Davos 2026 aims to turn climate finance commitments into tangible impact for emerging markets

As global leaders convene in Davos for the World Economic Forum Annual Meeting, the conversation on climate finance is shifting from rhetoric to execution. The central question is no longer whether private capital must be mobilised for climate-driven growth in emerging markets and developing economies (EMDEs); it is how to unlock the trillions that will be required in the decade ahead.

The urgency is stark. 2025 ranked among the hottest years on record, and EMDEs, home to more than two-thirds of the world’s population and responsible for roughly 80% of projected energy demand growth, remain disproportionately exposed to climate risks. According to the World Economic Forum and KPMG’s joint work, EMDEs will need about $2.4 trillion in climate finance annually by 2030, including roughly $1 trillion from private external sources. Yet private flows to these countries remain tiny by comparison: in 2023 only about $36 billion in private climate finance reached EMDEs, according to KPMG’s analysis. Industry data shows adaptation finance has increased, but still falls far short of need; Climate Policy Initiative reports that adaptation finance across EMDEs totalled $48 billion in 2023, up 46% since 2018, with private adaptation finance rising but concentrated in a handful of countries.

The scale mismatch is clear: the world’s largest asset owners collectively manage more than $26 trillion in assets, but capital is not being channelled at scale into EMDE climate projects. The barriers are well known and recurring across recent examinations of the problem. Insufficient bankable project pipelines, weak local capital markets, opaque or inconsistent data, regulatory fragmentation and inadequate risk‑sharing mechanisms each blunt investor appetite. The World Economic Forum’s report “From Risk to Reward: Unlocking Private Capital for Climate and Growth” sets out practical solutions to overcome those barriers and assigns roles to public and private actors to bridge supply and demand for investable projects.

KPMG, which co-authored that analysis with the Forum, advocates a three‑point immediate agenda to catalyse investment. First, improve access to bankable project pipelines by aggregating projects, standardising documentation and using blended finance to move early-stage investments past proof of concept. Second, implement policy and regulatory reform that creates predictable frameworks and “demand signals” for emerging technologies. Third, raise the quality, comparability and granularity of climate and market data to reduce information asymmetries and permit better risk pricing. The firm says it is working with clients and regulators to shape frameworks, strengthen markets and de-risk investments, while the Forum’s roadmap sets out 16 stakeholder-specific actions across six priority areas.

Recent progress offers lessons but also warns against complacency. The Mutirão decision at COP30 in Belém, Brazil, committed to a two-year push to streamline access to climate funds and strengthen local participation, aiming to mobilise $1.3 trillion per year for EMDEs by 2035. That political momentum, combined with industry initiatives such as the Renewable Energy Action Pavilion’s November 2025 session on mobilising private capital in EMDEs, demonstrates rising willingness among some investors to finance adaptation and resilience as well as mitigation. Climate Policy Initiative’s EMDE spotlight shows private adaptation finance has grown, surpassing 7% of EMDE adaptation finance in 2023 compared with below 2% in 2018, but that increase was driven largely by a few markets: the UAE, Brazil and Indonesia together accounted for 82% of private EMDE adaptation finance in 2023, highlighting geographic concentration and persistent inequities.

Bridging the gap will require more than technical fixes. Industry and multilateral bodies repeatedly stress that unlocking private capital depends on bold partnerships across the capital stack: concessional finance and guarantees from development finance institutions and bilateral funds to absorb first losses; sovereign and sub‑sovereign reform to improve investability; and an expanded role for local institutional investors to recycle domestic savings into climate infrastructure. According to the World Economic Forum’s publication, improving matchmaking between project supply and investor demand, and standardising risk-sharing instruments, are essential steps if EMDEs are to attract the estimated $1 trillion per year of private external finance needed by 2030.

There are also hard equity questions about fairness and allocation. The Climate Policy Initiative finds that the top quintile of countries received more than 70% of all EMDE adaptation finance in 2023, underscoring the uneven distribution of flows and the need for targeted instruments that reach vulnerable and low‑capacity countries. Donors and international finance institutions face pressure to direct concessional capital where it will unlock the greatest mobilisation of private funds and where the social returns from adaptation are highest.

Davos 2026’s theme, “A Spirit of Dialogue,” is more than ceremonial: translating climate commitments into capital will demand sustained, cross‑sectoral engagement. The private sector says it can provide expertise and scale; development actors and governments must provide the enabling conditions and first‑loss buffers; and civil society should ensure that investments deliver equitable resilience and development outcomes. As KPMG and the World Economic Forum emphasise in their joint work, the technical playbook exists, but executing it at the speed and scale required will test political will, institutional capacity and investor patience.

If Davos produces fresh, actionable commitments to build bankable pipelines, standardise data and scale risk‑sharing mechanisms, it could accelerate the flow of private capital into EMDEs. Without those changes, the gap between ambition and delivery will widen, leaving the most climate‑vulnerable countries exposed and the global transition underfunded. The coming months, marked by Forum initiatives, COP follow‑through and public‑private dialogues, will be decisive in determining whether the mobilisation of private finance moves from aspiration to measurable impact.