With COP 30 underway in Belém, governments, development institutions, and investors are now being asked to turn national climate targets into real and deployable investment plans. In practice, that requires a financial architecture capable of directing capital to the sectors and countries where it matters most.

Few organisations sit as close to that challenge as the United Nations Development Programme (UNDP), which operates across 170 countries supporting governments on development and climate priorities. At the centre of this effort is the UNDP Sustainable Finance Hub, which works to align public and private capital with development needs on the ground.

To learn more about what needs to happen to meet global climate and development targets, Trade Treasury Payments’ (TTP) Trade and Technology Editor Carter Hoffman spoke with UNDP Sustainable Finance Hub Director Tom Beloe.

Making climate ambition investable

The central question now is how those climate targets become investable. In line with that question, this year’s COP has been framed by many as a COP of implementation. The third generation of nationally determined contributions (NDCs) is being prepared, and the level of ambition embedded in those NDCs will shape the trajectory of global emissions for the decade ahead. Beloe, however, stressed that ambition alone is insufficient.

“NDCs need to have a level of ambition that is going to keep us close to that 1.5 degree rise,” he said, “and for them to be ambitious, they have to be investable. They have to have finance behind them for us to be able to turn paper into reality.”

That is where the Baku to Belém roadmap comes in. The roadmap sets out how to mobilise $1.3 trillion annually by 2035 for climate action. What is distinct this time is that ministries of finance are taking responsibility for bringing the plan to life. Indeed, the government of Brazil has convened a circle of finance ministers to guide the financing agenda.

This is a notable shift as COP discussions have historically been led by ministries of environment and climate specialists. Bringing finance ministries into the core of the process is a positive sign that there is a maturing understanding of climate action as a capital allocation challenge.

It also shows how COP 30 is aiming to move the system from commitment-making to actual investment pathways.

The SDG financing gap is solvable if the system changes

A central challenge facing climate and development progress is the scale of the SDG financing gap, which is estimated to be around $4.3 trillion annually. This gap, however, is not driven by a shortage of global capital since there is more than $400 trillion in global wealth. Only a small fraction of that amount would be enough to plug the gap. 

The difficulty lies in how capital is priced, allocated, and directed through the financial system and structural frictions continue to hold investment back. Many commercial banks still allocate a significant amount of funds to fossil fuel infrastructure while governments in many regions still make use of fossil fuel subsidies. At the same time, developing countries face borrowing costs that are far higher than those of advanced economies,which limits their ability to raise funds in international capital markets. In effect, the countries that need investment most often face the highest cost of capital.

There are positive indicators that this is changing. Investment in clean energy surpassed $2 trillion in 2024, and the cost of solar generation has fallen to a fraction of fossil-based alternatives. Unfortunately, the progress has not been even. 

This is where development institutions play a distinctive role. By helping governments stabilise policy environments, build credible transition plans, and signal their long-term direction to investors, organisations like UNDP can help these countries reduce their perceived risk and make it more viable for private investors to enter. They are part of the infrastructure that enables capital to move where it is needed most.

Where UNDP fits in the investment chain

UNDP is not a financial institution and it does not deploy capital directly. Its value lies in the work that happens before capital enters the equation. The Sustainable Finance Hub, in particular, focuses on aligning development priorities with financial mechanisms that private investors can understand and trust.

“We bring sustainable development to financial reform and to financial transactions,” Beloe said, “in a way that enables finance to be aligned and leveraged for sustainable development.”

One example is the support UNDP provides to ministries of finance on sustainability-linked sovereign bonds. While the financial transaction itself is handled by banks and multilateral institutions, UNDP’s steps in to help governments define how bond proceeds will be used and to establish credible monitoring frameworks. This helps ensure that the capital raised supports real development priorities and that outcomes can be verified over time.

The work also extends into policy and regulatory de-risking. Climate commitments only become investable when investors can see how they translate into sector-level plans. UNDP supports governments in articulating these plans with sufficient clarity and granularity. The aim is to reduce any perceived policy volatility, which in turn lowers the cost of capital.

In many countries, the challenge is not just lack of capital, but lack of bankable projects. UNDP works with governments and financial partners to identify opportunities that meet both development needs and investor requirements. In Nigeria, for example, this involved mapping viable healthcare enterprises led by women and structuring them into an investment pipeline that ultimately reached more than $100 million. While that amount is modest compared to global totals, the developmental impact of the UNDP’s involvement is significant and replicable.

A further area of work focuses on impact management and measurement. Investors increasingly want to demonstrate alignment with the SDGs, yet many lack frameworks that allow them to report development outcomes with credibility. UNDP has developed SDG impact management standards that are now being rolled out globally in partnership with the International Organization for Standardization (ISO). This provides a shared language for assessing development performance alongside financial returns.

Taken together, these activities form part of the institutional infrastructure that allows capital to move with greater confidence. They do not replace private investment, but they make private investment more feasible and more likely to deliver development impact.

Aligning public and private capital around shared priorities

These upstream interventions only matter if the capital that follows supports national priorities rather than scattering across isolated initiatives. That alignment between public and private finance sits at the core of the Compromiso de Sevilla, agreed earlier this summer during the 4th International Conference on Financing for Development.

The agreement places greater emphasis on country-led approaches to financing. Rather than structuring development around individual transactions, governments are being encouraged to strengthen the policy and institutional frameworks that allow them to negotiate investment on their own terms. 

UNDP’s role links directly to this. Through its support for integrated national financing frameworks, the organisation helps countries bring together public budgets, development finance, and private investment plans into a coherent whole. When those elements are aligned, it becomes easier to direct investment to the sectors that advance both climate objectives and broader development priorities.

The Tropical Forests Forever facility, announced earlier this month with an initial $5 billion, provides a strong example of this approach. Designed to support the protection of tropical forests, the facility allocates 20% of its funding directly to indigenous communities. This recognises the role those communities play in the conservation and begins to address the long-standing gap in directing climate finance to local actors.

A financial system that values development outcomes

Looking beyond COP 30, the long-term question is how to consolidate this shift. 

“We need a financial system that is required to develop a metric of investment that looks in equal measure at financial returns and financial risks and development returns and development risks,” Beloe said.

Some of this realignment is already underway. Clean energy is attracting record investment, and cost curves continue to move in favour of renewables. The priority now is ensuring that this transition is accessible and affordable for countries facing the highest cost of capital.

The question, then, is how countries and investors work together over time. Countries will be looking for financing that supports their development plans, and investors will be looking for confidence that those plans will hold up over the long term.

If countries and investors can work on that basis, the progress now underway can continue and deepen over time. Climate and development priorities do not need to sit apart. They can advance together when financing reflects the needs of the countries shaping the transition.