With climate change wreaking havoc around the globe, more investment in climate solutions is urgently needed. That was the motivation behind the Climate Finance Fund, set up in 2021 by Marilyn Waite to push for systemic change in the financial system so that it works for people and planet. Its new mission is to divert funds to the global south, where much climate innovation takes place.
‘We are behind the scenes, funding opportunities for change in the financial system. We want to make sure the market rules work for people and planet, which they currently don’t. The inertia of the system is that it does not properly factor in all those negative externalities of fossil fuels and polluting agriculture, for example,’ explains Waite. ‘We also participate in the market directly to prove that something that is perceived by investors as not feasible for climate action, actually is.’
Central to the CFF’s work are social justice and equity, values that inevitably highlight the dearth of climate investment flow to the global south. ‘Between 3 to 15% of climate capital crosses the border into lower- and middle-income countries known as the global south. So it’s a real challenge because the global south is where the majority of the emissions growth is, so that’s actually where most of the action in terms of greenhouse gas mitigation is needed. It’s also where climate change has the largest impacts,’ Waite emphasises.
Waite recently chose Jamaica as the venue for the Global Climate Finance Forum due to its climate vulnerability and also what she calls its ‘climate genius’. ‘There’s been remarkable innovation. Jamaica was the first country, for example, to issue a climate disaster bond.’
However, a reluctance to leave their comfort zone means investors are missing out on some big opportunities. ‘Emerging markets offer outsized returns for a number of financial asset classes. In 2019, for example, Jamaica had the highest returning stock market in the world. So lots of money is being left on the table by excluding the global south from one’s portfolio.’
To make this clear to investors, CFF has backed the funding of a publicly accessible database. ‘You can go to climatesolutionstocks.com and click on ASEAN or Southeast Asia, click on India, click on Latin America and the Caribbean, click on the African Union. So we have, for example, Wigton Energy wind capabilities in Jamaica that’s listed on that stock exchange. In Indonesia, there’s geothermal companies that are listed. In Namibia, there’s a solar developer that’s listed. We need to help motivate and incentivise investors to allocate the capital to those areas.’
