Ahead of COP30, members of the Transformational Finance for Climate Group* have released a new position paper, “Transformational Finance for Climate: Unlocking Systemic Effects”, to support the publication of the Baku to Belém Roadmap and inform other multilateral processes focused on Paris-aligned finance, such as the Sharm el-Sheikh Dialogue. The paper outlines how public and private actors—from development banks and climate funds to institutional investors and commercial banks—can work together to reorient and mobilize financial flows for transformational impact, scaling high-quality, just, inclusive, and long-term finance using a systems-level approach.


While global climate finance flows reached USD 1.9 trillion in 2023, the vast majority was concentrated in advanced economies. In contrast, developing countries, where needs are most acute, received just USD 196 billion. Of this, only USD 46 billion was allocated to adaptation—far below estimated requirements.1 To meet the goals of the Paris Agreement and the political ambition of mobilizing USD 1.3 trillion annually by 2035 under the Baku to Belém Roadmap, finance must support systemic approaches that reshape markets, policies, and institutions.




Adopting a systemic approach with transformational impacts


Transformational finance goes beyond isolated projects. It is long-term, strategic, and aligned with national priorities and the Paris Agreement. By adopting transformational finance principles, the public and private sectors can address structural barriers and activate key levers of change to help shift entire systems and deliver lasting, economy-wide transformations for both decarbonization and resilience.


To achieve this scale, governments must send clear signals to markets. Coherent policies, sustainable-finance taxonomies, disclosure standards, incentives that create investor confidence and a level playing field are essential building blocks for attracting capital, achieving transformational finance and corresponding climate mitigation and resilience outcomes.


Strong frameworks must be complemented by collective action across the financial system. Governments—particularly ministries of finance—set fiscal and regulatory direction, while public development banks (PDBs) act as agents of systemic change, bridging domestic needs with global priorities, taking early risks, and crowding in private capital. Alongside vertical climate and environment funds, they channel concessional finance, de-risk investment, and strengthen institutional capacity. At the same time, private investors mobilize capital at scale, seeking long-term value. Importantly, the public and private sectors’ concerted efforts to adopt transformational finance principles can make adaptation and resilience projects more bankable and investable—turning necessity into opportunity and helping to ensure that climate adaptation and mitigation progress together. Through joint approaches, these actors can align national priorities with global goals and translate climate ambition into investable, systemic transformation.




Driving coherence and scale through multilateral action


To embed transformational principles across the global finance architecture, the Group calls for three key actions:


    

  • Launch a global dialogue under COP or NCQG processes to consolidate and promote guiding principles for Transformational Finance for Climate.
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  • Adopt shared definitions and frameworks across international fora such as the NCQG, Standing Committee on Finance (SCF), Global Stocktake, and COP30/31.
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  • Integrate transformational principles into financial institutions’ strategies, reporting, and operations—particularly within PDBs and multilateral funds.
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Together, these steps aim to strengthen coherence, transparency, and accountability of climate finance globally. This, in turn, can help direct concessional and public finance towards country-led, system-level interventions and catalyze investments with durable, economy-wide impact.


To translate this vision into practice, the Group highlights several next steps for coordinated action across the financial system:


    

  • Operationalize the actions listed above through joint approaches linking public (including concessional) and private finance across countries and sectors, building on work by leading think tanks such as World Resources Institute (WRI), Institute for Climate Economics (I4CE), Climate Policy Initiative (CPI) and others.
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  • Support country-led identification of systemic and transformational investment priorities.
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  • Ensure transparency through accessible data on risk–return profiles.
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  • Foster coordinated public–private collaboration, for example through country platforms
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Supporting multilateral processes for COP30 and beyond


In addition to being part of the Baku to Belém Roadmap, the paper is intended to support ongoing multilateral processes such as the Sharm el-Sheikh Dialogue on Article 2.1(c). The Group will also continue supporting the NCQG and SCF, fostering collaboration to shape the next generation of the global finance-for-climate architecture with this paper and other efforts.


The paper will help lay the groundwork for a high-level discussion at the UNEP FI-led UNFCCC side event, “Unlocking Finance for Climate through Systems Transformation”, organized in partnership with the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) and the International Organization for Standardization, to be held on 17 November in Belém.


 


*About the Transformational Finance Group


The Transformational Finance for Climate Group (Group)—deriving from the Making Finance Work for Climate Initiative launched at COP29—brings together thousands of leading public and private financial actors from developed and developing countries, representing more than 40% of global financial assets. Members include the International Development Finance Club (IDFC), the Finance in Common system (FiCS), UNEP Finance Initiative (UNEP FI), the Principles for Responsible Investment (PRI), and the Mainstreaming Climate in Financial Institutions Initiative.


The Group also works closely with key partners such as the Green Climate Fund (GCF), as well as the Network for Greening the Financial System (NGFS), NZAOA, and the Net-Zero Export Credit Agencies Alliance (NZECA), making it a unique platform for coordinated action and consolidated input into global finance processes.


The Group actively contributes to different COP and multilateral processes such as the NCQG and the Baku-to-Belém Roadmap, and the Sharm el-Sheikh Dialogue, through policy engagement, joint publications, and participation in corresponding events. Its earlier COP29 NCQG and Sharm el-Sheikh dialogue Joint Statement and ongoing work ahead of COP30 has helped align key actors and initiatives behind a common vision for transformational finance for climate.


 


1 Climate Policy Institute (2025) Global Landscape of Climate Finance 2025