Sustainable Finance for Energy Transition

As #NYCW approaches, it's vital to put the #spotlight on practical and scalable #solutions for #financing the #clean #energy #transition, particularly in #emerging #markets. Our latest report at the Columbia Center on Sustainable Investment, Financing Pathways for the Energy Transition: A Regional Approach, explores seven key #strategies to #unlock #capital and #accelerate clean energy adoption across #regions. From addressing the debt conundrum to leveraging innovative financing mechanisms and expediting private investment, this framework provides actionable insights for policymakers, financial institutions, and investors alike. 📌 Develop a Robust #Regional Clean Energy Strategy 📌 Advance #Structural and Regulatory #Reforms 📌 Address the #Debt #Conundrum 📌 Strengthen #Innovative Financing Mechanisms 📌 Rethink Public Financing and #MDBs 📌 Catalyze #Private #Investment 📌 Accelerate #Technology Advancements These pathways represent a comprehensive approach to overcoming the barriers of high financing costs, regulatory challenges, and the need for debt relief, all tailored to regional realities. As we gather for #NYClimateWeek, it's clear that collaborative, cross-sector efforts are essential to drive the energy transition forward globally. 🌍⚡ For those keen to dive deeper into the intricacies of these strategies and how they can be applied across Africa, APAC, LAC, and Europe, I invite you to explore our report. ➡ https://lnkd.in/diWG4XWu Jeffrey Sachs Lisa Sachs Elena Crete Lucas Didrik Haugeberg Daniel Bernstein Perrine Toledano Andrew Howell Leslie Labruto Jake Hiller #EnergyTransition #SustainableFinance #EmergingMarkets #ClimateAction #FinancingTheFuture #NYClimateWeek

SBTi lanches a net-zero standard for financial institutions The Science Based Targets initiative (SBTi) has officially launched its Financial Institutions Net-Zero Standard Version 1.0 in July 2025 after extensive pilot testing with 33 institutions and two public consultations. This 81-page comprehensive framework is a critical moment for sustainable finance. Over 165 financial institutions already use SBTi's existing criteria. The 81-page standard provides detailed criteria across 5 key areas: net-zero commitments, base-year assessments, policies & target setting, progress tracking, and SBTi claims. It includes specific metrics, sector specifications, and implementation guidance. Who does the standard apply to • Banks • Asset managers • Insurers • Private equity firms generating 5%+ revenue from financial activities What does the standard cover? • Lending • Investing • Insurance underwriting • Capital markets globally What are the key requirements? "Engagement first" approach prioritising client transition over divestment Immediate cessation of new coal financing globally Oil & gas project finance phase-out by 2030 latest 95% climate-aligned portfolio by 2050 Annual progress reporting with full transparency by 2030 What are the critical dates? NOW: Institutions can submit targets for validation • Dec 2026: Transition period ends • 2030: Deforestation exposure assessment required, oil & gas general-purpose finance phase-out • 2050: Net-zero target achievement Why decarbonisation is critical for asset protection? Climate risks pose unprecedented threats to financial assets. Recent data shows natural disasters caused $320bn in global losses in 2024 alone, with weather catastrophes responsible for 93% of overall losses. The ECB finds that 40% of eurozone bank loan portfolios are exposed to energy-intensive sectors vulnerable to transition risks. Studies estimate $1.4 trillion in oil and gas assets globally are at risk of becoming stranded. The projected economic losses from failing to achieve 1.5°C warming are 5x greater than the climate finance needed by 2050 to prevent them. #sustainablefinance #netzero #climateaction #esg #sbti #banking #insurance #assetmanagement

Sustainable Finance Imperative in the GCC In a world where environmental and social accountability is paramount, sustainable finance has transitioned from a niche consideration to a mainstream imperative. In collaboration between KPMG Lower Gulf and First Abu Dhabi Bank (FAB) we have today published the report “The Sustainable Finance Imperative” that highlights the significant strides being made in the GCC region, particularly the UAE, in mobilizing capital toward sustainable projects. Key highlights from the report: 1️⃣ Ambitious Goals The UAE Banks Federation aims to mobilize over AED 1 trillion ($270 billion) in sustainable finance by 2030, aligning with international frameworks like the UN Sustainable Development Goals and the Paris Agreement. 2️⃣ Core Themes The report identifies three primary themes driving sustainable finance in the region: 🟢Renewable energy projects 🟢Energy-efficient infrastructure 🟢Sustainable water management 3️⃣ Emerging Opportunities The report highlights potential in sectors like the circular economy, sustainable agriculture, tourism, and SME financing, crucial for economic diversification. 4️⃣ Systemic Challenges Despite the progress, challenges remain, including regulatory harmonization, capacity building, and data accessibility. The need for standardized definitions and metrics for impact measurement is crucial to fostering trust and credibility in sustainable investments. 5️⃣ Economic Impact Sustainable finance is not only vital for addressing climate change but also presents a significant opportunity for GDP growth and job creation. For instance, over 1 million jobs are projected to be created in the GCC due to green investments by 2030. 6️⃣ Forward-Looking Recommendations The report emphasizes the importance of establishing clear taxonomies for impact measurement, implementing policy incentives, enhancing data collection infrastructure, and building ESG capabilities across stakeholders to drive sustainable finance practices. Abbas Basrai Fadi Al-Shihabi فادي الشهابي Lotfi El Jai Ayasha AlGhas Maysam Rawashdeh Sarah Pirzada Usmani Gerard Vinals Foguet, CFA Jaime Hermosilla Rafecas #SustainableFinance #GCC #ESG #KPMG #FAB #ClimateAction #RenewableEnergy #EconomicDiversification #Sustainability #ImpactInvesting ##sustainability #climatechange #esg #togetherforgreen #togetherforclimate #togetherforaction #fromvisiontoimpact

🎯 Another timely and detailed piece of research by ShareAction on #banks and their #netzero targets: https://lnkd.in/eKcVWSmt sheds light on the gap between decarbonisation and sustainable finance targets. But underlying the different targets (relating to financing outcomes)  there’s very likely to be bigger strategic gaps. Ultimately, unless things are done differently, why should anyone expect different results? So here’s a few specific net zero finance strategy points to consider: ✅ STEPPING UP: if sustainable finance targets are solely predicated on allocating to easy, ‘oven-ready’ mature win-win sectors, then we might see rampant competition, but insufficient aggregate progress. The real gap is how to catalyse emerging sustainability solutions to make them more financeable – e.g. crowding in complementary capital and #innovation. See some catalytic ideas here: https://lnkd.in/e9Qw_8wR . That could expand the green market and become a game-changer for transition. ✅ STEPPING IN: if #transitionfinance is no more than a label for funding companies moving in the right direction, then the concept could rapidly disappoint and fizzle. How can banks integrate financing with complementary services (in advice, connections, insights, incentives etc) that could really propel the transition of their clients? ✅ STEPPING OUT: If all banks conclude that stepping away from unsustainable business makes no difference because it gets taken over by someone else, then nobody would ever make a change. Banks stepping out of projects actually do make a major difference to corporates in their cost of capital and level of risk. The sooner some step out,  the sooner others will too, pushing corporates to address their transition strategies. ✅ SPEAKING OUT: if primary policy is a barrier, then what's the advocacy strategy? Where are the banks (including those putting the brakes on fossil fuel expansion) advocating to prevent unnecessary licensing/commissioning new fossil fuel projects? Or defining/calling for financial regulation making it easier to shift finance towards a rapid and just transition to a net zero economy? Please do comment if you see how these gaps (and others) are showing up in practice. And anyone interested in the leadership questions of how to do things differently in practice should consider the Climate Safe Lending Network Fellowship – a global programme for professionals in any role within a bank or lending institution, enrolling now. Learn more at https://lnkd.in/e_qFbFuT, join our free experience session on Thursday 14 November 2024 15.00 GMT or contact fellowship@climatesafelending.org for more information.

As we move into 2026, #sustainablefinance is entering a pivotal phase, where transition finance moves from concept to practice and creates fresh opportunities for issuers and investors alike. Key developments set to shape the year: (1) New guidance and guardrails for transition-labelled bonds and loans including the ICMA Climate Transition Bond Guidelines and Transition Loan Principles are adding credibility to the market and helping unlock capital for decarbonisation projects, especially in high-emitting sectors. (2) The EU’s proposed #SFDR update introducing a ‘transition’ product category could further accelerate investor demand for instruments that fund credible transition pathways. (3) Entity-level transition plans are emerging as a cornerstone of credibility, requiring firms to demonstrate how financed projects align with recognised #decarbonisation pathways and avoid carbon lock-in. (4) Asia Pacific stands out as a region poised to capitalise on transition finance momentum, supported by expanding local taxonomies and a strong presence in hard-to-abate sectors. (5) Beyond decarbonisation, #adaptation finance is gaining traction as investors increasingly factor physical #climaterisks into decision making reinforcing the need for capital flows that both mitigate and adapt. Despite a soft year for labelled issuance in 2025, the broader trend is clear: transition and adaptation finance are becoming new growth engines in sustainable markets. The takeaway: 2026 will be the year finance refines its playbook strengthening credibility, broadening participation, and unlocking capital for the long journey to net zero!! #SustainableFinance #TransitionFinance #ClimateInvesting #Decarbonisation #GreenBonds #ESG #NetZero #ClimateRisk #AdaptationFinance #CapitalMarkets #SustainableInvestment https://lnkd.in/dkF_aKNe

🌏 Catalyzing a Greener Future: Financial Market Innovation as a Cornerstone for ASEAN's Sustainable Ambitions 🌏 The journey toward a sustainable global future hinges on the crucial role of finance in channeling capital toward environmentally and socially responsible initiatives. In the dynamic and rapidly developing region of Southeast Asia (ASEAN), financial market innovation is an imperative for accelerating regional sustainable ambitions. With its diverse economies and significant vulnerability to climate change, ASEAN must leverage innovative financial instruments to bridge the substantial funding gap for green infrastructure and transition projects. The Role of Financial Innovation Financial innovation in ASEAN is transforming the landscape of sustainable development. Traditional reliance on bank financing is giving way to a more diversified approach, with market-based instruments like green bonds, sustainability-linked loans, and green sukuks gaining prominence. ✅ Green and Sustainability Bonds: Countries like Thailand and Singapore have emerged as leaders in the region's sustainable bond market. Thailand's issuance of sovereign sustainability bonds has successfully funded large-scale infrastructure projects, such as electric mass transit lines. Meanwhile, Singapore's ambition to become a green finance hub has driven exponential growth in green debt, particularly for green building projects. ✅ Sustainability-Linked Loans: These loans, which tie interest rates to a company's performance on ESG metrics, incentivize corporate sustainability transitions. This provides a flexible financing solution that directly rewards progress toward environmental and social goals. ✅ Regional Collaboration: The development of a common language through the ASEAN Taxonomy for Sustainable Finance is a pivotal step. This initiative provides clarity and confidence for investors by defining what constitutes a sustainable activity. By creating a unified framework, ASEAN can attract more international and regional investment, ensuring that capital is directed effectively toward the most impactful projects. Accelerating Regional Ambitions The true power of financial innovation lies in its ability to accelerate regional ambitions. By mobilizing both private and public capital, these markets can fund the transition away from fossil fuels, support the development of renewable energy, and build more resilient and sustainable urban centers. The integration of technology, such as Green FinTech, further enhances this process by improving data transparency, risk management, and the overall efficiency of sustainable investments. ASEAN can not only mitigate environmental risks but also create a new, greener pathway for economic growth and prosperity. #SustainableFinance #ASEAN #GreenFinance #FinancialInnovation #ESG #ClimateAction https://lnkd.in/gYqfbHwJ

Net Zero Guide for Finance Teams 🌎 Great guide from A4S on the role of finance in driving the transition to net zero. It begins with a clear message: failure to act on climate change is a risk to both business and the global economy. The guide explains what net zero means for organizations, linking corporate targets to science based pathways that reduce emissions across all scopes with credible interim milestones. Stakeholders expect decisive action. Governments, investors, customers and employees all demand credible strategies. Finance teams are in a position to respond by integrating climate into everyday decisions. Leadership from finance is essential. Identifying risks and opportunities, building a culture that supports sustainability, and engaging the board with strong business cases are all highlighted. It also shows how to incentivize action across value chains, with special focus on scope 3 emissions which are the largest source for many organizations. Finance must ensure net zero is embedded into planning, budgeting and investment processes. Pathways should be practical, costed, and aligned with long term strategy. Accurate measurement is critical. Progress needs to be tracked with high quality data across environmental, social and human factors to ensure consistent reporting. Business valuations should reflect climate risk and opportunity. Finance can help bring transparency and credibility to long term value assessments. Another priority is raising and allocating finance for transition. Green loans, bonds and sustainability linked instruments can provide capital for investment in change. Clear reporting builds trust. Alignment between financial statements and sustainability disclosures ensures that information is reliable for stakeholders. The guide makes one thing clear: finance is not a passive function in the journey to net zero. It is a central driver of transformation and has the tools to make it happen. #sustainability #business #sustainable #esg

Addressing climate change 🌍 and its impacts remains an urgent global concern 🚨 and demands a transformative approach from the financial sector 💼.   Transition finance has emerged as a pivotal tool 🔧in this pursuit, bridging the gap between traditional green finance 🌱and the imperative to decarbonize high-emitting industries. It directs investments 💰 to decarbonize high-emitting and hard-to-abate industries such as steel 🏗️, aviation ✈️ and shipping 🚢, crucial for achieving net-zero emissions in alignment with the Paris Agreement's goals to keep global warming in check 🌡️.   Transition finance tackles the challenge of inadequate private sector financing for decarbonization activities, overcoming barriers like stranded assets and investor reluctance 🚫💸. To unleash its potential, a robust framework is essential. This entails credible identification of transition activities, stringent reporting practices to prevent greenwashing 📊 and the development of a versatile financial toolbox encompassing debt and equity instruments 🛠️.   Moreover, fiscal incentives and central bank financing facilities play a crucial role in enhancing the bankability of transition projects 💵. Attention to socio-economic impacts, including unemployment and energy shortages, ensures an out-and-out transition with measures like employee reskilling programs 🛤️.   Significant strides have already been made in this domain. For instance, a major UK bank is actively incorporating transition finance into its strategic roadmap, evident in a US$200 million sustainability-linked trade finance facility for a agribusiness conglomerate 🌾. Similarly, a prominent Asian bank launched its Transition Finance Framework at the United Nations' COP28 conference last year 🌏.   However, broader action is imperative. Regulators must provide clarity on eligibility criteria for transition activities, while demonstration projects showcasing the feasibility and benefits of transition finance are essential 🏦📈. Additionally, the establishment of transition funds at both national and international levels can reduce funding costs and risks, attracting private sector investment to accelerate the transition to a sustainable future that creates #longtermvalue for all stakeholders 💚.   #ClimateChange #Decarbonization #SustainableFinance #ESG #RenewableEnergy #NetZero #Greenwashing   https://lnkd.in/gCJVC6eq

🌎 Climate risk isn’t a future scenario — it’s already a financial reality reshaping the built environment. Hamoda Youssef and I recorded this during Greenbuild because we’re seeing the same pattern across portfolios everywhere: climate risks are accelerating faster than owners are able to implement mitigation and adaptation strategies. We fully acknowledge the challenges owners are facing today: 📉 a capital-constrained market, 📊 competing priorities across portfolios, 🏗️ limited bandwidth for project delivery, and 💵 rising costs of debt, insurance, and operations. But the message throughout the Sustainable Finance and Investing Forum was clear: • Insurance markets are repricing risk — premiums are spiking, coverage is shrinking, and many assets are becoming uninsurable. • Transition risk is now a balance-sheet issue — carbon-intensive and inefficient buildings face escalating fines, energy volatility, and valuation pressure. • Delay is the highest-cost strategy — stranded assets, climate-driven capex shocks, and preventable downtime are already eroding returns. • Capital is available for the right projects — from resilience-linked loans and C-PACE to incentives, structured finance, and the new generation of performance-based funding models. And most importantly: 💡 Owners do not need to solve everything at once. Practical steps — from operational optimization and climate risk screening to electrification planning, BPS compliance prep, and resilience upgrades — can be staged, sequenced, and financed over time. 💸 Every $1 invested in adaptation saves up to $10 in avoided losses. The ROI is real, measurable, and happening now. Even in a tight market, inaction is simply too risky — financially, operationally, and competitively. Resilience is no longer optional. It’s risk management. It’s fiduciary duty. And it’s the smart business move. Greenbuild showed that the momentum, tools, and capital are here. Now the industry needs leaders ready to move from intention to implementation. Resiliency now.

A reflection on the evolving theme of "transition finance" from #GreenBiz25: Despite the net zero alliance exodus by major American banks, there's strong institutional commitment (72 of top 100 global FIs have #netzero targets). But the real work is in creating workable financing structures for complex decarbonization projects. The future of #transitionfinance isn't about creating a new asset class, but about adapting existing financial tools to support decarbonization and shifting from debates about definitions to practical implementation, particularly in hard-to-abate sectors where green finance doesn't fit (CDP: 100 companies are responsible for 71% of global GHG emissions in my lifetime). As J.P. Morgan's head of sustainability policy Linda French has made clear, "finance will only move when there’s an economically viable business case ... taxonomies and disclosure frameworks on their own do nothing to finance flows, and even risk becoming a distraction.” You could say finance is about moving money to make more money, but it can also be about supporting existing clients, using the money they're already getting to accelerate their own transition plans and actions. The key element is that transparency and accountability will allow us, as Dr. Elizabeth Harnett shared at GreenBiz 25, to "assess whether transition finance is really happening and what the activity is having on the world. We don't want to get 10 years down the line and realize that transition finance made absolutely no difference." Thanks to Jeffrey Schub for sharing real-world examples from Wells Fargo, and for Tobi Petrocelli, PhD, Ethan Gilbert, LEED AP and Carletta Ooton for bringing transition finance conversations to life. Jeffrey Schub's transition finance take for Trellis Group: https://shorturl.at/CbdUY Center for Climate-Aligned Finance's transition finance resource hub: https://shorturl.at/qqr9b