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Making NDCs investable - the investor perspective

Making NDCs investable - the investor perspective

As countries start developing their new Nationally Determined Contributions (NDCs) due in early 2025, private finance has a critical role to play to support the implementation of ambitious climate goals.

NDCs can be a useful tool for investors to assess countries’ long-term climate ambition; however, in their current form, NDCs vary significantly in quality and detail across countries, and often lack sufficient information on policy implementation to effectively guide investment decision-making. Beyond assessing long term decarbonisation targets, investors are looking to identify
the country’s technological and sectoral opportunities and learn about the policy landscape to better understand the forward-looking implications for meeting their stated targets.

In their updated NDCs, countries have the chance to develop more comprehensive and credible documents that attract further long term private investment, by helping investors to better understand the policy landscape, assess investment risks and opportunities, and facilitate engagement to support implementation.

We have worked closely with investor members of the NDC thematic working group to identify key recommendations for countries preparing their updated NDCs.

Investor views on how to develop ‘investable’ NDCs

  1. Provide more granular detail on the sectoral pathways and underlying
    macroeconomic context in a country.
  2. Quantify investment needs and prepare financing strategies alongside NDCs, to help investors identify long term investment opportunities.
  3. Set out supporting policy and regulatory frameworks to achieve NDC targets, to help give investors confidence that a decarbonisation plan is credible.
  4. Strengthen governance and the stakeholder engagement process around NDC development and implementation, to ensure a regular and open dialogue with key stakeholders involved.
  5. Enhance global harmonisation and consistency across NDCs to facilitate the collection and analysis of consistent information for investment decision-making.