When does private finance count as climate finance?

The document analyzes the 'accountability chains' of various private financial instruments to determine if they share the climate-related goals necessary to be counted as climate finance. It contrasts public finance, which has a continuous accountability chain focused on public goods, with private instruments like commercial debt, where investors prioritize financial returns over climate outcomes. While green bonds and philanthropy show aligned goals, equity and remittances present complexities regarding transparency, reversibility, and the nature of the benefits delivered.

• Public climate finance is characterized by a 'continuous accountability chain' where actors from developed-country taxpayers to recipient-country citizens share a consistent expectation that funds contribute to reducing greenhouse gas emissions or vulnerability.
• Traditional private debt instruments, such as bank loans and standard bonds, lack a continuous accountability chain because upstream investors are primarily concerned with financial repayment rather than whether the borrower's climate objectives are met.
• Green bonds differ from traditional debt by explicitly seeking to support climate objectives, creating a shared notion of 'effective finance' between investors, intermediaries, and borrowers.
• Equity instruments have a stronger link between the investment and the resulting on-the-ground outcomes than debt, but they are challenging to count as climate finance because they primarily generate private benefits and are reversible through disinvestment.
• Philanthropy typically maintains a continuous accountability chain because its purpose is closely aligned with the needs of the recipients.
• Personal remittances are difficult to account for as climate finance because they often lack conditions or specified end-uses, and tracking the final expenditure is practically challenging.
• Defining 'private climate finance' is a political rather than technical decision, and the lack of a clear definition obscures the amount of public finance required to meet the USD 100 billion commitment.

APA

Atteridge, A., & Dzebo, A. (2015). When does private finance count as climate finance? Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2015-Private-climate-finance-accountability.pdf

Chicago

Atteridge, Aaron, and Adis Dzebo. When does private finance count as climate finance? Stockholm Environment Institute, 2015. https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2015-Private-climate-finance-accountability.pdf.

Wikipedia

{{cite report |last1=Atteridge |first1=Aaron |last2=Dzebo |first2=Adis |title=When does private finance count as climate finance? |publisher=Stockholm Environment Institute |date=2015 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2015-Private-climate-finance-accountability.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{atteridge2015when, author = {Atteridge, Aaron and Dzebo, Adis}, title = {{When does private finance count as climate finance?}}, institution = {Stockholm Environment Institute}, year = {2015}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2015-Private-climate-finance-accountability.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }