Climate finance push forces investors to reroute capital

On Sept. 23 at the U.N. Climate Summit, Secretary-General Antonio Guterres renewed a call for climate finance to reach $1.3 trillion annually by 2035 and asked G20 members to lead; the group accounts for roughly 80% of global emissions.

A Climate Week panel the following day in New York brought together four finance and sustainability leaders to discuss how to direct those sums. Participants were Colin le Duc of Generation Investment Management, Mindy Lubber of Ceres, Nigel Topping of Ambition Loop and Kyung-Ah Park of Temasek.

Panelists raised a gap between where private capital flows today and where emissions reductions or adaptation would have the greatest effect. Colin le Duc, founding partner at Generation Investment Management, cited 2025 figures showing about $2.2 trillion flowed into clean energy versus roughly $1 trillion into fossil-related projects. He argued financial mandates should better reflect opportunities in heavy industry and emerging markets where emissions are concentrated.

Le Duc told the session, “If we wrote it, it would bounce. We don’t have a trillion dollars ourselves. But we can certainly help influence that capital reallocation, which is the fundamental challenge of sustainability.” He also warned that client mandates and market inertia can limit where large asset owners place money.

Mindy Lubber, president and CEO of Ceres, described a shift in investor focus from treating climate as primarily a risk-management issue to integrating climate as an investment consideration across standard portfolios. She observed, “It really is now about the opportunity side,” and said asset allocators must balance returns for beneficiaries while adjusting allocations away from high-carbon activities.

Nigel Topping emphasized that large sums typically follow many smaller, early-stage investments. He pointed to solar and electric vehicles as examples of technologies that reached scale after repeated rounds of financing. “You never get to the trillion unless you go to the 10s and then 100s,” he said, urging financiers to work with developers and governments to reduce upfront risk for industrial decarbonization projects like steel and cement.

Kyung-Ah Park, head of ESG investment management and managing director of sustainability at Temasek, described a two-speed transition in markets and portfolios. She noted that Temasek has a 2050 net-zero pledge and has completed about the first 30% of an interim emissions cut, but that the remaining reductions will be harder. “We are in a bit of a two-speed transition,” Park said, adding that higher cost of capital and policy volatility make long-payback, capital-intensive projects more difficult to finance at scale.

Panel members named practical steps to change capital allocation: redesign client mandates to prioritize decarbonization in hard-to-abate sectors, create public-private structures that lower early-stage risk, and scale financing tools aimed at less mature technologies and geographies. The speakers noted that Guterres had urged major economies to lead on mobilizing finance.

The panel closed by saying that reaching the level of annual financing Guterres outlined will require policy support, patient capital and new investment structures to shift money into the sectors and regions where emissions cuts and adaptation are most needed.