Climate Finance Insights

Triodos Bank just launched a €300 million fund that treats nature as a profitable asset class. Not a charity. Not an offset. A return. This has been years in the making. In 2024, Triodos Bank and Fondaction - a Canadian investment fund - announced a partnership with the explicit intention to jointly accelerate positive change in global finance. The goal was clear from day one: close the finance gap for biodiversity and natural capital in developed markets. Last month, that partnership became a fund. Triodos Investment Management and Fondaction Asset Management have launched Value Nature Fund I - a closed-end natural capital fund targeting €300 million, aimed at transitioning farmland and forests to regenerative, closer-to-nature practices across North America and Europe. The fund brings together Fondaction's expertise in impact-driven investments in North American environmental markets. And Triodos's track record in European sustainable food and agriculture systems. Two complementary networks. Two continents. One investment thesis. The financial case is explicit: The firms say the fund comes at a moment of unmatched opportunity - creating value from the transition towards sustainable food and timber supply chains, hedging portfolios against volatility and inflationary pressures, and enhancing the resilience of critical economic sectors. This is not the language of philanthropy. It is the language of a portfolio manager. The fund intends to classify as SFDR Article 9 - the EU's most stringent sustainable finance label - with measurable impact KPIs across biodiversity and ecosystem services, climate mitigation and adaptation, and social wellbeing. Performance is tracked and outcomes are reported. Jonathan Coupland, Portfolio Manager at Fondaction, put it plainly: "Natural capital represents a structural response to ecosystem degradation, helping institutional investors address financial risks that can no longer be overlooked." That sentence matters. Not a values statement. A risk statement. The partnership's founding ambition was to demonstrate the scalability of solutions that address the dual climate and biodiversity crises with integrity - and that can achieve both financial performance and positive outcomes for nature. Value Nature Fund I is that demonstration. At €300 million scale. The question for every institutional investor watching: if Triodos and Fondaction see unmatched opportunity in natural capital and can build the vehicle for it - why not you too?

A Practical Guide to 1.5 C Scenarios for Financial Users I'm incredibly proud of this comprehensive UN Environment Programme report and resource on climate scenarios! It was my final piece of work with United Nations Environment Programme Finance Initiative (UNEP FI) and one that was a major team effort and a multiyear process! We developed it to help financial users to understand the assumptions behind these critical scenarios and how they can be applied in financial decision-making from net-zero target-setting to risk management. It is full of analyses of different scenarios in comparison to each other, explorations of sector decarbonization pathways, and practical applications of scenario data and insights. It covers IPCC, NGFS, and International Energy Agency (IEA) scenarios and brings in data from a variety of sectors in order to show the changes needed to deliver a sustainable future. Have a look through it here: https://lnkd.in/d8G5eSae There really is something in here for everyone. We hope it becomes a valuable desk reference for you and your teams! #climate #netzero #decarbonization #climatescenarios #climatescience #IEA #NGFS #UN #IPCC #climatefinance #climaterisk

🔥 Climate risks are no longer abstract—they’re disrupting businesses, communities, and economies right now. The World Economic Forum’s 2024 report, "The Cost of Inaction: A CEO Guide to Navigating Climate Risk", delivers a sobering message: ignoring climate risks isn’t just irresponsible—it’s economically devastating. 🌡️ Key insights from the report: 💥 Climate-related disasters have caused $3.6 trillion in damages since 2000, exposing critical vulnerabilities in supply chains and infrastructure. 📉 Physical risks could put 5-25% of EBITDA at risk for some sectors by 2050 under a 3°C warming trajectory. 💸 Transition risks, like carbon pricing and changing regulations, could impact 50% of EBITDA in energy-intensive industries by 2030. 🌱 Every $1 invested in climate adaptation yields $2-$19 in avoided costs, while green markets are projected to grow from $5 trillion in 2024 to $14 trillion by 2030. 💡 My reflections: 🔄 Resilience isn’t enough anymore. Too often, we focus on simply "weathering the storm" of climate risk. But true leadership is about rebuilding something better—rethinking markets, redesigning business models, and creating solutions that lead entire industries forward. 🌍 Supply chain fragility is the Achilles’ heel of the global economy. A single extreme weather event can cascade across operations, grinding everything to a halt. Climate-resilient supply chains can’t just be about survival—they must be radically adaptive, decentralized, and built to thrive under disruption. 📊 Climate risk is fundamentally redefining the concept of value. Businesses stuck chasing quarterly earnings are missing the bigger picture. In a world of rising costs and irreversible climate impacts, long-term value will belong to those who embed sustainability, resilience, and equity into their strategies. The time for cautious, incremental steps has passed. How are we using this moment to transform the way we work, innovate, and lead? #ClimateAction #Sustainability #Resilience #Leadership #Innovation

ESG out, resilience in? 🌎 Interesting article published a couple of days ago in the Wall Street Journal on the evolving language of sustainability investing. The term "resilience" is emerging as the latest way to frame investments in climate adaptation and risk mitigation, replacing or complementing ESG. This shift reflects growing recognition that climate-related risks—extreme weather, supply chain disruptions, and infrastructure damage—are financial risks that businesses cannot ignore. As political and regulatory pressures mount, particularly in the U.S., many asset managers and companies are reframing their sustainability strategies. The focus is moving from broad ESG commitments to more specific, risk-based approaches that emphasize resilience and adaptation finance. This allows organizations to continue investing in climate solutions while avoiding the backlash that ESG has faced in some markets. Major players like Standard Chartered, BNP Paribas, and DP World are integrating resilience into their strategies, with investments in renewable energy, infrastructure upgrades, and supply chain adjustments. Their approach highlights how businesses are shifting from seeing sustainability as an optional add-on to treating it as a core component of long-term financial stability. The financial imperative is clear. Extreme weather events have already caused trillions in economic losses, and investors—particularly long-term institutional ones—are taking notice. Investments in climate adaptation and resilience aren’t just about managing risk; they’re about future-proofing businesses against an increasingly volatile operating environment. This shift in language and focus is an important signal for how sustainability strategies will continue to evolve. Framing climate action as resilience underscores its relevance to business continuity, risk management, and long-term competitiveness. Regardless of terminology, one thing is clear: the financial sector recognizes that ignoring climate risk is no longer an option. #sustainability #sustainable #business #esg #climatechange #resilience

The COP29 Azerbaijan and COP30 Brazil today unveiled the Baku to Belém Roadmap — a blueprint to mobilize at least US$1.3 trillion a year in climate finance for developing countries by 2035. Presidents Mukhtar Babayev and André Corrêa do Lago emphasize that this target is within reach — but will require significant effort from traditional sources as well as the development of new and innovative financial mechanisms. The Roadmap lays out five priority areas with a vision to 2035, each supported by focused action points: 1. Replenishing grants, concessional finance, and low-cost capital 2. Rebalancing fiscal space and debt sustainability 3. Rechanneling transformative private finance and affordable cost of capital 4. Revamping capacity and coordination for scaled climate portfolios 5. Reshaping systems and structures for equitable capital flows To kickstart implementation, the Presidencies propose practical early actions — improving data, driving reform debates, and strengthening transparency and collaboration. These steps will help build momentum, shape priorities, and demonstrate what is possible. The resources exist. The science is clear. The moral imperative is undeniable. What remains is the resolve — to make this the decade where ambition becomes action and humanity’s response finally meets the scale of its responsibility. Read the full report here: https://lnkd.in/dqA6CqND

India’s Green Financing Opportunity Could Shape a Century   India stands at a defining moment where a growing economic momentum meets an urgent climate imperative. The capital we choose to deploy today, and the priorities that guide this deployment, will influence not just our development trajectory but also the century that India shapes for the world.   At a global scale, the key outcomes from the recently concluded COP30 point towards the immediacy of climate action and the pivotal role of green financing. With strategic policymaking and the emergence of a climate-focused entrepreneurial ecosystem, India has a real opportunity to lead the global cleantech transition and achieve its commitment to reach net-zero by 2070.   Today, Green finance is powering innovation and scaling climate action while enabling entrepreneurship and opening avenues in infrastructure and job creation. At the heart of this transition is India’s rapidly expanding climate-tech or cleantech entrepreneurship ecosystem. Entrepreneurs are building impactful solutions across solar microgrids, battery storage, EV charging, carbon capture and sustainable packaging. According to a news report published by Inc42, Indian climate tech startups attracted over $2.2Bn in new funding over the last 18 months. Despite this momentum, early-stage climate ventures, especially in Tier 2/3 regions, often face barriers in accessing institutional capital. The government is addressing this through policy pivots that strengthen transparency and build confidence in the climate innovation ecosystem.   Subsequently, upper-layer NBFCs, lenders and development finance institutions are collaborating to bridge funding gaps. We are also seeing the rise of innovative financing structures, including blended finance models that combine concessional and commercial capital, thematic green funds to de-risk early-stage investments and ESG-aligned investment frameworks. These tools are helping channel capital to the most impactful and scalable climate innovations. As policy intent aligns with an expanding pool of capital, I truly believe India is well-positioned to become a global cleantech hub. This convergence of finance, innovation and sustainability promises to power India’s transition, strengthens local economies, create green jobs and ultimately shape the green trajectory of the next century not only for the Global South, but for the world.   Now is the time for policymakers, lenders, investors and corporations to take unified action. If India accelerates its green financing architecture with the same ambition as digital and infrastructure transformation, India could set a global benchmark for climate-led growth. The next century will be defined by those who fund the future and India is on the right track to lead the change.

Yesterday's investor call lasted 12 minutes. (they only asked these 5 questions) They scanned past the usual suspects: - Carbon neutral by 2050 - Science-based goals  - Pretty charts - 2030 targets And went straight to: 🚨 "Show us your water stress map." Your water availability analysis for key sourcing regions. Because that Spanish tomato supplier you depend on? They're facing allocation cuts next season. 🚨 "What's your stranded asset timeline?" That new plastic packaging line you're installing has a 15-year depreciation. Meanwhile, EPR fees are doubling annually. They want to know when it stops being an asset and becomes a liability. 🚨 "How are you pricing climate volatility?" Fixed-price contracts assume predictable harvests. After 3 of the 5 worst UK harvests happened since 2020, investors know those assumptions are dead. They're calculating whether your procurement strategy survives 40°C summers. 🚨 "Where's your transition revenue?" They've seen companies turn carbon credits from regenerative agriculture into new income streams. Early movers are already offsetting transition costs through carbon farming partnerships. If you're not exploring this, you're leaving money on the table. 🚨 "What happens when your biggest customer demands Scope 3 data?" Last month, a brand lost its biggest retail account. The buyer asked for Scope 3 emissions data. They had a year to respond. They still didn't have it. The climate conversation changed… From 2050 targets to 2026 risks. From "doing good" to operational resilience. From carbon metrics to water, volatility, and stranded assets. You CAN’T impress investors by ambition anymore. They're looking for evidence you understand what's coming. P.S. Have you turned ANY climate risks into revenue opportunities?

𝗧𝗵𝗲 𝗕𝗮𝗻𝗸 𝗼𝗳 𝗘𝗻𝗴𝗹𝗮𝗻𝗱 𝗵𝗮𝘀 𝗷𝘂𝘀𝘁 𝘂𝗽𝗽𝗲𝗱 𝘁𝗵𝗲 𝗮𝗻𝘁𝗲 𝗼𝗻 𝗶𝘁𝘀 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗲𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗯𝗮𝗻𝗸𝘀 𝗮𝗻𝗱 𝗶𝗻𝘀𝘂𝗿𝗲𝗿𝘀. 𝗧𝗵𝗶𝘀 𝗶𝘀 𝗮 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁 𝗮𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝗺𝗲𝗻𝘁 𝘁𝗵𝗮𝘁 𝗺𝗮𝘆 𝗵𝗮𝘃𝗲 𝗴𝗼𝗻𝗲 𝘂𝗻𝗻𝗼𝘁𝗶𝗰𝗲𝗱. Banks now own climate risk in the same way they own credit, liquidity and solvency. The BoE’s new Supervisory Statement SS4/25 replaces the 2019 climate guidance and significantly raises the bar for banks and insurers on three fronts: 1. Boards and executives are now explicitly accountable for climate risk, with expectations to embed it into strategy, risk appetite and decision-making. 
 2. Scenario analysis is no longer just a disclosure exercise; it must inform capital planning, stress testing and product design. 3. Data gaps are no longer an excuse; firms are expected to use conservative assumptions where data is weak, which effectively raises the cost of risky exposures. Under PS25/25, the PRA is clear that climate risk must sit inside core risk frameworks, including ICAAP for banks and ORSA for insurers. This moves climate out of the “sustainability” silo and into the core prudential machinery. Regulators are treating banks and insurers as a coupled system. Insurers are told to factor climate into long-term underwriting, mortality and health trends. Banks are told to understand how loss of insurance, valuation shocks and physical damage flow into credit risk and collateral values. This is a massive step forward. 𝗠𝘆 𝗧𝗮𝗸𝗲 If insurers retreat from high-risk areas, banks inherit that risk on their balance sheets. If firms cannot show they are appropriately capitalised for these dynamics, the direction of travel points towards higher capital expectations over time. In short, climate risk is now treated as a transmission mechanism across the financial system, not an isolated ESG topic. This is the end of the “learning phase” on climate risk in UK finance. The PRA has signalled that if you do not quantify climate properly, you will pay for it in capital, governance scrutiny or both. For leaders, the question is no longer whether climate risk is material. The question is whether your board, models and data are credible enough that you would bet your capital requirements on them. If the answer is no, then this is where the real work begins! Source: https://lnkd.in/eN7nKjhr #ClimateRisk #FinancialStability #Banking #Insurance #ClimateGovernance #PrudentialRegulation #Sustainability ___________ 𝘍𝘰𝘭𝘭𝘰𝘸 𝘮𝘦 𝘰𝘯 𝘓𝘪𝘯𝘬𝘦𝘥𝘐𝘯: Scott Kelly

Vietnam just cracked the code on climate finance in emerging markets. And almost nobody noticed. In 2024, a small water utility near Hanoi issued a $34M green bond that's now becoming the blueprint for climate infrastructure across the Global South. Not because it had a AAA guarantee. But because it solved how to make long-term, high-impact projects investable in local markets. Most emerging market utilities facing a water crisis would have done this: -Borrowed from MDBs at whatever rates they could get -Issued dollar-denominated debt and taken on currency risk -Applied for grant funding and waited years Or just delayed the project indefinitely. (Hello, Zambia! Hello, Jordan!) Vietnam built something different. Here's what Hoa Binh–Xuan Mai Clean Water actually did: - They structured a 20-year local currency bond: the longest-tenor project bond in Vietnam's history, designed specifically for insurance companies seeking stable, long-term assets. - They secured a credit guarantee from GuarantCo that jumped the bond's rating 11 notches to AAA, giving investors developed-market safety in an emerging-market project. The bond was oversubscribed by domestic insurers like Chubb Life, AIA, and Hanwha: proving the structure worked. - They blended it with floating-rate loans to optimize cost of capital while maintaining liquidity. - They worked with the Global Green Growth Institute and Luxembourg to build a Green Bond Framework aligned with ICMA standards, with external verification and grant-funded technical assistance baked in from day one. And they targeted one high-impact use case: a greenfield water plant delivering safe water to over 1 million people who never had reliable access before. No sovereign borrowing. No foreign currency exposure. No waiting for the perfect conditions. Just smart structuring, technical rigor, and capital design built around what investors actually need. This isn't a one-off experiment. - Tanzania launched the Tanga green water bond in 2024 using the same mechanics: local currency + blended guarantee + community impact. It's bringing clean water to 26,000+ new people. - Tokyo issued the world's first certified Climate Resilience Bond in 2025: JPY 50B (~$330M) for stormwater defenses and grid resilience, fully certified under the Climate Bonds Initiative's new taxonomy. Different markets. Same core principles: Structure around investor requirements Build impact into the financing DNA Align with global standards from the start Blend capital intelligently to unlock scale Everyone's waiting for COP30 to deliver the next climate finance breakthrough. But if you really want to unlock climate capital in emerging markets? Start where Vietnam started. Because the next wave of green finance won't come from Geneva or New York. Repost to help your network. Follow Yulia Titova for more water insights.

Alastair Marsh's recent thought-provoking piece in @Bloomberg highlights critical challenges with the current climate tech investing landscape Climate tech projects are capital-intensive with long timelines. Unlike software, much of climate tech requires massive upfront capital for R&D, pilot plants, and manufacturing before significant revenue. This demands longer development and deployment cycles (often 7+ years to scale) that exceed typical 5-7 year VC exit horizons. The classic VC model - built for rapid, asset-light scale-ups - often misaligns with the realities of many climate tech solutions, especially "hard tech." While there’s an abundance of early-stage VC capital for entrepreneurs, later-stage growth that bridges these projects from venture to infrastructure stage is basically absent—that’s called the missing middle. We need to adapt and supplement that approach by layering in other types of capital and bridge the "missing middle." A broader array of financing instruments is essential for climate tech to scale, including patient equity and growth capital, project finance, blended finance, and specialized debt models. Marsh’s piece lays out how family offices are uniquely positioned to be catalyzing players in this space. Their flexibility allows them to deploy capital across diverse segments, filling the gap and driving significant financial returns alongside impact. https://lnkd.in/gUf85Bwy