From New York to Belém: Private capital in the global net zero transition

As world leaders, investors and civil society gather for Climate Week NYC, one message should be clear: despite political and economic headwinds, many countries are pressing ahead with their net zero transitions and attracting private capital at record levels. Those that stay the course on the transition will attract investment and strengthen their economies; those that stall risk being left behind.

Much of the conversation in New York will focus on the role of private capital in driving this transition. Before the week begins, it’s worth taking stock of where investor action on climate stands: the progress being made by investors, the decisive importance of emerging markets and the policies needed to unlock private finance at the scale economies need. These are some of the themes that will shape not just Climate Week, but also PRI in Person in São Paulo and COP30 in Belém.

Investors are backing an unstoppable transition

As we look back on 2024 as the hottest year on record, institutional investors around the globe continue to focus on climate change as a priority issue. Provisional data from PRI’s 2025 reporting, based on responses from 2,779 signatories, shows that a substantial majority of investors (80.4%) now have processes in place to identify and assess climate risks. Through Climate Action 100+, investors are also demonstrating the power of stewardship, with 67% of focus companies reducing their emissions intensity over the past three years.

A new survey shows that seven in 10 institutional investors now regard the transition to net zero as unstoppable. This conviction is borne out in the data. Global investment in the energy transition surged to $2.1 trillion in 2024, up 11% on the previous year and a new record, with the overall energy supply investment ratio tipping in favour of clean energy. Major pension funds and insurers are expanding investments in companies, products and technologies that decarbonise high-emitting sectors, improve battery storage and modernise grids, positioning their portfolios to deliver long-term returns for beneficiaries.

We are also seeing signs of policy instability affecting investment flows. Renewable energy investment in the United States fell 36% between the second half of 2024 and first half of 2025, whereas Europe saw investment rise by 63% in the same time period. In a dynamic environment, capital is being reallocated to where there is higher certainty on the transition.

Emerging markets are decisive for progress on the transition

Globally, the hard truth is that the battle for net zero will be won or lost in emerging markets and developing economies (EMDEs). The demographics and future emission pathways of emerging economies affect us all. While capital flows into clean energy are accelerating in advanced economies, they remain woefully insufficient in EMDEs. China is now the site of nearly one third of clean energy investment globally, driving cost reductions across the world in key technologies including wind, solar and batteries. But outside China, EMDEs attracted only around $270 billion in clean energy investment in 2024 – less than 15% of the global total.

Encouragingly, investors are ready to do more. Promising initiatives are gaining traction, such as the SCALED platform launched earlier this year with backing from leading insurers and asset managers. Recent years have seen the emergence of new financial structuring approaches including transition-linked sovereign issuance and blended finance models, but these remain modest compared to the scale required. What is new – and vital – is that governments and international institutions are beginning to create mechanisms that ease structural barriers and distribute risks, enabling private capital to flow where it is needed.

Brazil exemplifies both the complexity and the potential. As an oil-producing nation, a biodiversity superpower and a critical player in global supply chains, Brazil’s trajectory will reverberate far beyond its borders. With COP30 taking place in Belém, Brazil has a unique opportunity to lead, demonstrating that an emerging economy can simultaneously strengthen competitiveness, protect nature and accelerate the shift to clean energy.

Policy makers have a generational opportunity to scale transition investments

Responsible investors understand that policy makers will play a decisive role in unlocking capital for the transition at scale. Through a series of recent PRI roundtables, investors have identified several measures that policy makers can take that could reshape how investors assess investment opportunities in EMDEs and allocate capital to their transitions:

• Adopt a whole of government approach to the transition. In all countries, coordinated action across finance and sectoral ministries and regulators can provide stability and clarity on the transition. The next round of Nationally Determined Contributions (NDCs) – national climate targets and plans – should align with industrial policy and financial regulation, connecting investment with real economy transitions and enhancing markets for climate solutions. Stronger pipelines of projects aligned with these national priorities are critical.
• Improve the strategic use of concessional capital. Recognising where blended finance is best deployed to fill critical gaps – or where public or private finance is more efficient – is key to crowding in private investment. Governments and multilateral development banks (MDBs) can adopt structures that help to standardise and scale concessional and blended finance – including guarantees and first-loss capital – to make transition investments bankable.
• Strengthening domestic markets can help attract the private capital. Deep, predictable local markets are important. Progress on the fundamentals – property rights, capital controls and financial regulation – can help governments attract both domestic and international capital and build confidence.

Climate Week NYC is an opportunity for investors, policy makers and other stakeholders to build momentum on the road to COP30. Investors are ready to act, but the next phase of the transition depends on governments working closely with them to deliver policy reforms that can turn billions into trillions.

After New York our focus shifts to São Paulo, where PRI in Person will form part of the COP30 Business and Finance Forum. It will be a crucial moment for investors, corporates and policy makers to come together and shape solutions – ensuring the investor voice is heard, as world leaders gather in Belém. We look forward to seeing many of you there.