Unveiling the efforts of the NZAOA in facilitating the release of $1.3 trillion in financing geared towards addressing climate concerns
The Net-Zero Asset Owner Alliance (NZAOA), led by Erich Cripton, has unveiled an investor-focused roadmap aiming to mobilize USD 1.3 trillion in climate finance by 2035. This ambitious plan provides an opportunity for strategic collaboration between the UNFCCC Secretariat and the presidencies of COP29 and COP30.
The NZAOA's commitment encompasses six priorities that, if aligned with the climate finance frameworks and advocacy of COP, could significantly enhance the scale, credibility, and impact of mobilized funds crucial for achieving global climate goals.
- Policy clarity is essential to reduce investor uncertainty and risk. By advocating for clear, consistent, and science-based policies, governments can unlock private capital.
- Transparency and standardization in climate-related disclosures improve comparability and trust. Collaborative initiatives between NZAOA members and global disclosure bodies can co-develop globally accepted climate risk and impact metrics.
- Innovative blended finance structures de-risk private capital participation in emerging and frontier markets. Coordinating with NZAOA to launch or scale such mechanisms can accelerate investments in critical sectors.
- Scaling catalytic capital and technical assistance is necessary to crowd in institutional investors. Building on initiatives like the NZAOA’s deforestation guidelines and the Agriculture Transition fund can boost investment in nature and land use finance.
- Robust monitoring, reporting, and verification (MRV) systems ensure accountability in financed projects. By reinforcing frameworks and commitments, COP presidencies can enhance the transparency and credibility of climate finance.
- Cross-sector and multilateral collaboration unifies efforts across public and private actors. Leveraging the UNFCCC Secretariat’s convening power to facilitate knowledge sharing and best practice dissemination can further the NZAOA's mission.
The UNFCCC Secretariat can catalyze the transition from aspirational pledges to concrete, scalable financial flows driven by private sector leadership through the NZAOA’s $1.3 trillion goal by 2035. By anchoring the COP29 and COP30 presidencies’ climate finance efforts around these priorities, the UNFCCC Secretariat can foster a close partnership focused on policy clarity, blended finance innovation, transparency and MRV, targeted sector investments, MDB engagement, and convening power.
This collaboration is vital for achieving the NZAOA's goal of mobilizing USD 1.3 trillion in annual climate finance by 2035. To make this a reality, extensive partnerships, improved frameworks, and a robust commitment from both public and private actors are required. Policymakers should revise regulatory frameworks to encourage long-term capital deployment in emerging markets by institutional investors like pension funds, banks, and insurance companies.
The NZAOA is committed to achieving net-zero greenhouse gas (GHG) emissions across investment portfolios by 2050. Access to catalytic capital and streamlining application and reporting processes are essential to accelerate its deployment. Promoting the standardization of blended finance vehicles and risk-sharing instruments can reduce complexity and lower costs.
The Baku to Belem Roadmap, a comprehensive and achievable pathway for mobilizing private capital at scale, provides a framework for this collaboration. The NZAOA has played a role in the stakeholder consultation process and reaffirmed its readiness to act as a collaborative partner in the Baku to Belem process and COP30 discussions.
MDBs must expand partnerships with private stakeholders and redirect operational frameworks to pursue co-investment opportunities. The goal is to increase the ratio of private capital mobilized by Multilateral Development Banks (MDBs) to 5:1 by 2035. Better reporting mechanisms and transparency from MDBs and private stakeholders are necessary to lower perceived risks in emerging market projects.
Existing private sector insights, such as the Call to Action for Policy Makers on Private Capital Mobilization, Blended Finance best practices, and recommendations from the B20 Taskforce on Finance and Infrastructure, should be integrated into the Baku to Belem Roadmap process. By working together, the UNFCCC Secretariat, COP presidencies, NZAOA, and MDBs can create a more sustainable and resilient future for all.
- The NZAOA's roadmap, with its aim to mobilize USD 1.3 trillion in climate finance by 2035, aligns with the science-based policies and regulatory frameworks that governments should implement to reduce investor risk and ultimately unlock private capital.
- To facilitate the scaling of climate finance, particularly in critical sectors, the UNFCCC Secretariat, NZAOA, and Multilateral Development Banks (MDBs) can collaborate to develop innovative blended finance structures, thereby de-risking private capital participation in emerging and frontier markets.
- In order to ensure that mobilized funds are invested effectively in addressing climate-change challenges, environmental-science and climate-related disclosures must be transparent, standardized, and based on trust. Collaborative initiatives between various stakeholders can co-develop globally accepted climate risk and impact metrics.
