Capital markets, the financial policies that shape them, and the public investments that lead them, drive the pace of the low-carbon transition.
The rapid decarbonization necessary to limit global mean temperature rise to well below 2° C requires systemic changes within our financial and economic systems. The cost of capital and understanding of the risks associated with high-carbon investments must increase, while capital costs and perceived risks of decarbonization decrease. To win on climate, financial markets and public investments must align with — and serve — international climate goals.
Our Finance Program
The ClimateWorks Finance program aims to catalyze financial and market changes that accelerate climate action. It works in partnership with the philanthropic community to pursue multi-grant transnational strategies that target specific outcomes in the capital markets and for public finance. The Finance program pursues these strategies through its own grantmaking and by convening and advising funders to foster collaboration and alignment. The program also incubates and supports nascent opportunities where finance is the lever of change.
Capital markets inadequately account for the long-term physical, legal, and transition risks caused by climate change and the political response to it. Our Capital Markets initiative works with both market actors and their regulators to translate increasing awareness of climate risk into the large-scale capital reallocation necessary to decarbonize the real economy.
As part of our work on financial oversight, we host INSPIRE, an independent platform that commissions research on greening the financial system in partnership with a global network of central banks and financial supervisors. Click here to learn more.
Public investment is essential to the low-carbon transition. The Public Finance initiative aims to support a more entrepreneurial approach to public investment, especially through the establishment of climate-focused public financial institutions, and the repurposing of existing development finance institutions, to better equip governments to catalyze the commercialization and deployment of low-carbon innovation.
Our Public Finance initiative includes a sub-strategy on China’s Belt and Road Initiative (BRI) that works to help BRI investment meet its potential to catalyze low-carbon development in emerging centers of economic growth.
The ClimateWorks Finance program developed a new platform that enables philanthropy to support the agenda of the Network for Greening the Financial System (NGFS). The result is INSPIRE: an independent research network purpose-built to commission scholarship and insights from best-in-class scholars and analysts in all parts of the world on key research questions linked to the NGFS work program. Learn more.