Climate Finance – Looking Ahead to 2025
This year’s UN Climate Change Conference, COP29, concluded in Baku on 24th November. A new climate finance goal was the locus of the two-week agenda, with the New Collective Quantified Goal (NCQG) amounting to $300bn, to be contributed to by developed countries on an annual basis. The NCQG will also scale up finance to developing countries, from public and private sources, with an agreed target of $1.3 trillion per year by 2035. Although this outcome fell short of expectations, efforts must now be accelerated to deliver the NCQG and bridge the climate finance gap.
UK Government announces funding for developing countries to roll out clean energy
At COP29, a new package of support was unveiled by Energy Secretary Ed Miliband for countries on the front line of the climate crisis to make their transition to clean energy.
The funding will help climate vulnerable countries, including African nations and small island developing states (SIDS), to develop new low-carbon technologies, with innovations in energy storage, zero emission generators and clean transport. It will also support innovations such as material and system efficiencies, which will be instrumental in decarbonising steel, chemicals, cement and concrete industries.
The funding is part of the UK’s existing £11.6 billion International Climate Finance commitment between 2021/22 and 2025/26 which is allocated from the Official Development Assistance (ODA) budget – delivering on a global commitment of 0.5 per cent of Gross National Income for developing countries.
The funding pledges announced include £45 million for the World Bank’s Energy Sector Management Assistance Programme (ESMAP) to support developing and emerging countries addressing energy challenges, £15 million for Innovate UK to support clean energy innovation in developing countries, £14 million for United Nations Industrial Development Organisation (UNIDO) to support the development of innovation projects in industrial decarbonisation and clean hydrogen, and £5 million to help developing countries tackle methane emissions in their fossil fuel.
Energy Secretary Ed Miliband said, “Climate change does not respect borders, and the UK has seen a year of record-breaking warmth. That’s why we are determined to lead from the front and drive global change, to protect future generations at home and abroad.
This funding commitment from the UK is what we mean when we say we are back in the business of climate leadership, supporting the world’s most vulnerable and unlocking the global growth benefits of decarbonising economies.”
Sustainable Investment Forum 2025
The development and use of innovative finance mechanisms and pooling of various sources will become critical for mobilising the investment required to tackle the climate challenges. Convening stakeholders to share insights and align on common goals will support effective resource allocation, foster sustainable partnerships, and address complex challenges in a coordinated manner.
On 29 April 2025, the Sustainable Investment Forum Europe 2025, hosted by Climate Action in official partnership with UNEP-FI, will return to Paris for its 8th annual edition.
The Forum will emphasise the critical need to mobilise and align financial resources within Europe’s sustainable finance ecosystem, facilitating a just transition. By harnessing collaboration between public and private sectors, discussions ions will explore how capital can be channeled into initiatives that promote social equity and environmental sustainability. This dual focus ensures that climate finance not only meets carbon neutrality targets but also enhances inclusivity, resilience, and equitable access to economic opportunities for all stakeholders.
The Forum empowers financial stakeholders to lead Europe’s sustainable economic transformation, advancing resilience, inclusion, and climate leadership throughout capital markets.
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