What if we saw the climate challenge differently?

Provide clarity, certainty and transparency through NDCs to align public and private investments with climate mitigation and adaptation objectives

As the principal policy frameworks setting out governments’ climate priorities, Nationally Determined Contribution (NDCs) are critical to provide the certainty, predictability and confidence businesses need to make long-term investment decisions. 

While many governments have now submitted updated NDCs, there remains significant scope to strengthen them by providing greater clarity on implementation pathways, policy and regulatory frameworks and investment opportunities. Close collaboration with the private sector will be essential in this effort. 

To support implementation, NDCs should also promote coherence across climate, energy, industrial, financial and trade policies and provide greater clarity on planned legislation, regulation, use of mitigation policies (such as carbon pricing), financial  incentives, investment frameworks and project pipelines. Governments should also demonstrate how they intend to couple climate legislation with employment and social planning to ensure a just transition of the workforce and the creation of decent green jobs.

Initiatives to develop global roadmaps, including the Brazilian roadmap on transitioning away from fossil fuels, can provide useful direction. But the real acceleration of the energy transition will depend on how these commitments are translated into national implementation through NDCs, strong enabling policies and regulatory frameworks and incentives that enable business to accelerate investments in the scale-up of renewable energy and green technology and energy efficiency. 

Introduce targeted adjustments in key financial regulations and leverage Multilateral Development Banks (MDBs) as catalysts of private investment to quadruple international climate finance going to emerging markets and developing economies (EMDEs).

Finance is the single greatest enabler of climate action, yet high capital costs and perceived investment risks continue to constrain investment where it is needed most. Emerging and developing economies receive just 14% of international climate finance yet need an additional US$450 to US$550 billion a year to stay on a net-zero path. 

Under the current macroprudential frameworks, such as Basel III, banks are disincentivised from financing climate projects in emerging and developing markets. Targeted adjustments – such as better recognition of development bank guarantees and other risk mitigation tools – could quadruple the bank capital available for climate projects in emerging markets without compromising global financial stability.  

Alongside these reforms, greater use of guarantees and blended finance by MDBs as well as stronger domestic enabling environments and investment frameworks, will be essential to unlock private investment at the scale needed. 

Expanded carbon pricing and high integrity carbon markets should also be leveraged as complementary tools to mobilise finance and raise mitigation and adaptation ambition. Harmonised carbon accounting methodologies and standards can further help scale demand for and investments in low-carbon products and activities. 

Related resources: 

• The opportunity to align Basel’s global banking rules with climate needs  

• The opportunity to turn trade finance green, at scale 

• Learn more about our work on: Carbon strategies 

Remove barriers preventing the scaling of private sector adaptation investment from closing the global adaptation funding gap.

Climate-related events are intensifying, making adaptation critical for resilience. Yet, global efforts remain fragmented and underfunded – especially in developing countries, where vulnerability is highest and financial capacity is lowest.

Businesses are already on the front lines of climate impacts, facing operational disruptions, supply-chain vulnerabilities and productivity losses. Yet private investment remains constrained because the commercial case for adaptation is often unclear and investment opportunities are limited.

Scaling private capital for adaptation requires targeted reforms in three areas: data collection (ensuring access to high-quality, open climate risk data, enabling better risk assessments and adaptation planning); governance (supporting better engagement of business in domestic climate/adaptation planning); and finance (creating financial incentives for adaptation and spaces/sandboxes for testing promising solutions, i.e. insurance-linked instruments, blended finance tools for adaption).

Related resources: 

• The opportunity to move beyond 8% private finance for climate adaptation  

End the patchwork of global climate-trade policies and ensure measures support, rather than undermine, equitable trade in sustainable goods and services.

Climate and trade policies are becoming increasingly interconnected and misaligned. Trade-related climate measures, particularly carbon border levies (also known as CBAMs or BCAs), risk disproportionately disadvantaging developing countries and creating barriers to market access.

Trade-related environmental measures should enhance, not restrict, markets for sustainable goods and services. The current patchwork of conflicting global rules needs to end. Climate and trade ministers must come together and create new principles to ensure trade and climate policies are better aligned and mutually reinforcing