- The ever-changing climate financial landscape requires coordination and transparency to act uniformly.
- CPI's compass for climate finance reform lists milestones to change the way funds flow and their outcomes.
- Tracking and connecting progress with clear goals can help transition from words to results.
Climate financing is undergoing a fundamental shift. As multilateral institutions face rising debt, limited fiscal space and decentralized global coordination, countries are turning to regional and domestic solutions to bridge their climate financing gaps. This shift reflects the needs and opportunities of strong local capital markets and financial institutions in emerging economies that can expand resilient, impartial and effective climate finance architectures that are constructed to suit local environments.
To build a resilient and effective financial system, climate finance actors must adapt to ensure coordination, transparency and accountability. Institutional and financial mechanisms that determine how climate finance mobilizes, allocates and delivers must not only overcome climate finance deficits, but also overcome systemic disconnections. In an increasingly scattered space, the challenge will be to avoid duplicate efforts, coordinate sporadic plans, and even advances between institutions and countries.
We have global frameworks, national programs, commitments, alliances and financial innovations, but they often operate in silos. Without a common structure to align actors and efforts, we could undermine the division of efficiency and equity. Track what reforms are underway, the development of these reforms, which have stagnated and need to drive them. Increased visibility can enhance trust, stimulate implementation, and make it easier for civil society, developing countries and mind-conscious institutions to make the system accountable.
What and why the compass tracks
This is from CPI The compass of climate finance reform Come in. This interactive iterative tool brings structure, transparency and accountability to a fragmented landscape by developing a roadmap to identify key global moments such as the G20, the World Bank IMF meeting and key global moments that can drive how they measure progress (e.g., the World Bank-IMF meeting) and key global moments to measure progress. This exercise reduces reform fatigue and duplication by bringing global and national stakeholders around concrete, outcome-oriented priorities. Participants across the ecosystem need shared tools to be clear about what matters most, where reforms are lagging behind and how to better coordinate collective efforts to close systemic gaps.
As the official accountability tracker for the global climate finance framework, an agreement was reached on COP28With the Independent Senior Expert Group (IHLEG) comments on climate financing, the Compass Honitors 32 theme spans nine topics, from new collective quantitative climate finance goals to MDB reforms to MDB reforms.
For each topic, the compass defines clearly and viable medium-term goals (2030) and tracks our collective progress to them. To support the action, it also identifies key decision makers and support players, including national governments, financial institutions, alliances and charitable organizations, responsible for advancing each topic. It also highlights the relevant programs and resources for each topic to help stakeholders connect with ongoing efforts.
Importantly, the Compass outlines actionable milestones that align with key global events, For example, the G20, the United Nations Conference, the COP and the World Bank-IMF Conference, where financial priorities for climate and development are established.
For example, the Compass identified milestones for the upcoming 15 themes Development Conference Financing (FFD4) Late June. These range from expressing the ways in which new Nationally Determined Contributions (NDCs) can support development to how multilateral development banks can use first loss financing to work with other banks.
Such markers are designed to drive urgency and focus ahead of key decision-making points in 2025 and beyond. Progress on each reform theme is evaluated and updated regularly to reflect real-time developments in the international financial ecosystem.
By drawing the necessary actions, identifying responsible stakeholders and connecting reforms to key milestones, the Compass is more than just a progress tracker, a dynamic roadmap for alliance efforts, focusing on momentum and driving ambitions in a global climate financing environment.
The compass is not only another set of suggestions. This is a delivery tool. Designed in the public interest, the platform is a common reference point for negotiators, policy makers, MDB employees, civil society, etc. to coordinate the reform agenda and identify common priorities. As states and institutions shift focus from abstract commitments to real-world delivery and impact, the compass clarifies what needs to be done, where momentum exists, and where key gaps remain. It has begun to promote consistency among various actors, helping to translate complex reform goals into viable pathways.
This support is especially timely as the global financial system continues to develop. The shift to regionalism, local capital market development, and innovative use of hybrid finance reflects a broader hub of global finance, a competition that is a more localized, tailored solution to address domestic demand.
The compass was built at this moment. It helps to build a dialogue on reform, ensure accountability and bridge the gap between ambition and implementation. Whether you are a national government with global reform, MDB refines the consistency of strategic direction, or a civil society calling for action, the compass is interactive, accessible and useful. It enables users to track the progress of reforms, identify areas of leading and lagging, and ensures efforts are aligned with the principles of the global climate finance framework.
Use the compass to shape reform
Looking ahead, the compass can inform Baku-Berham's roadmap and beyond. It could support the Brazilian COP30 presidency to integrate key initiatives such as the COP28 Global Climate Finance Framework, the COP29 decision on the new collective quantitative targets of climate finance, and the IHLEG delivery status report on the global climate financing agenda. By emphasizing tangible, non-negotiational outcomes and avoiding duplication, the compass will help ensure efforts outside of the formal negotiation process meaningfully contribute to global ambitions. The pathways to reform the climate finance system will not be linear, but the compass points to a clear pathway to navigate it.
