Arianna Griffa
Senior Policy Manager - Global
This year marks the tenth anniversary of the Paris Agreement, with a looming deadline for the next round of country Nationally Determined Contributions (NDCs) and a promised roadmap to address the climate finance gap. We explore how these milestones might offer opportunities for investors.
The dust has settled after a pivotal year of elections which saw many incumbents defeated at the ballot box. While this has signalled significant policy shifts away from climate objectives in some nations, the energy transition and decarbonisation of the economy are well underway.
In many cases, they are gathering pace.
Brazil will play a pivotal role as the host nation for COP30 and will face high expectations. Symbolically, the Rio Earth Summit in 1992 delivered several breakthrough moments, including the launch of the UN Conventions that today administer the climate and biodiversity conferences. Brazil is a core custodian of the Amazon rainforest and a fast-growing, high-emitting market with strong influence in the region.
Two recent, high-profile appointments signal strong leadership from the host nation. André Corrêa do Lago, a veteran diplomat and climate negotiator, has been appointed as COP30 President. Ana Toni, the Secretary for Climate Change, Energy and Environment at Brazil’s Ministry of Foreign Affairs, will support him as the COP30 CEO. IIGCC members may recognise Ana Toni, who delivered a speech at our AGM late last year.
Some things, however, remain unchanged. Private finance will continue to be at the heart of climate and nature conversations this year, widely recognised as a vital component in achieving the levels of capital required, with much progress still to be made. Investors considering climate and nature-related risks and opportunities in line with their individual strategies can use these moments to engage with policymakers and other key stakeholders.
With that in mind, here are three potential areas of policy engagement to consider this year.
From Baku to Belém
At COP29, world leaders agreed to a new collective quantified goal on climate finance which fell well short of the funding required by developing countries. As a compromise to resolve intense debate, the current and upcoming Presidencies committed to set out a roadmap to deliver USD 1.3 trillion by 2035, aiming to bridge the estimated USD 1 trillion funding gap.
This roadmap is to be presented at COP30 in Belém, but few details have emerged since. To succeed, the roadmap must set out a robust pathway that clearly defines the role of investors and private finance in general. Our open letter ahead of COP29 last year outlined our recommendations in more detail.
These recommendations will continue to guide our engagements with policymakers throughout 2025. We will reiterate that the roadmap should consider all sources of capital and all mechanisms to mobilise private finance to meet climate and nature targets.
This should include reforms that incentivise private investments in developing markets and remove barriers to entry, utilising derisking mechanisms to help unlock capital flows. Blended finance and the strategic use of Multilateral Development Bank capital are two such examples.
Climate nature cross-over
Last year’s Conference on Biological Diversity (CBD) failed to reach a resolution on financing mechanisms, with negotiations to continue in Rome on 27 and 28 February. These mechanisms are a key target for the Global Biodiversity Framework and must be resolved.
Despite stalled negotiations, CBD16 in Cali saw unprecedented interest from investors who increasingly consider nature-related risks and opportunities. This growing focus, alongside its convergence with climate change, looks set to continue. Deforestation sits firmly at the centre of this nexus, and in 2024 we announced our new role as the Secretariat of the Finance Sector Deforestation Action initiative to better support members in this space.
Brazil has pledged to focus on nature and forests in particular, aiming to end deforestation. Alongside this, it recently launched a Tropical Finance Facility which aims to mobilise USD 125 million to conserve tropical forests.
This aligns with the updated EU Regulation on Deforestation-free Products (EUDR), which comes into effect in December 2025. Early adoption in this space is an opportunity for Europe and European investors to lead in this space.
Investable NDCs
Last year saw the first updated NDC plans announced ahead of the February 2025 deadline, which most countries look set to miss. The UK Prime Minister shared its ambitions in Azerbaijan, unveiling plans to reduce 81% of its greenhouse gas emissions by 2035, relative to 1990 levels. This was followed by more detail on 30 January 2025, with the EU’s contribution expected soon.
Fresh from the 2024 UK and EU elections in 2024, these two global players have a renewed mandate and could show leadership on climate, including in mobilising European investment to support emerging markets and developing economies.
Making national climate commitments investable remains key. This must include providing the policy and regulatory certainty that businesses and investors need to take action and address current barriers to action.
Our investable NDCs report highlighted the importance of sector-specific plans to clarify decarbonisation pathways. A new IIGCC resource, coming soon, will offer the investor view on how these roadmaps can be developed and what would be most useful, leveraging expertise from our membership.
Overall, it’s set to be another fast-paced year of policy developments as momentum on decarbonisation continues to build. Investors are more aware than most of the shifts taking place behind the headlines, and these milestones ahead offer platforms to monitor progress and engage constructively. Their support will be vital to support the delivery of country climate commitments and to unlock the opportunities they present.
As a future-facing, European organisation, we intend to help investors on that journey.
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