The “Scaling Transition Finance” report, published in October 2024 by the Transition Finance Market Review (TFMR), offers a comprehensive roadmap for mobilizing the substantial capital required to achieve global net-zero goals. Commissioned by the UK government and hosted by the City of London Corporation, the report emphasizes the pivotal role of transition finance in decarbonizing high-emitting sectors such as industry, transport, and agriculture.
According to the report, the UK will need to increase annual investments to approximately £50–60 billion by the late 2020s and 2030s to meet its net-zero commitments. Globally, BloombergNEF estimates that annual investments must rise to $6.7 trillion to align with decarbonization goals.
The TFMR identifies several barriers hindering the scaling of transition finance, including a lack of standardized definitions, inconsistent disclosure requirements, and insufficient policy alignment. To address these challenges, the report recommends:
- Establishing clear and credible transition plans: Organizations should develop robust strategies outlining their pathways to net-zero, ensuring transparency and accountability.
- Enhancing policy and regulatory frameworks: Governments should provide consistent and supportive policies that facilitate investment in transition activities.
- Promoting international collaboration: Aligning standards and practices across jurisdictions can reduce fragmentation and encourage cross-border investments.
To implement these recommendations, the Transition Finance Council was established, comprising stakeholders from finance, industry, government, and civil society. The Council focuses on three key areas: ensuring credibility and integrity in transition finance, developing effective policies and governance structures, and scaling financial flows to support decarbonization efforts.
By providing a strategic framework and actionable recommendations, the “Scaling Transition Finance” report serves as a vital tool for policymakers, investors, and businesses committed to facilitating a just and effective transition to a low-carbon economy.
