UK Launches Taskforce to Boost Investment in Emerging Markets and Tackle Climate Change
London, 16 May 2025 – In a bid to address global climate challenges and harness the economic potential of emerging markets, the UK government, alongside financial leaders, has launched the Emerging Markets and Developing Economies (EMDE) Investor Taskforce. This initiative aims to unlock private investment to support sustainable growth and tackle climate change risks in emerging economies. These regions are projected to contribute around 65% of global economic growth by 2035.
The Need for Increased Investment in Emerging Markets
To meet global climate goals, significant investments in sustainable development are needed across emerging markets and developing economies (EMDEs). These regions face critical climate-related risks, including extreme weather events such as heatwaves, floods, and droughts, which can have devastating consequences on both the environment and local economies.
The EMDE Investor Taskforce is designed to address this challenge by promoting private capital flows into these markets. Investments in both climate mitigation and adaptation are expected to generate returns of up to ten times the initial investment by 2100, according to estimates. Moreover, this initiative will not only help mitigate climate risks but also boost economic growth in the UK by enhancing its financial and professional services sectors, contributing £243 billion to the economy and £110 billion in tax revenues while safeguarding millions of jobs.
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Tackling the Finance Gap in Developing Economies
Currently, private capital flows into EMDEs fall far short of what is required to meet the Sustainable Development Goals (SDGs). In Africa, for example, only 18% of climate finance comes from private sources. By unlocking greater private investment in these regions, the Taskforce will help address the finance gap, enabling sustainable development while reducing climate-related risks such as famine, mass migration, and instability.
To overcome existing barriers to investment, the Taskforce will focus on innovative solutions, including capacity building and product development, to encourage the flow of private capital into sustainable projects across regions like Latin America, South and South East Asia, and Africa.
A Collaborative Public-Private Partnership
The EMDE Investor Taskforce brings together leaders from 15 prominent financial institutions, including insurers, asset managers, pension funds, and development finance institutions. It also draws on expertise from the UK government, particularly the Foreign, Commonwealth and Development Office (FCDO) and HM Treasury. This collaborative approach combines the strengths of both the public and private sectors, enabling stakeholders to drive meaningful change on a global scale.
Baroness Chapman, the UK Minister for International Development, emphasized the importance of the Taskforce in modernizing international development efforts. She noted that the initiative would not only support emerging economies but also provide substantial opportunities for UK investors, creating a win-win situation for both sides.
Emma Reynolds, Economic Secretary to the Treasury, reinforced this sentiment, highlighting the UK’s commitment to becoming a global hub for climate finance. This new initiative aligns with the government’s broader “Plan for Change,” aiming to stimulate jobs and investments while enhancing the UK’s competitive position in the global climate finance sector.
Industry Support and Commitment
The Taskforce’s co-chair, Hendrik du Toit, Founder and CEO of Ninety One, stressed that while risks exist in emerging markets, they are often overstated in comparison to past outcomes. To achieve a just and effective energy transition, he argued, it is crucial to increase private equity, project financing, and corporate capital in these regions. By accelerating investment in sustainable initiatives, the Taskforce will help both mitigate climate risks and promote inclusive economic growth worldwide.
The Institutional Investors Group on Climate Change (IIGCC) will serve as the Secretariat for the Taskforce, coordinating efforts across the public and private sectors to ensure the success of this ambitious initiative.
Strengthening the UK’s Leadership in Sustainable Finance
Building on its existing leadership in sustainable finance, the UK aims to strengthen its role as a global hub for climate-related investment. The EMDE Investor Taskforce will explore recommendations from the UK as a Climate Finance Hub report and develop technical workstreams to identify and address systemic barriers to investment in EMDEs.
By focusing on emerging markets, this initiative will unlock significant new opportunities for sustainable investments, benefitting both the UK’s financial sector and the economies in these regions.
Conclusion
The launch of the EMDE Investor Taskforce marks a pivotal moment in the global effort to address climate change and foster economic growth in emerging markets. By unlocking private capital and driving investment into sustainable projects, this taskforce will help reduce climate risks while generating economic opportunities for both developing nations and the UK. With strong collaboration between financial leaders and government officials, the initiative is set to play a crucial role in shaping the future of climate finance and sustainable development.
This article is originally published on: .iigcc.org
