IPCC Chair Skea Urges Realignment of Capital Flows for Clean Energy and Nature

London – At the World Climate Investment Summit, IPCC Chair Jim Skea urged governments and the finance industry to reliably direct capital flows toward the transition to a low-carbon, climate-resilient economy. Against a backdrop of higher interest rates, geopolitical tensions and visible physical climate risks, he said clear policy signals, targeted risk-sharing and stronger international cooperation are needed.

A new investment reality

Skea described a changed starting point for investors: macroeconomic pressures and political uncertainty are weighing more heavily on capital decisions, while droughts, heatwaves, floods and storms are directly affecting returns and valuations. Securing investment in mitigation and adaptation is crucial so that economic headwinds do not stall the transition.

Policy certainty as an investment engine

Skea stressed the importance of stable frameworks: predictable climate targets, credible emission-reduction pathways and reliable permitting processes. Tools that promote clean technologies and rapidly phase out fossil-fuel subsidies reduce transition risks and prevent lock-in to carbon-intensive infrastructure.

Public capital as a lever

Public funds should mobilize private capital — for example through subsidy programs, loan guarantees and targeted equity participation, particularly in higher-risk regions and sectors. Multilateral development banks and national financial institutions, Skea said, have a special responsibility to support developing countries in expanding clean energy and resilience measures. Scalable blended finance is central: public money absorbs initial losses or reduces risks so private investors follow. Standardized contract templates and transparent risk assessments should increase the efficiency and attractiveness of such structures.

Nature-based solutions and adaptation

Capital must flow not only into renewables but also into conservation, reforestation and sustainable land use. Such measures reduce emissions and bolster livelihoods. Skea highlighted that adaptation investments remain underfunded — especially in poorer countries. Appropriate financial products and grants are needed to implement projects and protect vulnerable communities.

Risks, returns and social justice

The transition must be socially just: workers in affected industries need prospects and retraining opportunities, and impacted regions require structural support. At the same time, Skea warned of “stranded assets” in fossil infrastructure, whose value can collapse rapidly with policy or technological shifts. Early course correction reduces losses and enables an orderly redeployment of capital.

Concrete steps for investors

– Align portfolios with Paris-compatible scenarios – Strengthen disclosure of climate-related risks – Conduct stress tests for physical and transition risks – Systematically screen investments for nature and social criteria – Expand data and standard cooperation among states, financial institutions and experts

Call for speed and cooperation

Skea warned that delay raises costs and makes a fair transition harder. Political clarity, international cooperation and smart collaboration between public and private capital are vital to permanently realign capital flows toward clean energy, nature and adaptation.