... Beyond the Trends
Financial Markets as accelerators towards Net Zero targets
Over 40 years, Climate Change is still being debated and partially acted on, yet not enough of that has translated into impact. Translating climate pledges into substantial action remains one of the biggest challenges facing climate action. Progress is slow, with adaptation costs for LMICs in a plausible range of US$ 215B to US$ 387B yearly in the current decade.
Opportunity now exists to harness the power of markets. Recent Climate Summits (incl. ACS23 in September 2023) showed a palpable sense of momentum building up, and markets are recognizing that this problem must be tackled head-on. They are recognising the immense potential for investment – and for risk-adjusted returns – in adaptation at levels never previously experienced.
Markets can play a major role in solving this issue, with blended finance centrally positioned to combat climate change by leveraging Private Equity Financing to complement Concessionary Finance and play an out-sized role in closing the adaptation funding gap. While Public Impact Funds seek highly scaled mature solutions, Private Equity Financing is well-placed to invest in early-stage innovations. Their appetite for investment in cutting-edge innovations could catalyze and shape the green-and-just transition. This creates an opportunity for independent private investment firms with sector-specific specialized knowledge to find the right opportunities.
Further, accelerated progress to net zero can be catalyzed through public-private partnerships that bring together substantial volumes of capital from private investors keen to support climate response but have a different risk appetite as they are still building the risk assessment and analysis capabilities. While public sector, governments, multilateral development banks, regional development banks, and export-credit agencies all have a very different risk appetite, they have an equally strong commitment to the climate issue.
More Insights
Knowledge is the first step; action is the leap. Check below to help support efforts to bridge the gap between awareness and impact.
National GHG Emissions Per Capita From The Healthcare Sector In 2020.
Ocean Heat and its Climate implications on Humans and Ecosystems around the World
