auctusESG | Insights | June H2 2025
Data dashboard
This graph highlights a substantial disparity between current climate finance flows and the projected requirements necessary to achieve global climate objectives. As of 2023, climate finance stood at US$1.9 trillion, while the annual investment needed for effective climate action is estimated to range between US$6.8 trillion and US$11.7 trillion by 2050. Should the compound annual growth rate (CAGR) of 26% observed since 2020 persist, climate finance flows could reach US$6 trillion by 2028. Conversely, if the slower CAGR of 19% recorded since 2018 continues, this target may only be realised by 2031. This contrast underscores the pressing need to accelerate the pace of investment in order to bridge the growing financing gap and meet long-term climate goals.
The insights derived from this analysis are twofold. Firstly, while the current trajectory of climate finance growth is encouraging, it remains insufficient to meet the scale of future demands. Secondly, the projected surge in climate-related financing needs calls for urgent and coordinated action from both public and private stakeholders. Moving forward, strategic priorities should include the mobilisation of innovative financing mechanisms, increased use of blended finance, strengthened policy frameworks, and a greater allocation of resources to high-impact sectors. To ensure the global climate targets remain within reach, sustaining—or ideally exceeding—the current growth momentum in climate finance is not merely beneficial, but imperative.
Read more here. Climate Policy Initiative
News roundup
Global energy CO2 emissions reached a record high last year
Global CO2 emissions from the energy sector reached a record high in 2024 for the fourth consecutive year, despite strong growth in renewables, according to the Energy Institute’s annual review. All energy sources saw increases, with fossil fuels still dominant. The findings highlight the urgent challenge of accelerating the transition to clean energy amid geopolitical tensions and the world’s failure to meet climate targets.
Despite record growth in renewables, global reliance on fossil fuels continues to drive energy-related CO₂ emissions to new highs, exposing the gap between climate commitments and real-world progress. Geopolitical tensions are reshaping energy flows and complicating the transition, underscoring the urgent need for faster, more coordinated action to meet net-zero targets and limit global warming.
Countries agree 10% increase for UN climate budget
Nearly 200 countries have agreed to increase the UN climate body's core budget by 10% to €81.5 million for 2026–2027, signaling continued global commitment to climate cooperation. China’s contribution will rise from 15% to 20%, while the U.S. retains the largest share at 22%. The decision comes despite funding cuts across other UN agencies and the U.S. absence from the Bonn climate talks.
The 10% UNFCCC budget increase signals strong global commitment to climate cooperation, despite broader UN funding cuts. China’s rising contribution reflects its growing role, while the U.S. absence highlights the importance of private support in sustaining climate efforts.
Read more here. Reuters Kate Abnett
UK releases draft sustainability, climate reporting standards aligned with IFRS
The UK has released draft Sustainability Reporting Standards aligned with IFRS S1 and S2, introducing key UK-specific changes. Notably, a two-year climate-first relief period is proposed, allowing firms to prioritise climate disclosures. The government is also consulting on mandating sustainability reporting, transition plan disclosures, and assurance oversight, with feedback open until 17 September 2025. Final standards are expected later this year.
The proposed two-year climate-first relief shows a pragmatic approach to phased implementation, while ongoing consultations suggest a deliberate, evidence-based path toward future mandatory reporting.
Australia launches sustainable finance taxonomy
The Australian Sustainable Finance Institute has launched the country’s first sustainable finance taxonomy—a voluntary framework to classify green and transition-related economic activities. Developed under the Treasury’s Sustainable Finance Roadmap, the taxonomy aims to enhance transparency and direct private capital towards net zero goals. It aligns Australia with global efforts to define sustainable finance, such as initiatives in the EU, UK, and other major economies.
This voluntary framework enhances market clarity, supports the mobilisation of private capital, and marks a critical step in advancing Australia’s net zero transition. It also reflects the growing international trend of using taxonomies to standardise and scale sustainable finance.
Read more here. ESG Today Mark (Moshe) Segal
India launches landmark green ammonia tender to decarbonise fertilizer sector
Solar Energy Corporation of India Limited has issued a major tender for the long-term offtake of 724,000 tonnes of green ammonia annually to decarbonise the fertiliser sector. Backed by financial incentives and payment security, the scheme aims to reduce reliance on fossil fuels and import dependency. It supports India’s net zero goals, encourages investment in the hydrogen value chain, and promotes clean energy innovation.
This move not only supports the green hydrogen ecosystem and reduces fossil fuel reliance in the fertiliser sector but also signals strong government commitment to clean energy, domestic manufacturing, and long-term energy security aligned with its net-zero vision.
Read more here. ESG TIMES (esgtimes.in) Nirmal Menon
Texas Governor announces the first energy fund loan for 122 mw natural gas facility
Texas Governor has announced that the first Texas Energy Fund (TEF) loan will support the development of a 122-megawatt natural gas power plant. The Kerrville Public Utility Board will lead the project, with costs capped at US$175 million and a 20-year TEF loan of up to US$105 million at 3% interest. Operations are expected to commence by 2027 near Houston’s high-demand South Load Zone.
This signals a strategic shift to support energy infrastructure that ensures grid stability, especially amid growing concerns about extreme weather and renewable intermittency.
Microsoft has signed a deal to purchase 4.8 million nature-based carbon removal credits
Microsoft has signed a new agreement with Anew Climate and Aurora Sustainable Lands to purchase 4.8 million nature-based carbon removal credits over 10 years, generated through improved forest management across 425,000 acres in the U.S. The deal, supported by advanced monitoring technologies, reflects Microsoft’s ongoing commitment to high-integrity carbon removals and its goal to become carbon negative by 2030.
This deal highlights a growing shift towards durable, tech-enabled forest carbon projects, and reflects rising demand from corporates for verifiable, long-term climate impact as part of their net zero strategies. It also showcases the maturing role of private capital in scaling carbon markets.
Read more here. ESG Today Mark (Moshe) Segal
Spotlight
Financing resilience: Bridging the adaptation finance gap in informal settlements
As the climate crisis intensifies, the world’s most vulnerable communities—those living in informal settlements—are bearing the brunt of its impacts. Over one billion people currently reside in informal settlements globally, a number projected to triple by 2050. These densely populated areas, often located in flood-prone or environmentally degraded zones, lack access to adequate infrastructure, services, and legal protection. Residents face compounded risks from heatwaves, flooding, and other climate-induced shocks, making adaptation finance not just a development priority, but a moral and survival imperative.
Climate vulnerability is not evenly distributed—those facing intersecting inequalities like gender, class, and ethnicity often have fewer resources and higher exposure to risk. As the figure shows, marginalisation directly reduces adaptive capacity and amplifies multidimensional vulnerability to climate impacts.
The challenge: Climate vulnerability meets a gaping finance deficit
Informal settlements are often invisible in official datasets, underrepresented in climate policy, and overlooked in financial planning. As a result, adaptation finance remains woefully inadequate. Developing countries need US $160–340 billion annually by 2030 for climate adaptation, yet current flows are 5-10 times below this; a shortfall that leaves urban poor populations dangerously exposed.
In cities like Dar es Salaam, Tanzania, residents in settlements such as Kombo and Kwa Pakacha spend up to one-third of their income coping with climate impacts. That’s money diverted from education, health, and long-term improvements in resilience. Without formal employment, credit history, or land tenure, many residents are also excluded from formal financial systems, making it impossible to secure loans or insurance for adaptation investments.
Moreover, data gaps persist—many informal communities are undocumented, making it difficult to assess risk, design solutions, or allocate funds effectively. This contributes to maladaptation, where ill-targeted interventions fail to address or even exacerbate existing vulnerabilities.
Examples of adaptation finance that delivers
Despite these hurdles, there are powerful examples of how adaptation finance, when localised, inclusive, and innovative can transform informal settlements:
Recommendations to unlock adaptation finance
Toward inclusive climate resilience
Adaptation finance for informal settlements is not merely about allocating funds—it’s about redesigning how those funds flow. Top-down models too often overlook the ingenuity and agency of communities. The most promising solutions combine grassroots innovation with institutional support, building systems that are participatory, scalable, and climate smart.
Without a decisive shift in financing models and policy priorities, millions could be trapped in a cycle of climate-induced precarity. But with the right tools such as community-led finance and innovative partnerships, we can reframe adaptation not as a reactive cost, but as an investment in a more resilient and just urban future.
UNHCR, the UN Refugee Agency World Economic Forum United Nations Environment Programme Finance Initiative (UNEP FI) Asian Development Bank (ADB) International Institute for Environment and Development (IIED) Cities Alliance
Featured events
4th International Conference on Financing for Development (FFD4), 30 June - 3 July 2025, Spain
The United Nations’ 4th International Conference on Financing for Development (FFD4) will be held in Sevilla, Spain, from 30 June to 3 July 2025. The conference will convene governments, international organisations, financial institutions, the private sector, and civil society to explore urgently needed reforms aimed at financing global development more effectively and affordably.
Building on the 2015 Addis Ababa Action Agenda and the commitments made under the 2024 Pact for the Future, FFD4 seeks to establish a renewed global financing framework. A central focus of the discussions will be on enhancing international co-operation and unlocking greater volumes of capital for development through reforms to the international financial architecture.
Read more here. OECD - OCDE Climate Bonds Initiative
The High-level Political Forum on Sustainable Development (HLPF) ,14-23 July 2025, New York
The High-Level Political Forum on Sustainable Development (HLPF) 2025 will take place from 14 to 23 July at the United Nations Headquarters in New York, under the auspices of ECOSOC. The theme for this year’s forum is Advancing sustainable, inclusive, science- and evidence-based solutions for the 2030 Agenda for Sustainable Development and its SDGs for leaving no one behind. The HLPF will conduct in-depth reviews of five Sustainable Development Goals: SDG 3 (Good Health and Well-being), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), SDG 14 (Life Below Water), and SDG 17 (Partnerships for the Goals). A three-day ministerial segment will be held from 21 to 23 July, featuring voluntary national reviews (VNRs) from approximately 39 countries and high-level dialogues on accelerating SDG implementation.
The forum will also include a wide range of side events, thematic sessions, exhibitions, and labs. The HLPF serves as the central platform for reviewing global progress on the 2030 Agenda and fosters collaboration among governments, civil society, academia, and the private sector. It emphasises science-based policymaking and international cooperation as essential to achieving sustainable development and ensuring that no one is left behind.
Read more here. UN Environment Programme
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Read more here. Serhan Cevik João Tovar Jalles (Ph.D.)
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