Action on Climate Finance

Plugging In Essential Infrastructure

Track the post Paris action
The COP21 Paris Agreement on climate change delivered a workable process for limiting global warming to 1.5°C. The agreement is, however, totally dependent on finance being available to implement the actions that nations “intend” as their contributions, their INDCs. If these INDCs are not successfully funded, then Paris will likely fail.

This devolved country level INDC approach offers new possibilities for all forms of finance to participate including public and private, commercial and philanthropic sources. However, to make rapid progress requires greater co-ordination and co-operation between funders to ensure finance flows at sufficient scale. This is especially the case in developing countries.

To this end, we are calling for 3 essential actions to accelerate climate funding flows. They are described in the Call to Action which you can download opposite.

The 3 actions are designed to maximise the availability of finance for countries wanting to implement their planned contributions. The single aim is to eliminate funding barriers by aligning investor needs with INDC project proposals so many transactions happen. From this will flow confidence, and from confidence will flow the ambition necessary to achieve a “1.5C world” in the span of a generation.

This topic is relevant to many parties including governments, global and local organisations, companies and finance providers of all kinds.
If the INDCs are not successfully funded, then Paris will likely fail.

INDCs offer new possibilities for all forms of finance to participate - public and private, commercial and philanthropic

Co-ordination and co-operation is required between funders to ensure finance flows at scale.

The single aim is to eliminate funding barriers by aligning investor needs with INDC project proposals so many transactions happen.
1. Create a uniform categorisation of climate actions, based on the INDCs, to provide a tool for reliable data gathering and thus accurate analysis and understanding of needs and opportunities
2. Create “Climate Investment Plans” (CIPs) at a country level, tied to INDC implementation processes and setting out investable funding needs and opportunities.
3. Establish a climate investment practitioners network, based on existing associations, and bringing together all participants including market research, policy makers and intermediaries as well as sources of finance, in active partnerships to promote transaction flows. The network could also house necessary climate finance infrastructure, for example the standard categorisation

What People are Saying

Rachel Kyte, former World Bank Group Vice President and Special Envoy for Climate Change:
“The UN has calculated that the INDCs put us on track for 2.7 degrees warming - better than where we were headed but still perilously high. However, to turn them from words to low carbon growth, jobs and opportunity, we have to mobilize the finance needs laid out and put in place the sensible macroeconomic and fiscal policy packages that support this new trajectory.”

“Alongside those, we need to create infrastructure for the climate finance sector itself to work effectively. I therefore commend this initiative as the means for finance practitioners to make progress in promoting deal flows at both global and country levels.”

Tracy Cai, Co-founder and CEO of SynTao Green Finance:
“None of the actions we are calling for are new as such. They all build on work that is already being done. But together they create a platform for people to work together at scale, on the basis of better data, more visibility of investment pipelines, and better planning and dialogue. They are vital infrastructure that needs to be plugged in for the funds to flow.”

Nick Mabey, Chief Executive and a founder director of E3G:
“The country INDC submissions are a massive step forward. The data they provide is a compass pointing the way to climate mitigation and adaptation solutions. We can now map out a “bottom up” pipeline of projects. With both compass and map we know where money is needed to determine the most appropriate forms of financing.”

Assaad Razzouk, CEO Sindicatum Sustainable Resources:
“Climate Investment Plans are a vital window to the world for finance at country level, and a vital tool for increasing ambition on mitigation targets over time. A Paris climate agreement, no matter how tentative, will involve more than 160 countries publishing ‘low-carbon business plans’ for their economies, describing what each will do to help limit global warming.

“The plans, based on the INDCs, are the driving force of COP21 and represent both a development pathway and a multi-trillion-dollar investment opportunity for the private sector if they are clearly delineated. If it can be shown, through transactions getting done, that public and private sources of finance can be mobilised at scale for the implementation of these plans, we will get confidence that much more can be achieved than a Paris agreement, on its own, will probably yield.”

Farhana Yamin, CEO and Founder of Track0:
“Establishing a climate investment network would create a real catalyst to effective deal flow. Far beyond just a “talking shop”, its sole objective would be to scale up the flow of transaction opportunities – whether these be concessional or commercial.

“Looking across at the “impact investing” world, we can see a possible model in the Global Impact Investing Network, which was only established 6 years ago but already has over 200 members – and they’re not just investors, but all kinds of stakeholders getting things moving forward.”

James Cameron, Chairman, Overseas Development Institute:
The initiatives in the Call to Action create coherence in climate financing. They complement and go beyond many past approaches, in that they focus 100% on promoting transaction flows. And flows right across the spectrum, from grants to purely commercial transactions.

Amal-Lee Amin, Chief of the Climate Change and Sustainability Division, IDB:
“The Inter-American Development Bank (IDB) welcomes this Call to Action and its focus on mobilizing public and private sources of finance for implementation of countries’ INDCs. The Bank has worked closely with many LAC Governments in the design and development of the national climate strategies and plans that underpin these INDCs. Coming out of Paris it is essential that these commitments are translated into investment plans and we look forward to collaborating with others to mobilise the scale and scope of finance that will be required.”

Virginie Pelletier, Head of Sustainable Investment and Finance, BNP Paribas CIB:
“Defining Climate Investment Plans of countries will greatly assist in focusing the international and domestic capital markets on practical investment needs and opportunities associated with financing the economic transition to a low carbon economy, and thus to further sustainable economic development in the coming years.”

Fiona Reynolds, Managing Director of the Principles for Responsible Investing:
“Investors are looking for low carbon investments. Governments that identify and support specific low carbon infrastructure assets for investment are going to attract the most interest from the private sector.”