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Sustainable finance

Supporting climate compatible policies and investment decision making in order to avoid stranded assets and catalyse finance to bring about sustainable, rapid, and far-reaching transitions towards deep decarbonisation.

Climate compatible finance


Driving deep decarbonisation with climate resilient infrastructure in line with the Paris Agreement will require massive investment in climate solutions. Current investments flows are however not consistent with either global climate or sustainable development objectives. Debates around sustainable finance today will play a key role in shifting financial flows that will have important implications for emissions patterns and progress  for decades to come. Urgent action is needed to foster enabling environments for Paris aligned investments, phase-out investments in high emissions activities and thereby avoiding further stranded assets. A deeper understanding of transition finance needs at the country and sector level is an important element to facilitate climate aligned finance; as well as the implementation of effective finance and de-risking mechanisms and policy change to mobilise sufficient transitional investment from private and public sources.

Our interdisciplinary team combines global insights with in-country development cooperation and technical expertise to support policy makers, investors, business, and civil society to:

  • Develop criteria and tools for Paris aligned investment decision making
  • Support reforms and development and implementation of climate strategies in public and development finance organisations
  • Track and analyse finance sector climate initiatives and their impact
  • Analyse  climate risk, especially transition  and high carbon lock-in risk
  • Analyse national and sectoral investment and transition finance needs
  • Analyse  effective finance instruments and enabling policies


Tracking the progress of subnational and non-state climate action

Page navigation About the project The consortium Relevant publications About the project Since 2018, the consortium comprised of...

Operationalization Framework on Aligning with the Paris Agreement

In 2017, the International Development Finance Club (IDFC) together with the group of Multilateral Development Banks (MDBs) made a...

Strengthen national climate policy implementation: Comparative empirical learning & creating linkage to climate finance

As part of implementing nationally determined contributions (NDCs), governments face the challenge of supporting national climate...

Deep Decarbonisation in Latin America

The project is funded by the International Climate Initiative (IKI) of the German government and implemented by SouthSouthNorth (lead)...

Landscape of Climate Finance: Promoting debate on climate finance flows in Central Europe

The transition to a low-carbon economy requires an unprecedented redirection of financial flows towards sustainable investments. In...

Multilateral Development Banks and the Paris Agreement

NewClimate Institute, together with  Germanwatch, WRI and E3G, provides inputs to multilateral development banks in supporting the...

Innovative Financing Options for the Adaptation Fund

The Adaptation Fund is an established fund that supports developing countries in managing impacts of climate change with special...

2°C compatible investment criteria

NewClimate Institute led a consortium of Germanwatch, the 2°investing initiative and McKinsey to develop criteria and a toolkit for...

Climate Audit of the EU’s Foreign Policy
Publication date 28 Apr 2023

The European Green Deal shifted climate to a central pillar of the European political agenda. It sets out the ambition to be a climate...

Deutsche LNG-Ausbaupläne führen zu Überkapazität und gefährden Klimaschutzziele
Publication date 17 Mar 2023

Dieser Bericht liefert einen Review und eine klimapolitische Einordnung der aktuellen Studienlage zu neuen und geplanten Flüssigerdgas...

The role of hydrogen in decarbonisation - Investment opportunities for Latin America
Publication date 23 Feb 2023

Hydrogen is expected to play an important role in the decarbonisation effort to keep global warming at 1.5 degrees. Net-zero models...

Plans for German liquefied natural gas terminals are massively oversized
Publication date 13 Dec 2022

You can find a German version of the report here. Germany’s planned LNG import terminals are not necessarily required to compensate for...

Pläne für deutsche Flüssigerdgas-Terminals sind massiv überdimensioniert
Publication date 08 Dec 2022

You can find an English version of the report here. Die derzeitig geplanten deutschen LNG -Import-Terminals sind nicht zwingend nötig...

Development finance in the land sector: tracking progress towards Paris alignment
Publication date 06 Dec 2022

Development finance institutions have a crucial role to help bring about the needed shift in global food systems and the land sector...

Making finance consistent with climate goals?
Publication date 16 Nov 2022

Climate has arrived on the financial world’s agenda – ambition is still a question Climate change has clearly arrived on the financial...

Aligning Policy-Based Finance with the Paris Agreement
Publication date 27 Oct 2022

Various public development banks provide unearmarked loans to countries in exchange for policy and institutional reforms through what...

Evaluating corporate target setting in the Netherlands
Publication date 05 Jul 2022

An assessment of the climate action plans of 29 Dutch companies and financial institutions In this publication, we scrutinise the...

Climate Investment in Latin America
Publication date 24 Nov 2021

This report, the first in a series of three, focuses on the policy landscape needed to enable a transition to net zero emissions...

The World Bank’s sector notes encourage the consideration of transitions, but lack sufficient detail to ensure full alignment with the Paris agreement
Publication date 10 May 2023

A joint blog by NewClimate Institute, Germanwatch, E3G, and NRDC by Hanna Fekete, Imogen Outlaw, Santiago Woollands, Anja Gebel, Laura...

Review of “Paris compatible sectoral guidelines of the KfW Banking Group” for Electricity, Oil, and Gas
Publication date 27 Mar 2023

Background and summary: At COP 26 in Glasgow in 2021, Germany signed a pledge to end international finance of fossil fuels by the end...

Climate action in agriculture is essential for food security
Publication date 27 Oct 2022

This blog is part of a series debunking ‘myths’ about trade-offs between climate action and development. It is intended for decision...

German support for gas investments abroad is mostly not compatible with the Paris Agreement
Publication date 20 Oct 2022

This blog was first published in German. In the wake of the Russian invasion in Ukraine and the resulting energy crisis, in June 2022...

Deutsche Unterstützung für Gas-Investitionen im Ausland ist in den allermeisten Fällen nicht mit Pariser Klimaschutzabkommen vereinbar
Publication date 20 Oct 2022

This blog is also available in English. Angesichts des russischen Angriffskriegs auf die Ukraine und der daraus resultierenden...

Koalition braucht dringend einheitliche Klima-Außenpolitik
Publication date 12 Oct 2022

Die mit einer vielbeachteten Vision angetretene Ampelregierung agiert in der Außenpolitik noch ohne klaren Kompass. Das darf sich...

Increased transparency and improved due diligence is critical to mobilizing climate finance
Publication date 09 Aug 2022

Image via Pixabay A few weeks ago, the G20 published a report on “Boosting MDBs’ investing capacity” written by an expert panel tasked...

Major Dutch companies’ climate pledges fall short of what is needed for Paris Agreement
Publication date 05 Jul 2022

Berlin, 5 July 2022 – New analysis published today shows that major Dutch companies only commit to reduce their emissions by 19% by...

MDBs Pledged to Align Financial Flows with the Paris Agreement. They’re Not There Yet
Publication date 03 Nov 2021

Image by Milos Golubovic via flickr (CC BY-NC-ND 2.0) Two years after the 2015 Paris Agreement, the world’s multilateral development...

Gas investment is not the solution to the current energy crisis
Publication date 21 Oct 2021

Much of the world currently finds itself in the midst of an energy crisis tied to jumps in the price of gas. Expanded investments in...

Online event: Boosting multilateral investments for biodiversity
Venue Online
Date 08 Dec 2022
Start time 12:00 pm

In the framework of the OECD Multilateral Development Finance Week 2022, NewClimate joined E3G's event on boosting multilateral...

COP27: Aligning financial institutions’ strategies and operations with the Paris Agreement objectives
Venue COP27, IDFC Pavilion and Online
Date 16 Nov 2022
Start time 04:00 pm

An event hosted by International Development Finance Club exploring 2050 pathways for climate and sustainability finance. The event...

COP27: Ready for the next crisis? How MDBs can support the transition to a low-carbon, resilient economy by aligning with the Paris Agreement (shareholder and CSO perspectives)
Venue COP27, EU Online Pavilion
Date 16 Nov 2022
Start time 12:30 pm

The event provided an overview of the state of play and remaining challenges of the multilateral development banks’ (MDBs’) Paris...

Workshop: Landscape of climate finance: From supporting recovery globally to recent advances in the CEE region
Venue Online
Date 27 Oct 2020

Aki Kachi presented on "Current trends in green recovery measures" at the "Landscape of climate finance: From supporting recovery...

Online event: Unpacking the finance sector's investment commitments
Venue Climate Week NYC 2020
Date 28 Sep 2020

Katharina Lütkehermöller, Thomas Day (both NewClimate), Mark Roelfsema (Utrecht University), Jesica Andrews (Net Zero Asset Owner...

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