adaptation and resilience under one process. Specific implementation guidance for World Bank Group operations will be part of a separate note, and sector-specific versions of this methodology will be developed over time.

Beyond the World Bank Group, other financial actors and development institutions can apply the RRS as an input in decisions to finance and implement projects, or to monitor (and report on) how they include climate change in their decision making. The RRS can also be a building block for rating portfolios, companies, and countries—for example, by aggregating project ratings in a portfolio. There are, however, different ways of aggregating ratings and this question is not treated in this document.

The note also provides a summary of the two dimensions for rating resilience, an overview of the rating criteria, and examples of sector methodologies that correspond to certain ratings. See the full RRS methodology note for additional guidance and project examples.