Skip to content

Climate Challenge: Connecting Domestic Savings to Climate

Summary report written by Vivek Pathak, Regional Chief Risk Officer (APAC), IFC

3 June 2024 -  A few years ago, I was on a flight from Venice to Frankfurt. The person beside me, who seemed like a wealthy pensioner, struck up conversation. On hearing that I worked in the climate change sector, she perked up and said the city of Venice needs to be saved from the dangers of climate change. I asked if she would invest her pension into climate projects in emerging markets—and got a resounding “no”.

Changing such perceptions is a key challenge: Emerging markets are struggling to raise capital to finance important sectors that will drive change. These include energy transitions, the decarbonisation of hard-to-abate sectors, and the agricultural value 
chain.

For countries to be successful in transitioning to a low carbon growth trajectory, the focus must be on Small- and Medium-sized Enterprises (SMEs), who play a critical role in shaping any economy. However, the likelihood of institutional investors financing SMEs in emerging markets is low, and it is clear we need another source of capital. 

FutureMatters is a platform for thought leaders, practitioners, and industry players to share their insights on emerging opportunities and challenges in today's world. Apply to be a contributor here.

COMMENTS

RELATED ARTICLES