Road to COP30: Finding investment opportunities in countries’ climate plans – United Nations Environment Programme Finance Initiative (UNEP FI)

Report on Aligning Climate Finance with Sustainable Development Goals Ahead of COP30

Introduction: The Paris Agreement and the 2030 Agenda

In anticipation of the tenth anniversary of the Paris Agreement at COP30, signatory nations are preparing to submit updated Nationally Determined Contributions (NDCs) for 2035. These submissions are mandated to demonstrate a heightened level of ambition in reducing greenhouse gas emissions, directly supporting the objectives of Sustainable Development Goal 13 (Climate Action). Increasingly, these NDCs are integrated with National Transition Plans (NTPs), which provide financial roadmaps for achieving climate targets. The upcoming COP30 will be a critical juncture for assessing how nations are leveraging these plans to attract private investment, thereby creating a powerful synergy between climate objectives and the broader Sustainable Development Goals (SDGs).

The Role of Private Finance in Sustainable Development

Mobilizing Capital for Climate and Development Goals

The private sector’s role in financing a sustainable transition is expanding significantly. In 2023, annual climate finance contributions from the global finance and corporate sectors surpassed USD $1 trillion, outpacing the growth of public climate finance. This mobilization of private capital is a core component of SDG 17 (Partnerships for the Goals), which recognizes the necessity of multi-stakeholder partnerships to achieve the 2030 Agenda. As of October, 62 countries have submitted updated NDCs, with nations such as Nepal and Brazil providing detailed strategies for private sector engagement. This trend indicates a growing global commitment to creating investable frameworks that advance SDG 13 while also fostering economic resilience and growth, in line with SDG 8 (Decent Work and Economic Growth).

National Transition Plans as Investment Blueprints for the SDGs

For financial institutions prepared to make climate-aligned investments, National Transition Plans serve as essential blueprints. These plans translate high-level climate commitments into tangible investment opportunities. They outline a pipeline of specific projects and infrastructure ready for private investment, distinguishing between those requiring concessional finance and those suitable for commercial capital. This structured approach helps channel finance towards a just transition, contributing to SDG 10 (Reduced Inequalities) by ensuring that climate action benefits all segments of society.

Frameworks for Evaluating SDG-Aligned Investment Opportunities

Financial institutions can assess the viability of financing opportunities by analyzing key components of a country’s National Transition Plan. This evaluation allows for the alignment of investment portfolios with multiple Sustainable Development Goals.

• Industrial Strategies and Sectoral Pathways: These elements provide guidance for engaging with specific industries on their decarbonization plans. This directly supports the modernization of infrastructure and the promotion of sustainable industrialization as outlined in SDG 9 (Industry, Innovation and Infrastructure) and accelerates the shift towards SDG 7 (Affordable and Clean Energy).
• Policy and Regulation: Mechanisms such as carbon pricing, subsidies, and tax incentives create more favorable risk-return profiles for low-carbon investments. By leveraging these policies, financial institutions can develop innovative financial products that advance both SDG 7 and SDG 13.
• Policy Enabling Environment: The presence of sustainable finance taxonomies, climate-related disclosure rules, and due diligence requirements helps financial institutions identify transition-aligned activities. This environment enables investment in corporate activities that support national sustainability goals, including the preservation of biodiversity under SDG 15 (Life on Land). International policy alignment, such as multi-jurisdiction taxonomies, further strengthens SDG 17 by facilitating cross-border sustainable investment.

Outlook: COP30 as a Catalyst for Sustainable Investment

Accelerating the Transition to a Net-Zero, Resilient Future

COP30 presents a significant opportunity for the global finance sector to identify and invest in markets demonstrating bold climate leadership. As countries establish new targets, their plans will increasingly focus on integrated goals that are central to the 2030 Agenda.

1. Accelerating the transition to renewable energy to meet SDG 7.
2. Preserving nature and ending deforestation in alignment with SDG 15.
3. Achieving net-zero emissions to fulfill the core objective of SDG 13.
4. Realigning trillions in global finance to support these interconnected goals, reinforcing SDG 17.

Fostering Public-Private Collaboration for a Sustainable World

The successful achievement of a just transition to a net-zero and climate-resilient future depends on robust collaboration between the public and private sectors. This partnership model is essential for generating a triple bottom line of societal, environmental, and financial growth, thereby ensuring that progress on climate action simultaneously advances the comprehensive and indivisible framework of the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 13: Climate Action
   • The entire article is centered on climate action, discussing the Paris Agreement, Nationally Determined Contributions (NDCs) for greenhouse gas reduction, and financing the transition to resilient economies. It directly addresses the need for urgent action to combat climate change and its impacts.
2. SDG 17: Partnerships for the Goals
   • The article emphasizes the critical role of partnerships between the public and private sectors. It details how governments can attract private investment through National Transition Plans and how financial institutions can leverage these plans. The mention of COP30 as a forum for collaboration further underscores this goal.
3. SDG 7: Affordable and Clean Energy
   • The text explicitly mentions that countries are setting new targets to “accelerate the transition to renewable energy.” This directly aligns with the goal of ensuring access to affordable, reliable, sustainable, and modern energy for all.
4. SDG 15: Life on Land
   • The article states that new national targets aim to “preserve nature, end deforestation.” This connects directly to the goal of protecting, restoring, and promoting the sustainable use of terrestrial ecosystems and halting deforestation.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 13 (Climate Action)
   • Target 13.2: “Integrate climate change measures into national policies, strategies and planning.” The article’s core subject is the development and implementation of Nationally Determined Contributions (NDCs) and National Transition Plans, which are the primary instruments for integrating climate action into national planning.
   • Target 13.a: “Implement the commitment undertaken by developed-country parties… to a goal of mobilizing jointly $100 billion annually… to address the needs of developing countries…” The article discusses the need to “realign trillions of dollars in global public and private finance” and highlights that private sector climate finance reached “$1 trillion for the first time in 2023,” showing a focus on mobilizing financial resources for climate action, far exceeding the original target.
2. Under SDG 17 (Partnerships for the Goals)
   • Target 17.3: “Mobilize additional financial resources for developing countries from multiple sources.” The article details how National Transition Plans are designed to attract private investment and mentions that “Countries representing developing markets… have also strengthened their climate investment readiness signals,” pointing to efforts to mobilize finance from the private sector for these nations.
   • Target 17.17: “Encourage and promote effective public, public-private and civil society partnerships…” The text is a clear call for and analysis of public-private partnerships, explaining how financial institutions (private sector) can use government-created National Transition Plans (public sector) to guide investment decisions and “accelerate the just transition.”
3. Under SDG 7 (Affordable and Clean Energy)
   • Target 7.a: “By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology.” The article describes how National Transition Plans provide a “transaction pipeline that is ready for private investment” which includes projects to “accelerate the transition to renewable energy.”
4. Under SDG 15 (Life on Land)
   • Target 15.2: “By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation…” The article explicitly mentions that a key goal of the new national targets is to “end deforestation,” directly aligning with this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Explicit Indicators
   • Indicator related to SDG Target 13.2: The article provides a direct number for measuring progress on national climate planning: “As of early October, 62 countries have submitted their updated NDCs and more are expected.” This serves as a quantifiable measure for Indicator 13.2.1 (Number of countries with nationally determined contributions).
   • Indicator related to SDG Target 13.a: The article quantifies the amount of climate finance mobilized by the private sector: “the global finance and corporate sector grew their average annual climate finance contributions to USD $1 trillion for the first time in 2023.” This figure can be used to measure progress for Indicator 13.a.1 (Mobilized amount of United States dollars per year for climate finance).
2. Implied Indicators
   • Indicator related to SDG Target 17.3: The existence and detail of “private sector mobilization strategies” within the NDCs of countries like Nepal and Brazil are implied indicators of progress in mobilizing resources for developing countries.
   • Indicator related to SDG Target 7.a: The creation of a “transaction pipeline that is ready for private investment” within National Transition Plans is an implied indicator of promoting investment in clean energy infrastructure. The number of such projects or the value of this pipeline could be used for measurement.

4. Summary Table of SDGs, Targets, and Indicators

Source: unepfi.org