Poverty and vulnerability to shocks are widespread in Nepal. Nepal is highly vulnerable to substantial natural hazards, including earthquakes, floods, drought, and landslides. The difficult and varied topography and the significant social vulnerability make the country particularly susceptible to the negative impacts of climate change. The shocks devastate especially the poor and the vulnerable. A quarter of the population is poor, and a significant share of the population is at risk of falling into poverty as a result of shocks. Nepal has a large portfolio of social protection programs, which, however, are not yet adaptive. The programs are mostly categorical in nature and not designed to build resilience of the poor and vulnerable households or respond to shocks. The Disaster Risk Reduction and Management Act of 2017 is the cornerstone of the government's disaster risk management strategy. With this law, the government has broadened its focus from the traditional reactive approach to a more comprehensive disaster risk management strategy that focuses on all stages of the disaster management cycle: mitigation, preparedness, response, and recovery. The Act also has provision for addressing the impacts of disasters on livelihoods, in addition to housing and infrastructure damage. It creates a National Disaster Risk Reduction and Management Authority, which has not yet been established.