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 how we live and operate. Those answers carry real financial consequences: insurance costs and availability, access to capital, asset valuations, financing terms, and long-term competitiveness. Preparedness is the difference between an organization’s short-term viability and long-term prosperity.

Better data can help lenders, investors and insurers understand where infrastructure is exposed and assess the value of measures to protect it. Climate risk varies from place to place, so investment decisions need to reflect local conditions. The task is to make that understanding a routine part of financing, valuation and insurance decisions by directing investment toward the resilience needs of communities instead of waiting for disruption to reveal them.

Businesses need to adopt commercially pragmatic mindsets that answer honestly how their assets and operations are designed for climate conditions that are already disrupting how we live and operate

Finally, the public and private sectors must finance nature-based and engineered solutions together, because truly resilient infrastructure depends on both. Nature is one of our greatest assets: nature-based solutions such as wetland restoration can help protect communities from extreme weather, lower long-term costs, and generate wider economic, environmental and social value. When we look beyond individual megaprojects and take a holistic approach that includes the natural world, we can most effectively protect the critical functions of society, nature and economy alike.

The UK has deep expertize in finance and insurance. The challenge is to turn that expertize into more reliable services for households and more resilient places to live and work.

The government can provide clear frameworks that support long-term investment. Infrastructure owners should plan for future climate conditions. Lenders, investors and insurers should use their understanding of physical risks to inform where and how capital is deployed.

COP31 is an opportunity to focus attention on that task. The priority is investment that helps keep water running, power available and homes better protected from flooding. 

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References

¹ https://www.gov.uk/government/publications/estimating-potential-economic-costs-of-flooding/estimating-potential-economic-costs-of-flooding#calculating-potential-economic-costs-aad-of-flooding

² Verdant (2006), The Cost of Heat Summer 2026 Heatwave: an economic update

Night falls in the European capital. Everything’s quiet, but the nightmares are about to begin.

Viktor Orbán’s ghost haunts the Schuman roundabout; ash from the bonfire of red tape covers the Justus Lipsius building; Ursula von der Leyen’s chief of staff, Björn Seibert, chases after staffers demanding to know what “associate membership” for Canada actually means; and MEPs tremble at the prospect of construction workers uncovering the skeletons of political intrigues past during renovations.

Scared? You should be.

Here’s our guide to who is terrified of whom in the Brussels bubble. 

Everyone is scared of Marine Le Pen

The person haunting EU diplomats, officials and lawmakers is French presidential front-runner Marine Le Pen. Will she really halve Paris’ contribution to the EU budget, as promised? Will she pull Italian Prime Minister Giorgia Meloni away from the Brussels mainstream? And will she demand von der Leyen’s head?

The bubble had warmed (slightly) to the idea of Jordan Bardella in the Élysée Palace, after his years leading the National Rally’s European operation revealed a certain pragmatism toward Brussels — only for those hopes to be shattered when a Paris appeals court cleared Le Pen to be a candidate for the presidency.

The next ECB chief is scared of Jean-Luc Mélenchon

The European Central Bank president is the euro’s last line of defense against unorthodox national economic decisions — but that could be tested by French presidential candidate Jean-Luc Mélenchon, who is on course to reach the runoff after vowing to set billions of euros of French debt “on fire.” His incendiary plan calls on the Frankfurt-based ECB to waive interest payments on a vast tranche of French bonds — an unorthodox, perhaps impossible, maneuver that critics warn could even see France kicked out of the euro.

Now that we know Christine Lagarde will step down as ECB president in February, what France’s presidential candidates want to do about its monumental debt pile will haunt the race for her successor, with Dutchman Klaas Knot and Spaniard Pablo Hernández de Cos as the two frontrunners.

Lobbyists are scared of ChatGPT

The number of amendments lawmakers have filed has exploded since generative AI arrived, with key EU laws now facing thousands of proposed text changes. Parliament officials don’t think it’s a coincidence, with some pointing to amendments written in suspiciously bot-like language, and others saying sometimes amendments cite legislation that does not even exist.

The growing pile of amendments is haunting lobbyists, parliamentary assistants and officials forced to track and sort through it all — along with the fear that AI could eventually replace them. Spare a thought, too, for the MEPs who may have to vote through the amendments one by one, with hands raised in plenary. 

Commission officials are scared of Austria’s Europe minister

Well-heeled Commission officials (and their families) are spooked by Austria’s Europe Minister Claudia Bauer, who has been leading a push to slash the Commission’s administration expenditure — which pays eurocrats’ salaries and offices — in the next seven-year budget. The campaign, backed by most EU capitals, resulted in an 8% cut to the admin budget in the latest budget proposal.

Bauer is so feared that EU officials joke they reduce their delegations’ size whenever they travel to Austria.

Jessika Roswall is scared of Stéphane Séjourné and Valdis Dombrovskis

Environment Commissioner Jessika Roswall and her department have reason to fear industry boss Stéphane Séjourné, who is taking the lead on the upcoming Circular Economy Act, despite Roswall’s official title of Commissioner “for a Competitive Circular Economy.” Making matters spookier, Roswall’s environment department now shares the Breydel building with Séjourné’s internal market and industry department, setting the stage for some chilling corridor encounters as Roswall pushes for greater environmental protection while Séjourné prioritizes industrial growth.

Roswall is also under pressure from EU simplification chief Valdis Dombrovskis to cut red tape on several environmental laws. The Latvian commissioner, who oversees the omnibus packages, wants a deal before year-end. Meanwhile, the center-right European People’s Party continues to press the Commission to reopen laws on birds, habitats, and water — the EU’s oldest nature protection laws — so they can be simplified too.

Alexander Stubb is afraid of Kaja Kallas and António Costa

Kaja Kallas has not publicly addressed the call that Finnish President Alexander Stubb made to Russia’s Vladimir Putin, but the EU’s top diplomat has made clear she dislikes such outreach. Still, if Putin offered serious talks and concessions, Kallas would be the obvious person to answer: as coordinating EU foreign and security policy is her job. “Of course I will talk if such an opportunity presents itself,” she told Estonian media in September when asked about speaking with Putin or his Foreign Minister Sergei Lavrov.

Also reaching for the phone: António Costa. EU diplomats note that the European Council president represents the bloc at the leaders’ level abroad. That institutional turf war may explain why Stubb stressed that he and Norwegian Prime Minister Jens Støre spoke only for their own countries — not for Europe.

Manfred Weber is scared of his own group …

What keeps the leader of the European People’s Party — Europe’s largest political family — up at night? Divisions within his own ranks. So far, Weber has kept a tight ship and wants to reunite his troops ahead of the 2029 EU election, which he is casting as a battle against the far right. But that may prove tricky as the EPP’s national delegations increasingly clash over whether to work with the far right or isolate them.

… and the group is scared of Ouarda Bensouag

Central to Weber’s strategy is Ouarda Bensouag, the group’s secretary-general and his chief of staff. One of his most trusted lieutenants, she has a reputation as a smart but ruthless operator who EPP staffers fear when crossing paths in the Parliament’s labyrinthine hallways.

No one is scared of the Parliament … but they should be

Parliament’s attempts to spook capitals over the next long-term budget have been borderline tragic so far: It keeps threatening to kill the budget, but nobody seems to care or believe it will.

They should care. When it comes time to pass the budget, 361 of 720 votes will be needed, and the margin could be razor-thin in a fragmented chamber that’s hostile to plans to pool farm and regional funds. The louder MEPs protest — and the longer the Council ignores them — the more determined they become to prove the threat is real.

By Max Griera, Gregorio Sorgi, Kathryn Carlson, Nick Vinocur, Jakob Weizman, Fiona McNally and Eliza Gkritsi

Ask European Union leaders what they think of Mark Carney’s climate credentials, and you’ll get a gushing response.

“We see the world with the same eyes: from AI to climate change,” European Commission President Ursula von der Leyen said in her State of the Union speech last month, where the Canadian prime minister was the guest of honor.

“Canada and the EU are very, very like-minded,” the bloc’s climate chief, Wopke Hoekstra, told POLITICO in an interview when asked about his hopes for climate collaboration between the two powers ahead of this week’s EU-Canada summit in Montreal.

But this rosy view sidesteps a less comfortable reality: Canada is a major fossil fuel producer whose climate ambitions fall far short of Europe’s.

And under Carney, those ambitions are weakening.

Last year, Canada produced more crude oil than any other country outside the big three producers, Russia, Saudi Arabia and the United States. Oil and gas are Canada’s biggest exports by far, and the industry lobby is an influential force in Ottawa.

In his previous life as a central banker, Carney was considered a climate champion. POLITICO even dubbed him an “eco warrior” in 2018. But since taking over as prime minister last year, he has weakened Canada’s climate policies at a rate few predicted, scrapping a national carbon tax and electric vehicle mandate and opening new oil and gas projects.

The list of climate laws Carney has watered down, repealed and canceled makes the EU’s own recent backtracking on green laws look minor. Some environmentalists argue it is comparable to U.S. President Donald Trump’s wholesale dismantling of environmental protections.

“The track the Carney government has taken on climate and environmental regulation has been a decisive move in the direction of the U.S.,” said Tim Gray, executive director of environmental non-profit Environment Defence. Carney, he said, “seems to be all in on fossil fuels.”

Keean Nembhard, a spokesperson for Canada’s Environment Minister Julie Dabrusin, told POLITICO the Carney government is “committed to fighting climate change and reaching net-zero by 2050 by taking a pragmatic and durable approach.”

“This includes building major clean energy projects across the country, driving mass electrification, and making significant investment in the low-carbon economy,” he said.

But Gray argued that Carney’s support for fossil fuels and weakening of environmental standards may complicate Canada’s attempts to forge closer ties with Europe, which has some of the world’s most stringent green laws.

Still, in Europe, Carney’s green image persists.

Last week, Belgian member of the European Parliament Saskia Bricmont gave expression to this faith in Carney’s commitment to climate issues when she called on him to lead a global push to put climate back on the agenda ahead of next month’s U.N. climate summit.

“Mr Carney … relaunch the fight against climate deregulation and for the restoration of biodiversity, and re-mobilize the international community around concrete, coordinated measures,” she said.

Carney’s green aura

Carney’s reputation as a climate champion is well earned. As governor of the Bank of England, he led a push among central bankers to take the economic risks of climate change seriously — memorably captured in his 2015 ‘Tragedy of the Horizon’ speech, in which he warned: “The catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors.”

In 2021, after he’d left the Bank of England, he became a United Nations special envoy on climate action and finance and launched a net-zero financial alliance with some of the world’s biggest banks.

But things changed dramatically when Donald Trump took back the White House, and Carney replaced fellow Liberal Justin Trudeau as Canada’s prime minister in 2025. At the time, Trudeau and his Liberals had been way behind in the polls, battered by Conservative leader Pierre Poilievre’s attacks on his climate policies — in particular an unpopular consumer carbon tax.

Carney’s first act as prime minister was to scrap that tax.

Following his surprise victory in the elections that April, Carney set about promoting Canada as an “energy superpower.” To the dismay of environmental groups, he supported the “Pacific Link,” an oil pipeline costing tens of billions of dollars, designed to carry Alberta crude to Canada’s Pacific coast for export to Asia.

He then pushed for thawing relations with Beijing in January, a not-so-subtle pitch to find a new crude oil client that isn’t the U.S. Germany, rushing to replace its dependence on Russian energy, signed a long-term agreement in July to buy Canadian liquefied natural gas from a proposed port in British Columbia, despite backlash from environmental and indigenous groups.

He also scrapped laws on electric vehicle adoption, dropped plans for an emissions cap on oil and gas companies, watered down an existing industrial carbon price and introduced legislation to weaken environmental permitting rules for big infrastructure projects, which critics dubbed the “bulldoze nature bill.”

A landmark moment, according to Gray, came in November 2025, when Carney signed a memorandum of understanding with the government of Alberta, Canada’s biggest oil-producing province. That document, which promised to turn Canada into a “global energy superpower,” contained a string of promises to promote oil and gas and water down federal climate laws.

So why the dramatic shift?

Carney, who has repeatedly positioned energy sovereignty as a bulwark against Trump’s economic aggression, offered his realpolitik response at an event in the heart of Alberta’s oil patch earlier this month.

“There’s a structural challenge of energy security and the existential challenge of climate change, and these challenges are forcing countries to think differently about where their energy comes from and on who they can rely on to supply it,” Carney said in Fort McMurray, Alberta on Oct. 1.

“Even under any plausible net zero scenario, the IEA [International Energy Agency] forecasts the world will still need tens of millions of barrels of crude a day. So the question is: who will emerge as the world’s trusted suppliers? It should be us. It must be Canada.”

Not black and white

Carney, to be sure, is no Trump. Unlike the U.S. president, he has retained his pro-climate rhetoric and promised to develop the country’s mining of critical minerals essential for the clean energy transition.

In May, he unveiled a national electricity strategy which aims to double Canada’s largely clean electricity grid by 2050 to meet soaring demand. “The path to net zero is electrification,” Carney said then.

In August, he announced C$10 billion in federal support for the Churchill Falls hydroelectric project in Newfoundland and Labrador, saying it will be the largest clean energy project in North America, capable of generating enough electricity to light up the equivalent of Canada’s three largest cities.

Nembhard, Environment Minster Dabrusin’s spokesperson, also pointed to new electricity transmission lines, electric vehicle subsidies and a C$2 billion plan to retrofit homes with heat pumps.

Canadian climate activist Alex Cool-Fergus said she does not think Carney “believes that oil and gas is the future,” but is simply being pragmatic about Canada’s economic reality.

“The electricity strategy that came out in May was incredibly important, and actually gives us a better idea of what his thinking is for the future,” she said.

Trudeau’s approach to climate change was “very much values-based, and it was about doing the right thing,” said Cool-Fergus. “I think that’s hit its limits. Carney’s approach makes more sense for the world of 2025-2026.”

The limits of the partnership

Hoekstra, the EU’s commissioner for climate, said he wants to deepen ties with Canada. “Given all the complications the world is facing, it is imperative to team up more closely with your closest partners,” he said. But he’s realistic about how far that relationship can go.

Hoekstra has ambitions of cementing the EU into a global network of economies with carbon pricing regimes. While he conceded nothing is “off the table,” he acknowledged linking the EU’s Emissions Trading System with Canada’s “quite different” version, which varies from province to province: “You’re talking about a completely different horizon, and that is not something we would attempt in the very short run.”

There are, however, other ways Hoekstra believes the EU and Canada can closely link on environmental issues.

“Doubling down, tripling down on electrification, on solar, on wind, on nuclear, on batteries,” he said, adding “that is one area that I think is potentially very fruitful for my portfolio.”

Another is critical raw materials, a key focus of this week’s summit.

Brussels is exploring ways for the European Investment Bank, the EU’s lending arm, to help finance the mining of Canadian mineral deposits that could supply the bloc with an alternative to Chinese-produced metals, with a framework agreement expected to be signed during the summit. Lithium, copper, nickel, and other key ingredients for electric vehicle batteries and clean energy technologies essential for decarbonizing Europe are abundant but often undeveloped all over Canada.

This week’s summit will also explore investing in infrastructure on Canada’s east coast to liquefy and ship Canadian gas to Europe, a move that could help the EU diversify its supply away from the U.S., which, along with Norway, has become Europe’s dominant supplier since it cut off Russian gas imports following the full-scale invasion of Ukraine.

Many EU member countries will welcome success on these goals. But Gray warns that closer ties with Canada could lead to deeper penetration by the country’s powerful fossil fuel lobby, which he described as a “major, major force.”

“They’ll be spending time trying to make sure the alignment with the EU is in a direction that favors them,” he said.

The EU’s lack of oil and gas resources — and, by extension, the absence of a powerful fossil fuel lobby — has kept climate policy relatively bipartisan in the EU. Could inviting a fossil fuel “superpower” into the fold as an “associate member” change that?

“That would depend very much on what is an ‘associate member,’” Dutch Climate Minister Stientje van Veldhoven-van der Meer said.