The world’s first officially recognised climate tipping point was crossed in October 2025, as global warming triggered widespread diebacks of warm-water coral reefs – passing a historic point of no return. This milestone casts a long shadow over COP30, convening this month in Belém, Brazil.
Belém – a small city in the heart of the Amazon rainforest – is a controversial setting for these discussions. Its location in a part of the world that engages with destructive agricultural and forestry practices highlights the fragility of the planet’s ecosystems and the urgency of protecting them. For world leaders, scientists and international representatives, climate risk will not only be on the agenda, it will also be on their doorstep.
The 2024 summit in Baku, Azerbaijan, concluded with the adoption of a global climate finance framework known as the New Collective Quantitative Goal – a landmark commitment intended to mobilise trillions rather than billions in climate finance for developing economies.
Now, the challenge in Belém is to translate that agreement into credible mechanisms for delivery: defining who pays, how funds flow and what governance structures ensure that money reaches the projects and communities that need it most.
Climate disaster
When OMFIF launched its Transition Finance Working Group in 2024, the mission was clear. The working group brought together major global funds to discuss the progress made in the transition finance landscape as well as the challenges, particularly for developing economies bearing the brunt of climate impacts.
Recent catastrophes highlight a disproportionate toll on developing nations, from deadly flash floods across Pakistan and Afghanistan to Hurricane Melissa devastating Jamaica. These are low-emission, climate-vulnerable nations where the cost of rebuilding leaves them on the back foot compared to developed countries. Hurricane Melissa left over 4.8m tonnes of debris blocking roads, schools and hospitals in western Jamaica, severely hampering relief efforts.
While the climate crisis hasn’t spared developed countries either, with intense heatwaves and wildfires sweeping the West and the world’s worst typhoon in Hong Kong also recorded this year, its impacts remain grossly unequal.
In the context of such destruction and disillusionment, demands for accountability and action have intensified. The transition from Baku to Belém must not become a transfer of rhetoric but a test of delivery.
From why to how
The Transition Finance Working Group reconvened this year to dig deeper into the issues facing public pension funds in the transition to net zero. The findings were published in a new report that assessed the transition finance landscape and asked how funds are mobilising capital to support the companies and projects they invest in.
At the launch of ‘The next frontier in transition finance’, Anne Simpson, global head of sustainability at Franklin Templeton, spoke about this in relation to the approaching 10th anniversary of the Paris agreement: ‘Much has been talked about why investors need to become involved and part of the solution on transition finance. The why is clear. This work is really focusing on how. How do we get the job done?’
The ‘how’ hinges on a number of factors, including credibility and investor confidence, which can, in turn, support access to finance. ‘Transition plans are most likely to be successful when aligned with the company’s broader strategic aims’, Vincent Allilaire, vice president and senior credit officer, and Swami Venkataraman, associate managing director and head of sustainable finance assessments at Moody’s Ratings, wrote in the report. ‘This involves a strong governance process that includes senior management ownership, periodic reviews and public commitments.’
Green hushing
The working group conversations revealed that some institutional investors are seeing the funds they invest in delaying or scaling back their net-zero plans. Adriana Mendez, director of sustainability at La Caisse, observed: ‘What we see is that they’re not disclosing as much as before.’ She added that it’s ‘the concept of green hushing: companies are still advancing their transition plans. They’re still very committed to climate change and adaptation. What we have observed is that they’re just working silently towards their objectives.’
Whether done aloud or pursued quietly, the movement to integrate nature-related risks and opportunities into mainstream finance is gaining importance. As Rumi Mahmood, vice president and research director at the MSCI Institute, put it: ‘Today’s investors are realising that nature itself might be a balance sheet item. Without healthy soils, stable rainfall patterns and intact ecosystems, entire business models can start to unravel. We’re at this inflection point now where nature risk is starting to become measurable and therefore investable.’
The handover from Baku to Belém will be one from negotiation to implementation. COP30 is a test of whether global ambition can turn into measurable action, particularly in areas such as nature-based solutions, energy transition financing and climate adaptation in emerging markets and developing countries.
It is prudent that the baton be passed from Baku to Belém effectively, sustainably and successfully. What must not be passed is the proverbial buck.
Janan Jama is Content Editor at OMFIF.
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