Risk to Reward 2025

Unlocking transparent and reliable data When asked to identify the most effective tools for mobilizing private capital, nearly one-third of respondents (32%) highlighted better data and transparency as their top priority, well ahead of other options such as embedding private capital mobilization in development finance (16%) or developing local markets and currency solutions (11%). The preference for better data transparency underscores that, while blended finance instruments and risk-sharing tools are valuable, investors view information gaps as the most immediate and binding constraint to scaling-up climate finance in EMDEs. In practice, this means that, before capital can flow at scale, investors require more reliable pipelines, improved disclosure standards and market intelligence platforms that reduce asymmetry and allow them to make decisions with greater confidence.46,47 Existing platforms – such as Climatescope, the Sustainable Asset Valuation Database (SAVi) of the International Institute for Sustainable Development (IISD), BloombergNEF and Uxolo – track climate projects but often lack real-time accuracy. Political shifts, regulatory delays and financing gaps can alter project status, particularly in frontier markets. Investors therefore rely on local networks and direct intelligence to validate data. Limited counterparty data on transition plans, adaptation measures and greenhouse gas emissions remains a major challenge to private climate finance in EMDEs. Inge-Lise Mackaay, Head of ESG Solutions, FIC, Deutsche Bak Unlocking private capital in EMDEs requires transparent, reliable and comparable climate investment data. Governments should collaborate with MDBs, DFIs, donors and private investors to build open-access registries covering project pipelines, financial performance, market trends and policy environments. These platforms can build on existing initiatives, such as the World Economic Forum’s Playbook of Solutions to Mobilize Clean Energy Investment in EMDEs, which could expand to other climate sectors.48 Although resources such as the World Bank’s Climate Change Knowledge Portal exist, investors still find climate data lacking due to inconsistent methods, limited comparability and precision, and insufficient third-party validation.49 Precise, project- level data is needed to demonstrate the impact and returns of adaptation and mitigation measures. Standardizing methodologies and definitions for financeable activities can also accelerate the development of relevant financial products, as the Guide for Adaptation and Resilience Finance, published by Standard Chartered Bank, KPMG and the UN, does for adaptation activities.50 For example, Impact Earth’s Tropical Resilience Fund (TREF) applies CGIAR-modelled impact frameworks to assess resilience outcomes and boost investor confidence (see Box 6). Tropical Resilience Fund (TREF) – science-based impact tracking BOX 6 Impact Earth invests in nature-based adaptation solutions in tropical EMDEs. What sets this fund apart is its use of science-based, location-specific impact tracking – integrating ecological metrics into investment decisions to assess resilience, biodiversity and carbon outcomes. TREF employs a science-based and comprehensive approach to impact measurement, tracking over 20 indicators encompassing CO2 reduction, ecosystem restoration, species protection, food security, climate resilience and socio-economic outcomes, including livelihoods and inclusion in vulnerable communities. This extensive data collection ensures that investors have access to quantifiable and verifiable metrics, enhancing transparency and investor confidence in a sector traditionally hindered by unclear returns and measurement challenges, which sets this example apart in terms of building investors’ trust in the data. TREF demonstrates how robust impact data can de-risk nature-based adaptation investments and help scale up private finance into adaptation.51Expand access to comparable climate investment data Insurance Project developers Corporates MDBs and DFIs EMDE governmentsSOLUTIONS: SHORT-TERM From Risk to Reward: Unlocking Private Capital for Climate and Growth 26