Center for Climate-Aligned Finance’s Post

What is transition finance? How can it help limit global warming? Check out our new primer on these and other top transition finance questions! https://bit.ly/4dcEP6L This is part of a series of articles and content on transition finance being led by RMI's Center for Climate-Aligned Finance, all of which you can find on our Transition Finance Resource Hub at https://lnkd.in/eeZKxhN9. If you have other burning questions about transition finance, do reach out and we'd love to discuss them with you and include them in our future work.

An RMI analysis of 17 #transitionfinance frameworks found…17 different definitions. Wall Street sees transition finance as a multi-trillion-dollar opportunity for investors — so what exactly are we talking about with transition finance, and why does it matter? Via GreenBiz Group’s Nico M.. Climate Bonds Initiative Glasgow Financial Alliance for Net Zero (GFANZ) #sustainablefinance

Public finance will be insufficient to address the climate crisis, which according to some estimates will cost $4.3 trillion by 2030. This means that new investors and finance mechanisms are needed ASAP to unlock private finance at scale. A recent report from the British Expertise International Climate Finance working group explores the role of climate finance and the challenges of mobilising capital, drawing from a series of case studies that includes our own Regeneration Rebuild Facility. Read more: https://ow.ly/9kmN50Qf11z #ClimateFinance | #ClimateCrisis | #Finance | #InvestInClimate | #COP28 | #RebuildFacility | #Development | #SDGs | #Impact

Empowering a greener future hinges on scaling up climate action. Green finance, bolstered by blended finance, is necessary to drive the conversation further. Alongside my colleague Layan Shadid, we explore the global challenge with a GCC lens! https://lnkd.in/e_ZYYRdM

2nd report of the Independent High-Level Expert Group in Climate Finance (IHLEG), which was tasked to assess how the climate finance system must change if it is to support the investment and actions necessary to deliver the goals of the Paris Agreement. Key messages: 📢 "Mobilising the scale and quality of finance to meet the large anticipated requirements will require an integrated approach that boosts all sources of finance – public and private, domestic and international – and uses their complementary strengths. 📢 Domestic resource mobilisation will be central, given its dominant role and importance in anchoring the macroeconomic sustainability of all finance. There is potential to boost tax revenues, including by harnessing new digital possibilities. Elimination of harmful subsidies and carbon taxation can generate much needed revenues to finance the transition. 📢 The role of the private sector in both investment and finance will be crucial and both domestic and international private finance must be boosted. International private finance to emerging markets and developing countries (EMDCs) for climate action will need to be increased by more than 15 times on current levels to deliver on climate mitigation goals. 📢 Multilateral development banks (MDBs) are key to both unlocking investment opportunities and mobilising finance, through own lending and catalysing private finance. They need to play a much stronger role in reducing, managing and sharing risk and in reducing the cost of capital. (...) Their role will need to change fundamentally and the scale of their support to triple by 2030. MDBs need to implement fully the recommendations of the G20 Expert Group on Capital Adequacy Framework to maximise capital efficiency, tap new sources of capital and guarantees (...). 📢 Concessional finance is the scarcest and most vital source of finance for meeting urgent and high priority needs. A fivefold increase in concessional finance is needed by 2030. Developed countries must lead by tripling the amount of bilateral concessional finance by 2030, but concessionary finance cannot be provided at the right scale with bilateral official development assistance alone. We must therefore pursue all options, including carbon markets (compliance and voluntary), expanded rechannelling of special drawing rights, international taxation and a bigger role for philanthropy, including from the corporate sector. 📢 These 4 sources of finance – from domestic public resources, the private sector, MDBs, and concessional – are mutually supportive and different combinations will be necessary for different investments and activities. The method of combination will be critical, as well as the overall total." 👉 See the report summary on the Grantham Research Institute on Climate Change & the Environment website: http://bit.ly/3RCaWF5 #justtransition #climatefinance

𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝟭𝟬𝟭: 𝗙𝗶𝘃𝗲 𝗰𝗼𝗺𝗺𝗼𝗻 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 𝗮𝗯𝗼𝘂𝘁 𝘁𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 𝗳𝗶𝗻𝗮𝗻𝗰𝗲. 𝗔𝗻𝘀𝘄𝗲𝗿𝗲𝗱 by Tricia Holland, Dr. Elizabeth Harnett; RMI In late June, during this year’s London Climate Action Week, RMI launched the Transition Finance Resource Hub at the Climate Innovation Forum. The Transition Finance Resource Hub serves as a comprehensive #resource for the #financialsector and other #stakeholders to learn about #transition finance, featuring how-to guides, case studies, video content, a library of media and foundational resources from a variety of organizations, articles, and more. The #ResourceHub is intended to be a live and growing repository for transition finance knowledge. As a primer for those less familiar with the concept, this article answers five key #questions you might have on the #topic before diving into the #information and #insights available on the Resource Hub. ❓ What is #transitionfinance?   ❓ Why is transition #finance important for limiting global warming to 1.5°C and reaching #netzero emissions?  ❓ How can we ensure that transition finance is credible and not just greenwashing? Credible #transition #finance should be:  🔹 Predicated on the existence of a credible #strategy for the counterparty to decarbonize over time 🔹 Tracked via annual #monitoring and #evaluation, with regular #reporting of transition #activities and #outcomes from agreed baselines. 🔹 Designed to avoid carbon lock-in.  🔹 Allocated with attention to a just transition ❓ What financial instruments should be in scope for transition finance?  ❓ What are the challenges of measuring transition finance?  🔹  Measuring the total volume of transition finance in the market   🔹  Measuring the emissions benefit attributable to transition finance  The details and the article link is here: https://lnkd.in/g3JW-5-M

This is worth a read, a lot in here to get your teeth into if you're interested in the nexus of finance, innovation and policy. UK-focus, but much of it is transferable. Richard Boyd - Mark's essay focusses on strategic transition planning at national level and across the economy. There's also a section that specifically addresses financial policy and the built environment - James Drinkwater, Hugh Garnett, James Hooton. Always nice to get a name-check, thanks Mark.

India's Ambitious Climate Finance Proposal to UNFCCC 1. Introduction to Climate Finance: Climate finance encompasses financial support aimed at mitigating and adapting to climate change, sourced from various channels. Established under the United Nations Framework Convention on Climate Change (UNFCCC), it operates on principles of equity, aiming to bridge the gap between developed and developing nations in addressing climate challenges. Key mechanisms such as the Green Climate Fund (GCF) facilitate resource allocation, while the Standing Committee on Finance ensures coordination and transparency. With a focus on long-term finance goals and enhanced data accessibility through the climate finance portal, nations aim to mobilise resources for sustainable outcomes. 2. Call for Increased Support: India advocates for a substantial increase in climate finance, urging developed nations to commit at least $1 trillion annually from 2025 to support climate action in developing countries. This proposal represents a significant escalation from the current target of $100 billion per year and is consistent with the G20 New Delhi Declaration. 3. Submission to UNFCCC: On February 13, India submitted a comprehensive proposal to the UNFCCC regarding the establishment of a new collective quantified goal (NCQG) for climate finance. This submission underscores India's proactive stance on climate finance issues. 4. Leadership and Collaboration: India takes a leadership role by potentially becoming the first country to quantify the climate finance goal. Additionally, India submits the proposal on behalf of like-minded developing countries (LMDC), highlighting a collaborative approach to addressing climate finance challenges. 5. Key Principles and Objectives: India emphasises that climate finance under the new goal must adhere to key principles such as affordability, accessibility, and additionally. Furthermore, India underscores the importance of incorporating equity and common but differentiated responsibilities and respective capabilities (CBDR-RC) into the NCQG framework. 6. Time Frame and Targets: India proposes a ten-year time frame (2025-2035) for the NCQG, with annual mobilisation targets for distinct periods (2025-2030 and 2030-2035). This approach aligns with Nationally Determined Contribution (NDC) cycles and UNFCCC processes, ensuring coherence and effectiveness in implementation. 7. Addressing Past Shortcomings: India acknowledges the unmet $100 billion per year target by developed countries and calls for proactive measures to fulfil climate finance commitments. By addressing past shortcomings, developed nations can enhance confidence and trust in the climate finance process, facilitating collaborative efforts towards achieving climate goals.

I am thrilled to have had the opportunity to contribute a short article to “Accelerating Transition: Climate Finance Policies to Prioritise in the First 100 Days”, an e-book published this week by King's Business School and University of Edinburgh Business School. The e-book - available at https://lnkd.in/efjnJSfV - brings together contributions from more than 30 thought leaders and experts from across the climate finance community. It is an honour to have been invited to submit my recommendations for the new government alongside such an esteemed cast list. Congratulations David Carlin, David Aikman, Dr Marc Lepere and Luca Taschini on this excellent initiative and for the invitation to contribute! My article, entitled “Government Climate Leadership: A whole-of-system response” argues that the new government has “a tremendous opportunity, both to advance climate action domestically and to use its influence and voice to drive progress internationally”. Building on a couple of projects with collaborators from across the system – Lisa Sachs, Perrine Toledano, Megan Bowman, Riona Bowhay, Tom Tayler, Agnieszka (Aga) Smoleńska, PhD, FIONA STEWART, Peter Knaack, Harald Walkate, Suzy Glass, James MacPherson, PhD, Rupert Pearce, David Marriage, Zsuzsanna Schiff, Sarah Reay, Christian Heller, Mark Gough – the article argues that systemic climate risk demands a whole-of-system response. I make six recommendations, under three headings: A.      Embed transition planning across the economy 1.      Develop a strategic national transition plan 2.      Move swiftly to mandate transition plans across the economy, using the Transition Plan Taskforce Disclosure Framework B.      Coordinate, collaborate, co-create and communicate with actors across the economy 3.      Establish dedicated mechanisms for government to work in partnership with companies and financial services firms 4.      Reconnect government and society to build trust, support and collective responsibility for climate action C.     Create the conditions for a scaling of sustainable finance 5.      Move decisively to mandate corporate reporting on sustainability/related risks and opportunities, in line with the ISSB Standards 6.      Set clear expectations that asset owners should consider systemic risks in their capital allocation decisions I look forward to reading the contributions from the other authors - including Catherine B. Mark Cliffe Joseph Noss Jo Paisley Julie Baddeley Sarah Bracking Heather Buchanan Richard Folland Paul Pritchard Heather Mckay James Vaccaro Fiona Watson James Alexander Ian Vijay Bhullar - and to seeing the new government taking a big leap forward in climate policy. #climateaction #transitionplanning #systemchange

📢 New Policy Recommendations for UK Climate Finance 📢 Bankers for Net Zero (B4NZ) are proud to share a new climate finance policy playbook edited by David Carlin, David Aikman, Dr Marc Lepere, and Luca Taschini which included a chapter from our CEO, Heather Buchanan. Heather used her chapter *Empowering SMEs for a Net-Zero Future: Challenges, Solutions, and the Importance of Collaboration* to explore the challenges SMEs face in sustainability reporting and to recommend the UK government develop standard reporting frameworks and automated tools like Project Perseus to streamline data collection and improve access to green investment. The e-book brings together experts from business, finance, international organisations, and academia and makes several climate finance policy recommendations for the new UK government. Key recommendations include: 🔼 Higher Capital Gains Tax for heavy carbon emitters ✅ Streamlined listing rules for green companies The e-book features contributions from nearly forty thought leaders, including with contributions from World Benchmarking Alliance, Global Systems Institute, University of Exeter, E3G, PwC, Climate Bonds Initiative, Chapter Zero, Global Association of Risk Professionals (GARP) and many others. The 25 practical evidence-based recommendations in the e-book could help to transform the UK into a net zero finance hub within the next six months. 🌱 Explore the recommendations in full using the link below! 🌍 King's Business School University of Edinburgh Business School