When does private finance count as climate finance?

This briefing by the Stockholm Environment Institute examines the challenges of defining and accounting for private finance within the context of the Copenhagen Accord's USD 100 billion annual goal. Using an 'accountability chain' analysis, the authors evaluate how different financial instruments—such as traditional debt, green bonds, equity, philanthropy, and remittances—align the goals of investors with the climate-related objectives of recipients.

• The lack of a clear definition for 'private climate finance' creates uncertainty that undermines the Copenhagen commitment, as it obscures the specific amount of public finance required to meet the USD 100 billion goal and hides risks and opportunities for mobilization.
• Public climate finance is characterized by a 'continuous accountability chain' where actors from developed-country taxpayers to recipient-country citizens share a consistent goal of delivering public goods for climate mitigation or adaptation.
• Traditional private debt instruments, such as bank loans and standard bonds, lack a continuous accountability chain because investors prioritize commercial financial returns over whether the borrower's climate objectives are achieved.
• Green bonds differ from traditional debt by creating a shared interest in climate-related outcomes among investors, intermediaries, and borrowers, resulting in a continuous accountability chain.
• Equity instruments have a stronger link between investment and ground-level outcomes than debt because financial performance is directly tied to the success of the expenditure. However, they are challenging to count as climate finance because they primarily generate private benefits and can be reversed through disinvestment.
• Philanthropy typically maintains a continuous accountability chain due to its close connection to recipient needs, whereas remittances are difficult to account for because they often lack conditions or specified end-uses and are hard to track.
• Accounting for adaptation finance is more complex than mitigation because adaptation lacks a global common metric (like tonnes of GHG emissions) and its effectiveness is highly dependent on local context.

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} }