NZAOA Unveils Roadmap To Unlock Climate Finance

By 2035, mobilizing $1. 3 trillion in private climate finance annually is no longer a bold goal—it is a dire need. Representing 86 institutional investors with $9. 2 trillion under management, the Net-Zero Asset Owner Alliance (NZAOA) has presented a strategic roadmap meant at reaching this goal. Presented during stakeholder meetings on the Baku to Belem project, the investor-focused strategy seeks to increase private capital flows into climate solutions especially in developing countries.

During the June Climate Sessions in Bonn, Erich Cripton, who co-leads the policy track for NZAOA and represents La Caisse (formerly CDPQ), spoke before the UNFCCC Secretariat and the COP29 and COP30 presidencies. Reducing friction, using current financial instruments, and promoting cooperation across public and private sectors, Cripton stressed the main goal of the plan: to substantially boost private capital flow toward climate action.

The NZAOA road map specifies a group of related initiatives designed to remove the impediments now preventing private climate finance. Cripton said that private capital is ready to be invested but is still hampered by antiquated regulatory systems, lack of openness, and structural flaws in climate financing instruments.

The plan's foundation is the increased use of catalytic capital—funds meant to take on more risk or accept less returns to draw more risk-averse private investment. Cripton observed that simplifying reporting processes and application for catalytic capital might be transformative. "Catalytic capital can be a strong co-investment force if we lower the friction presently holding it back," he said.

Another pillar of the plan is the standardization of blended finance tools. Already showing promise is blended finance, where public and charitable money de-risks investments for private capitalists. Its scaling has been constrained by high transaction costs and intricate systems, though. The NZAOA is pushing for the development of uniform templates and structures in order to reduce expenses and promote more extensive use of blended financial solutions.

Another major difficulty comes from the absence of projects suitable for investment, especially in developing countries. Many of these marketplaces lack the financial systems or technical ability to create "bankable" climate projects. With early-stage technical support and risk reduction tools helping to make them more appealing to investors, NZAOA is advocating for larger pipelines of realistic projects.

Multilateral development banks (MDBs) were also boldly called to greatly boost their capacity for private capital. MDBs now generate just $0. 50 of private investment for every $1 on their balance sheets. The road calls for a fivefold increase, to a 5:1 ratio by 2035. Cripton urged MDBs to change their operating models to emphasize more co-investments and risk-sharing partnerships with private investors. “We need to shift the mindset—from lending to enabling," he stated.

The roadmap also emphasized data quality and transparency. Investment in emerging markets is frequently hampered by exaggerated risk perceptions, which drive up the cost of capital, Cripton pointed out. Resolving these problems calls for better data availability—through projects such the GEMs (Global Emerging Markets) database—and greater openness from both MDBs and private actors. Correct, prompt data can reduce actual and perceived investment risks, therefore paving the way for greater capital flows.

The roadmap also calls for a review of existing regulatory frameworks that govern institutional investments. Current prudential rules often discourage long-term investment in illiquid assets like infrastructure, which are critical for climate adaptation and mitigation. Cripton stressed the need for policy reform that supports long-duration climate-aligned investments. He said, "Institutional capital is available—but regulations must evolve to allow it to flow where it's needed most. "

Notably, the roadmap builds on a rich base of insights and prior research. Cripton cited the Call to Action for Policymakers on Private Capital Mobilization, launched at COP29, as well as proposals from New York Climate Week and the B20 Taskforce to the Brazilian G20 presidency. "These insights already give a solid evidence base," he remarked; let's use them to generate momentum instead of beginning from scratch.

With COP30 approaching and growing international pressure to convert climate finance pledges into actual results, the NZAOA's roadmap arrives at a critical point. Cripton emphasized the Alliance's preparedness to act beyond as a proactive partner in the Baku to Belem process.

Cripton said in conclusion that the yearly goal for climate finance of $1. 3 trillion is attainable—but only if all parties cooperate successfully and align their incentives. "Achieving $1. 3 trillion annually in private climate finance is totally doable—if we align incentives, cut friction, and act together," he said.

The path put forth by the NZAOA provides a timely, ordered approach to increasing private capital as the climate catastrophe worsens. The route from dream to reality is starting to become clear as institutions, development banks, and governments are all using the same playbook.