Mobilizing private sector investment for climate action: enhancing ambition and scaling up implementation

Private-sector finance has been widely seen as a step to scale up access to resources for ambitious climate action, given the limited availability of public resources. However, there is a knowledge gap about the risks, barriers, and opportunities associated with greater private investment. This paper analyses some important barriers that commonly inhibit private sector investment in climate adaptation action. The analysis draws on case studies of small and medium-sized business (SMEs), multinational companies (MNCs), B corporations and impact investors. Our analysis confirms that private sector actors are willing to invest in climate adaptation, but their investment decisions are constrained by risk profiles associated with climate adaptation projects, the lack of financially viable and bankable projects, and complete knowledge of climate risk that guide adaptation decision. A tailored approach is required to leverage private sector finance, and conducive public policy interventions will facilitate to mobilize different types of private sector actors. Bold