Financing the foundations of stability

A reliable water supply, electricity when we need it and a home protected from flooding. These are the foundations of everyday life. When the infrastructure behind them fails, households bear the consequences. As leaders gather for COP31, global progress on climate action means protecting those essential services must be central to the discussion. Investing in resilience is a national and economic security priority, and the decisions we make now will shape how well our homes, communities and essential services withstand disruption for decades to come. Recent UK government advice urges households to ‘Be Ready’ and prepare for disruptions. It is a practical reminder of how much daily life depends on infrastructure we rarely notice until it stops working. Following the UK’s hottest summer on record, and with El Niño expected to strengthen into a very strong event, the need to prepare is clear. The costs are already substantial. In the UK, we are particularly susceptible to flooding, and this year proved that we are not immune to heatwaves and drought. Flooding costs the UK an estimated £2.3 billion annually,1 while the five heatwaves between May and July 2026 were estimated to have caused more than £4.4 billion in lost productivity.2 For households, the consequences can include damage to their homes and disruption to work and daily life. Investing in resilience can reduce that disruption, protect essential services and support Britain’s long-term prosperity. Flooding costs the UK an estimated £2.3 billion annually, while the five heatwaves between May and July 2026 were estimated to have caused more than £4.4 billion in lost productivity For Lloyds Banking Group, serving households and businesses across Britain, this connects the infrastructure we help finance with the services our customers rely on. Progress will depend on filling the £11 billion annual gap in UK adaptation investment identified by the UK Climate Change Committee, with the government, infrastructure owners and financial institutions each having a role in turning that shared interest into practical investment. The Haweswater Aqueduct Resilience Programme illustrates how long-term finance can support that goal, with replacement infrastructure designed to last for over 100 years. The approximately £3 billion program is replacing six tunnel sections of an aqueduct that supplies drinking water to around 2.5 million people across Cumbria, Lancashire and Greater Manchester. A £300 million National Wealth Fund credit-enhancement facility, backed by a HM Treasury guarantee, helped reduce financing risk and attract private investment. Scottish Widows is supporting the program as a senior lender, with Lloyds providing banking services. Most importantly, households will benefit from a continued, reliable water supply for generations to come. Public support and private finance can work together to fund essential infrastructure, with clear responsibilities for delivery and benefits for the communities it serves. Investment elsewhere should start with where disruption is most likely, how businesses can prepare and what protection suits local needs. The priority is fewer interruptions to daily life and the essential services communities rely on. Insurance has an important role in making resilience investment work for households as well as businesses. Insurers’ understanding of physical climate risks can help owners, lenders and investors assess where protection is needed and the value of reducing exposure. Working with the government, the industry can explore how investment in prevention and longer-term approaches to risk can help sustain access to cover. The aim should be to reduce both the damage people experience and the financial strain that follows rather than relying on insurance alone after an event. Businesses need to adopt commercially pragmatic mindsets that answer honestly how their assets and operations are designed for climate conditions that are already disrupting