Climate change has quickly become the most important challenge in our society. Nobody can exactly predict how climate change will affect the economy and the financial system worldwide. What is certain is that financial actors have a key role to play in supporting and fostering a shift towards a low-carbon economy. In this context, central banks could have a primary function in both, tackling climate-related risks and those related to the transition and, potentially, proactively redirecting resources towards green initiatives.

While the conflict in Ukraine is posing critical questions on the link between geopolitics and climate transition, climate investment appears to be a key, long-term tool for the future of the world economy. In this context, the $10.5 billion Climate Investment Funds (CIF), one of the world’s largest multilateral funds for climate action in developing countries, can play an important role in promoting long-term financing to lower the risk and cost of climate investments in developing and middle-income countries.