Despite USD 2 Trillion Invested In Green Finance, Experts Highlight Untapped Potential At WIC-SIF 2025

In 2024, global efforts mobilised nearly USD 2 trillion in green finance. However, Creon Butler from Chatham House noted that a significant portion of finance remains non-green. During the Sharjah Investment Forum 2025, experts discussed aligning global finance with sustainability. They highlighted the need for clearer taxonomies, smarter de-risking strategies, and better policy alignment to rebalance capital flows worldwide.

Butler emphasised three key actions: transparency, prudential regulation, and public international finance. He stated, "Disclosure only works if it is simple, comparable and honest about transition." He also stressed that climate risk should be treated like any other material risk by central banks and prudential authorities. Blended finance is important, but public international finance can attract private capital on a large scale.

Koffi Fabrice Djossou from the West African Development Bank highlighted the chronic financing shortage in West Africa. This limits innovation due to barriers in early-stage prototyping and scaling. He suggested innovative instruments like grants, venture capital, green bonds, and partnerships for risk-taking as essential solutions. Blended finance and public-private collaboration can transform prototypes into viable solutions.

Ahmad Aboud of Ghassan Aboud Group described ESG as both a funding advantage and market discipline. "Green funding reduces our borrowing cost," he said. When they banned plastic bags in their supermarkets in 2018, it not only saved costs but also earned customer loyalty. Robust governance is crucial as they transition to second-generation leadership.

Wolfgang Engel from the Institute of International Finance (IIF) stressed the importance of global coherence in financial systems. "We’re working with regulators to harmonise standards," he said. He advocated for comparable data and metrics to help carbon-intensive sectors decarbonise responsibly. Expanding beyond climate to include nature and biodiversity finance with emerging-market inclusivity is essential.

Youssef Salem from ADNOC Drilling called for a pragmatic ESG approach focused on relative improvement rather than exclusions. "The UAE’s energy story is broader than oil," he said. ESG must remain investable; otherwise, funds underperform and starve transitions of capital. The focus should be on who improves fastest within each sector.

Sustainable Capital in Emerging Markets

Salem argued for shared responsibility between developed and emerging markets to unlock sustainable capital. Developed markets should share the corrective burden if they want emerging markets to follow similar trajectories without historic emissions. This logic can help raise capital using the USD 30 billion already signalled.

Engel addressed perceived risks directly: "Phase out harmful subsidies quickly," he advised. Setting credible NDCs and providing stable regulations are vital steps forward. Many emerging economies have more flexibility to align monetary, prudential, and industrial policies effectively.

Investment Decisions and Regulatory Clarity

Djossou proposed embedding ESG in investment decisions while reforming institutions to widen access through digital-finance platforms tailored to SDG-aligned projects. This approach can attract more capital into these initiatives.

Aboud urged regulators and investors to collaborate for clarity and incentives: "Start with awareness: what ESG really means." Building platforms that translate effort into cheaper rates is essential while customising expectations by sector since a one-size-fits-all approach won’t work.

The Sharjah FDI Office (Invest in Sharjah), along with WAIPA, organised this two-day international forum alongside the World Investment Conference (WIC). It marks a significant milestone for Sharjah in shaping discussions around sustainable investment globally under the theme "Transforming Our World: Investing for a Resilient and Sustainable Future." Over 10,000 participants from 142 countries attended this event featuring 130 speakers across more than 160 sessions.

With inputs from WAM