The Private Finance Capacities Day at COP28 aims to explore the experiences, good practices and lessons learned with regards to building the capacities of actors and entities involved in mobilizing and scaling up private climate finance. The private financial sector, which provided 49% (or USD 625 billion) of total climate finance globally in 2021/2022 (CPI’s Global Landscape of Climate Finance 2023), plays a pivotal role in realizing global climate and sustainability goals, influencing where, how, and in what to invest. However, these climate-related investments are only a small fraction of their staggering USD 210 trillion in assets under management.   

Capacity-building in the private finance sector, as well as enhancing access to private finance, are critical to ensure effective implementation of the global climate agenda.  An assertive climate finance agenda has the potential to guide investments that spark innovation and foster resilient climate markets encompassing clean energy, sustainable transportation, green infrastructure, climate-adaptive agriculture, ecosystems restoration, a circular economy and more. 

The Private Finance Capacities Day will explore: 

• Capacity gaps and needs to access climate finance and identify solutions to bridge these gaps in order to contribute to higher ambition and collective action.  

• Spotlight collaborative efforts uniting private, public, and philanthropic institutions, working in tandem on building capacity to unlock private capital alongside government resources, thus propelling climate initiatives forward. 

• Explore and promote innovative financing models, technologies, and strategies that can address emerging challenges and contribute to the resilience of communities and ecosystems. 

• Amplify the diversity of perspectives and experiences among a wide range of actors engaged in capacity building and access to climate finance, encompassing groups in situation of vulnerability across developed, developing and least developed countries.    

Topics  

On Private Finance Capacities Day:  

• The Association of Chartered Certified Accountants (ACCA) and TUV Rheinland will introduce participants to impact investing opportunities related to sustainable development. 

• Amity University Dubai (AMUD) will provide a framework for quantifying ESG factors in the socially responsible investing (SRI) strategy along with guidance on how to enhance the financial performance of investment portfolios.  

• The Commonwealth will facilitate an intergenerational dialogue to share experience, knowledge, and insights for enhancing access to climate finance, introducing innovation and scaling up actions for low-carbon and climate-resilient development strategies. 

• HSBC will discuss the role of commercial banks in capacity building initiatives to mobilize higher climate finance. 

• SMI FSTF, Barclays, HSBC, Mangrove Breakthrough will focus on showcasing to a wider group the power of collaboration among private institutions, NGOs and civil society, in addressing biodiversity loss by correctly price, improving project visibility and transparency of Nature based solutions (NbS). 

• The NDC Partnership will focus on enhancing collective understanding of how to efficiently catalyze private-sector finance for NDC implementation by sharing experiences and best practices with a whole-of-society approach.  

• The World Bank will present strategies to heighten awareness among infrastructure stakeholders and equip them with the necessary insights, guidance and tools to embark on the journey of climate-smart Public-Private Partnerships (PPPs).  

Private finance mobilization plays a decisive role in supporting climate action, contributing significantly to the global efforts to address climate change. Private investments are essential to support innovation, mitigate risks, and support projects that contribute to a more sustainable and resilient future. As the global community embarks on full implementation of the Paris Agreement, it is crucial to build the capacities of all stakeholders both to scale-up the provision of climate finance and to enhance access to private finance.  

Enhanced understanding and expertise: Capacity building will equip individuals and organizations working in the private, public and non-governmental sectors with a deeper understanding of climate finance mechanisms, regulations, and market dynamics. Businesses, in particular, will be able to explore new technologies, business models, and investment strategies to navigate the complexities of climate finance, identify opportunities, and make informed investment decisions. 

Undertake better risk management and due diligence: Capacity building can help private sector actors develop robust risk management strategies and conduct thorough due diligence on climate-related projects. This is crucial in mitigating risks associated with climate investments, enhancing the sector's confidence in allocating funds to sustainable and resilient initiatives.  

Improve national regulatory frameworks governing the financial sector: Capacity building in this area will contribute in aligning the principles and practices of private finance institutions with the goals of the Paris Agreement and the sustainability agenda as a whole, accelerating the transition to green, clean and carbon neutral investment policies and decisions.  

Increase access to funding opportunities: Through capacity building, the private sector gains insights into various funding mechanisms and financial instruments dedicated to climate projects. This knowledge enables businesses to tap into a broader range of funding opportunities, including green bonds, climate funds, and impact investment platforms. 

Empowering local enterprises: Capacity building at the local level aimed at small and medium-sized enterprises (SMEs) to navigate climate finance processes provides them with the tools to contribute meaningfully to sustainability efforts, and benefit from available funding streams.