The world is navigating a turbulent phase marked by environmental crises, economic volatility, and growing geopolitical rifts. As climate change intensifies and inequality widens, sustainable finance has become a critical lever for driving transformative change
The world is at a critical juncture, facing unprecedented environmental, social, and economic challenges. Climate change, biodiversity loss, and social inequality are just a few of the pressing issues that require immediate attention. Sustainable finance has emerged as a vital tool to address these challenges.
It refers to investment decisions that consider environmental, social, and governance (ESG) factors, aiming to achieve financial returns alongside positive societal impacts. It encompasses a broad range of financial activities that support sustainable development — such as investments in renewable energy, energy efficiency, sustainable agriculture, and green infrastructure.
Partnerships play a crucial role in accelerating sustainable finance. The Paris Agreement on climate change and the Agenda 2030 on Sustainable Development Goals (SDGs), both adopted in 2015, are the two most important global partnerships, although also very fragile, that still hold the hopes of a peaceful, equitable, and prosperous world alive. Currently, anxiety over an impending tariff war, regional conflicts and instability, and the weakening of multilateral platforms are gripping the world.
The momentum that started in 2015 for a climate-resilient, low-carbon, and sustainable future today faces hiccups, not only because of an unpredictable political climate but also due to predictable challenges in mobilising finance for sustainability. As a result, governments and other stakeholders are considering adopting a wait-and-watch approach.
The less-than-expected commitment to climate finance from developed countries at the 29th climate summit in Baku, Azerbaijan, and the announcement by the USA to withdraw from the Paris Agreement and other global platforms seem to have created a feeling of a standstill. However, we must remind ourselves that the sustainability agenda is not facing these dismays and pullbacks for the first time.
In the last decade, despite frequent interruptions, the leadership of sub-national governments, non-state actors, and meaningful partnerships between countries and diverse stakeholders have not only kept the agenda of sustainability going but have also created a glimmer of hope that a sustainable future is a real possibility.
Given that the role of partnerships in mobilising sustainable finance is more critical than ever under current circumstances, there are at least three important global events in the year 2025 that offer opportunities for different stakeholders to come together and dispel the atmosphere of anxiety before the global political community meets in Belém, Brazil, for COP30.
The G20 Summit
The G20 is perhaps the most influential political partnership shaping the future direction of the global economy. After Indonesia, India, and Brazil, South Africa is the fourth developing country presiding over the G20 deliberations. For the African Union, which became part of the G20 under India’s presidency, this would be an important summit. The agenda of climate resilience and sustainable development, and the importance of scaled-up sustainability finance are unambiguous for Africa. Many African countries depend on bilateral and multilateral aid as they endure the pressures of high levels of debt-to-GDP ratio. It is an opportunity for the African nation to lead G20 as an important political partnership for sustainable finance.
The continuity of the G20 agenda in terms of MDB reforms, and inclusive just energy transition offers a real opportunity for South Africa to negotiate a bargain that can alleviate the environment of uncertainty over the future of sustainability.
The UN Climate Week NYC
Over the years, the UN Climate Week, held in New York City just before the annual UN Climate Summit, has become an important platform for governments, multilateral bodies, non-state actors, and the private sector to announce multi-stakeholder partnerships and initiatives for promoting climate action and sustainability. Increasingly, the announcements also address the finance question — either through direct commitments or pledges to adopt practices that enable the scaling-up of sustainable finance. Moreover, it would be a critical agenda for the UN Secretary-General to convince countries and other major actors to uphold the Pact for Future they had agreed upon at last year’s Summit for Future. It may turn out to be a historical moment that would define the course of multilateralism as a form of political partnership for a just and sustainable future.
The Third World Perspective
The World Sustainable Development Summit (WSDS) held in New Delhi is the largest multi-stakeholder annual summit organised in a developing country. The WSDS is a platform to reflect on global developments, particularly the outcomes of the UN Climate Summits from a developing country perspective. While the G20 Summit and the UN Climate Week NYC will take place towards the end of 2025, WSDS will take place in March 2025 amidst the volatile political climate.
Hence, it is an important opportunity for the committed stakeholders to send strong signals in favour of sustainability, to prepare the ground for further work on partnerships during the year. Incidentally, the theme for WSDS 2025 is ‘Partnerships for Accelerating Sustainable Development and Climate Solutions.’ Scaling up sustainable finance would require a climate of stability and predictability.
Hence, governments, non-state actors, and private sector stakeholders need to utilise these events to reaffirm their commitment to sustainable finance, strengthen partnerships, and mobilise resources to support a climate-resilient, low-carbon, and sustainable future.
(The writer is Associate Director, Earth Science and Climate Change Division, The Energy and Resources Institute (TERI). Views are personal)
