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CPI has introduced a bespoke taxonomy and machine learning model to better capture private sector adaptation finance, increasing the annual average tracked flows from USD 1 billion to USD 4.7 billion for the 2019-2022 period. The analysis identifies significant gaps in reporting, particularly among insurers and pension funds, while highlighting that the majority of project-level private investment is concentrated in the water and sanitation sector. The report also estimates that annual consumer and household spending on high-adaptation-likelihood products ranges between USD 48 billion and USD 61 billion.

Tracked urban climate finance reached USD 831 billion in 2021/2022, more than doubling since 2017/2018. However, this remains severely insufficient compared to estimated annual mitigation needs of USD 4.3 trillion by 2030. Finance is heavily concentrated in developed economies and China, with critical gaps in sub-Saharan Africa and South Asia. While mitigation flows are dominated by transport and buildings, adaptation finance is significantly lower at USD 10 billion, primarily focused on water and wastewater. The report advocates for a '4C Urban Climate Finance Agenda'—Commitment, Collaboration, Capacity, and Capital Mobilization—to bridge the investment gap.

The report finds that while urban climate finance more than doubled to USD 831 billion in 2021/2022, it must increase more than fivefold to align with a 1.5°C pathway. Mitigation needs are dominated by transport, energy, and buildings, with a significant financing gap particularly in emerging markets and developing economies (EMDEs). The document identifies systemic challenges including weak enabling environments and city-level capacity gaps, and proposes the '4C Urban Climate Finance Agenda' (Commitment, Collaboration, Capacity, and Capital Mobilization) to scale investment.

The methodology employs Functional Urban Areas (FUAs) to define urban scope and tracks primary capital flows for mitigation and adaptation. It combines project-level data from sources like the OECD-DAC and BNEF with capital expenditure estimations for transport, buildings, and energy systems. Needs assessments are derived from top-down global models, adjusted by regional urban population shares and sector-specific inclusion criteria.

The Clean Utilities for Affordable Housing instrument aims to raise USD 54 million (ZAR 976 million) to provide renewable energy as a service to affordable housing residents in South Africa. By partnering with major landlords to aggregate demand and using a catalytic subordinated funding vehicle to derisk investments, the model attracts commercial senior debt to fund solar installations. The first phase targets 28,000 housing units over five years, aiming to generate 1,352 GWh of renewable energy and avoid 1,369 ktCO2e. The instrument is designed to be financially sustainable, with a projected Fund internal rate of return (IRR) of 20-30% in the base case, and intends to expand into township retail and the Kenyan market.

The report analyzes the roles of various public development banks (PDBs) in climate adaptation, identifying significant gaps in collaboration between international multilateral development banks (MDBs) and national development banks (NDBs). It highlights barriers such as misaligned project ticket sizes, lack of shared adaptation taxonomies, and local currency risks. To address these, the report recommends developing complementary taxonomies, utilizing country platforms and regional hubs, enhancing capacity-building, and leveraging blended finance to de-risk adaptation investments.

The Growth Next-Generation Agriculture (GAN) is a proposed BRL 250 million (USD 44.4 million) blended finance debt fund designed to support the transition to regenerative agriculture in Brazil. By providing working capital to small and medium-sized enterprises (SMEs) that produce biological inputs (bio-inputs), GAN enables these SMEs to offer credit to farmers, reducing the sector's reliance on synthetic fertilizers and pesticides. The instrument utilizes a Brazilian financial structure involving Fundo de Investimento em Direitos Creditórios (FIDC) investing in Agricultural Receivables Certificates (CRAs), supported by a proprietary AI credit assessment tool from Traive Finance. The fund includes a technical assistance facility managed by Folio Institute to train farmers and SMEs in regenerative practices. GAN targets environmental outcomes including the transition of 2 million hectares to regenerative practices and the annual avoidance of 2,312 tons of CO2e.

The InvestHER Climate Resilience Bond is Uganda's first gender-focused resilience bond, designed to raise USD 25 million in local currency to close the gender gap in the agrifood system. The instrument targets growth-stage agri-SMEs and local financial service providers (FSPs) to increase the adoption of climate-smart agriculture (CSA) among women farmers. It utilizes a dual-tranche structure (commercial and concessional) and a grant-funded technical assistance (TA) facility to address barriers such as high collateral requirements and lack of female-tailored financial products. The bond aims to reach approximately 3,825 agri-MSMEs, with nearly 100% being women-owned or led, and impact 470,000 hectares of farmland.

The report argues that India requires cumulative investments of US$10.1 trillion by 2070 to reach net-zero, yet current tracked mitigation finance is only about 25 percent of the required amount. It distinguishes between 'green finance' for near-zero emission technologies and 'transition finance' for hard-to-abate sectors that lack immediate green alternatives. The document identifies critical gaps in the supply of finance, noting a lack of standardised taxonomy and an underdeveloped corporate bond market. On the demand side, it analyses the decarbonisation needs of the steel, cement, transport, power, and agriculture sectors, highlighting the high capital costs and technical risks of transformative technologies like Carbon Capture, Utilisation, and Storage (CCUS). The report proposes a five-pillar roadmap covering scope and definition, transparency, cooperation, supply chain support, and financial innovation, while recommending the establishment of a Prime Ministers Net Zero Council (PMNZC) to coordinate inter-ministerial efforts.

Regenera Ventures is a 10-year equity fund targeting the Mexican agricultural sector to build climate resilience through regenerative management. The fund utilizes redeemable equity and technical assistance to bridge financing gaps for SMEs and startups across the regenerative value chain, including direct production, added-value processes, market game-changers, and regenerative infrastructure. It aims to mobilize USD 20-26 million in private capital and plans to scale to other Latin American countries, such as Colombia, within 4 to 5 years.

The Resilient Municipal Market Fund (ReMark) is a proposed blended finance facility designed to address the lack of investment in African urban food markets, which are critical to food security but vulnerable to climate risks. The instrument combines a revolving debt facility for capital expenditure loans (USD 0.5-10 million) and a technical assistance (TA) facility managed by ICLEI Africa to prepare markets for investment. The pilot phase targets six municipalities in East and Southern Africa with a total budget of approximately USD 35 million, including USD 30 million in debt and repayable grants and USD 5 million in TA grants. ReMark categorizes markets into three types (A, B, and C) based on financial maturity, proposing different pathways to bankability, including a Special Purpose Vehicle (SPV) structure for the most challenged markets. Planned retrofits include cold storage, off-grid solar PV, and improved drainage to reduce food waste and greenhouse gas emissions.

The SPV for Silvopasture Scaling aims to transition medium-sized Colombian cattle farms from conventional to sustainable practices by providing capital and technical assistance. It utilizes a profit-sharing model based on productivity gains and the sale of carbon credits to avoid the debt-aversion barriers typical of traditional loans. The instrument is structured into three facilities: SPS Implementation, Carbon Credit, and Technical Assistance. A pilot in El Cesar will test the model before potential scaling to other regions of Colombia and countries like Brazil and Mexico.

The Structured Finance for Nature (SFN) instrument uses a Special Purpose Vehicle (SPV) in Singapore to aggregate a diversified portfolio of natural assets, combining equity, mezzanine finance, and green bonds. It aims to overcome barriers such as high upfront costs and small project sizes to protect and restore one million hectares of forest and wetlands. The pilot project in Agusan del Sur, Philippines, focuses on protecting 91,000 hectares of forest, with future expansions planned for Cambodia, Bhutan, and Indonesia. The model emphasizes high-integrity carbon credits, a 20% minimum benefit-sharing allocation for local and Indigenous communities, and real-time monitoring via a proprietary dashboard.

The Sustana Cooling India Fund is a USD 100 million blended capital equity fund designed to support early-growth companies in India's cooling sector. By utilizing a first-loss cushion and combining senior and subordinated equity, the fund aims to de-risk investments in energy-efficient space cooling and cold supply chains. The instrument targets the 'missing middle' of funding (pre-Series A/B stages) to drive both climate mitigation and adaptation, with a projected return of 18.04% in USD terms for limited partners.

The Amazon Food&Forest Bioeconomy Financing Initiative addresses financial barriers facing Indigenous Peoples and Local Communities (IPLCs) in the Brazilian Amazon through a proprietary fintech platform and a blended finance structure. The initiative combines private debentures (senior and subordinated tranches) with a philanthropic fund to provide growth capital and discounted invoices to regenerative businesses. Currently in a pilot phase with 17 projects and USD 2.7 million deployed, the initiative aims to raise USD 23.12 million in its market phase to scale activities across value chains such as non-timber forest products (NTFPs), community-based tourism, and agroforestry. The goal is to mitigate land-use emissions, protect biodiversity, and improve local livelihoods while attracting commercial private capital to the region's socio-bioeconomy.

The Landbanking Group (TLG) is introducing Nature Equity Assets (NEAs), a new asset class that uses real-time Measuring, Reporting, and Verification (MRV) technology to value the ecological uplift of High Integrity Forests (HIFs) and regenerative agriculture. The instrument employs a blended finance approach, providing discounted loans to land stewards—primarily Indigenous Peoples and Local Communities (IPLCs)—who repay the capital through commodity sales and outcome-based payments from corporate or government funders. Initial pilot projects are targeting the soy and cacao value chains in Brazil, with future expansions planned for Africa, Latin America, and Asia. Quantitative modeling suggests that regenerative agriculture is more profitable for land stewards than conventional methods, though standalone conservation projects currently require concessional grants to be viable.

The report argues that current credit ratings and ESG frameworks fail to adequately measure a company's environmental impact, creating a gap that hinders transition finance for hard-to-abate sectors like steel and cement. To address this, the Climate Policy Initiative proposes a Carbon Rating Framework that evaluates a company's carbon emission intensity over a three-to-five-year horizon. The framework suggests a weighted approach combining past emission intensity (indicatively 70%) and projected future intensity (indicatively 30%), the latter being a function of projected emissions and revenue. The authors propose a 10-point rating scale based on the distribution of carbon intensity among companies reporting under SEBI's Business Responsibility & Sustainability Report (BRSR). The framework focuses on Scope 1 and Scope 2 emissions at the company level and suggests a composite rating system to account for sector-specific challenges in hard-to-abate industries.

The report identifies currency risk—specifically the mismatch between local currency revenues and hard currency debt—as a primary barrier to climate investment in EMDEs. It argues that while long-term solutions require macroeconomic reform and deeper local capital markets, immediate needs must be met through innovative hedging mechanisms. The document analyzes five specific models: a TCX donor-funded guarantee, Eco Invest Brasil, the Delta onshore DFI platform, FSD Africa's MDB portfolio transfer, and a CPI FX Hedging Facility for India. It concludes that concessional capital is essential in the short term to make these tools affordable and to catalyze private investment.

The study finds that the ABC Recuperação credit line has had modest effects on pasture recovery, with most areas remaining unchanged and severely degraded pastures showing little improvement. While some pasture was converted to agriculture, the program's contribution to the Plano ABC goal of recovering 15 million hectares by 2020 was estimated at a maximum of 2.5%. Technical assistance was identified as a critical factor for success, particularly for severely degraded areas. The report also notes that some areas were deforested immediately prior to receiving credit, suggesting a need for better ex-ante monitoring and the integration of risk management tools.

The executive summary evaluates the ABC Recuperação credit program in the Cerrado, finding that it has had very modest impacts on pasture quality and land use. The study highlights that the credit line contributed to at most 2.5% of the 2020 recovery goal and notes a concerning trend where some areas were converted from native vegetation to pasture before receiving credit. It recommends strengthening post-credit monitoring, improving pre-credit evaluations, and integrating technical assistance to enhance environmental outcomes.