Omar Shaikh (GEFI) moderated an expert panel examining the complexities of mobilising climate finance for emerging markets. Building on earlier insights, the discussion focused on bridging capacity gaps, addressing project development challenges, and overcoming market constraints.
Islamic Development Bank (IsDB) – Mohsin Sharif
Mohsin outlined the IDB’s “Promising Strategy for Sustainable Future,” which evolved from its COVID-19 response. With a goal of directing 35% of annual approvals towards clean and climate finance by 2025—a target met two years early—the IDB highlights the importance of harmonised definitions and taxonomies to clarify financing priorities. Establishing dashboards and guidelines further supports banks in improving their sustainability practices.
HSBC – Sabrin Rahman
Sabrin emphasised HSBC’s focus on catalysing new economies, decarbonising, and leveraging global trade. Partnering with think-tanks, development banks, and policymakers helps translate policy into practical solutions. Harmonising regional taxonomies and engaging early with policymakers to integrate climate considerations into trade agreements are key. HSBC’s experiments with outcome-based bonds and blended finance initiatives, including nature-based solution funds, showcase innovative approaches.
Franklin Templeton – Mohieddine (Dino) Kronfol
Dino presented a reality check. While acknowledging vast financing needs, he highlighted significant barriers—limited creditworthiness, potential crowding out of private investment, and a scarcity of mature projects. Strengthening fundamentals such as sustainable public finances and reliable capital access is essential before expecting trillions in climate finance. Public-private partnerships, blended finance, and de-risking strategies can help attract the necessary capital.
Common Threads
All panellists agreed on the need for unified taxonomies, clearer regulations, and stronger capacity building across the ecosystem. Faith-based finance, impact-driven strategies, and balancing fiduciary duties with environmental goals also emerged as important themes.
Key Takeaways
- Harmonised Definitions: Aligning taxonomies is crucial for clarity in sustainable finance.
- Policy and Practice: Early engagement and better-aligned trade agreements bridge the ambition-to-action gap.
- Strengthened Foundations: Robust public finances and improved project pipelines are prerequisites for large-scale climate funding.
- Innovative Tools: Outcome-based bonds, blended finance, and public-private partnerships are promising mechanisms.
- Capacity Building: Strengthening skills, frameworks, and understanding is vital to mobilise climate finance effectively.
The panel underscored that while the challenges are significant, strategic collaboration, innovation, and capacity enhancement can pave the way for scaling climate finance in emerging markets.