A report from Boston Consulting Group (BCG) and the Global Finance Markets Association (GFMA), Climate Finance Markets and the Real Economy, describes an annual financing need and opportunity of a significant US$3 trillion to $5 trillion for financial institutions in the coming years.

The BCG and GFMA report features proprietary analysis of the climate finance market and 10 economic sectors that account for 75 percent of global greenhouse gas (GHG) emissions. The report, commissioned and produced in collaboration with 13 global banking and capital markets firms, is based on interviews with more than 100 market participants from a range of corporate sectors, banks, asset owners and managers, multilateral organizations, financial regulators and other key market enablers.

Green financing opportunity

This global shift unlocks a substantial financing opportunity that is essential to meeting the commitments of the Paris Agreement on climate change.

The combined financing requirement for this global climate pathway is between $100 trillion and $150 trillion over the next three decades. Climate finance will need to scale across all asset classes, with financing raised across a range of instruments at an estimated range of 35 percent in equity, 44 percent in loans and 21 percent in bonds.

This will require rapid scale in asset classes such as equity, structured finance and bank intermediated lending, while at the same time connecting climate-related metrics and outcomes to key market activities such as derivatives and securities lending.

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