Ahead of COP28, governments are under pressure to deliver on a number of existing climate finance commitments – including the “loss and damage” fund announced at last year’s summit and the USD100 billion that was pledged to developing economies starting in 2020.
Climate finance remains a contentious issue. Knight, however, notes that more capital is flowing from a growing range of sources. One prominent example is the new generation of philanthropic financiers such as Amazon founder Jeff Bezos, whose Earth Fund has pledged to donate USD10 billion to environmental projects by 2030.
“In the last couple of years there has been a philanthropic push on climate finance from entrepreneurs,” says Knight. “That brings with it a different, more commercial mindset than traditional concessional lending or grants.”
Sovereign wealth funds (SWFs) have also been ramping up their focus on climate.
According to an Invesco study in July last year, 75% of SWFs had a formal ESG policy in place, up from 47% in 2017. In addition, the One Planet SWF Network – founded by six funds, four of which are based in the Middle East – has launched climate disclosure guidance for private markets to help implement recommendations by the Task Force on Climate-related Financial Disclosures.5
Despite signs of progress, the Global Stocktake at COP28 will make it clear that the world is not yet on track to meet the goals of the Paris Agreement.
To make the upcoming summit the “solutions COP” that the UAE has talked about, governments, industry and the financial community will need to converge around projects that will deliver transformative results for the climate – before it is too late.