Walking away from New York Climate Week, I was struck by a tension running through many conversations. The wider world appears to be moving backwards, yet investors, businesses and practitioners are still working with urgency to overcome the barriers preventing capital from reaching climate solutions.

Geopolitical instability is intensifying, public funding is becoming scarcer, and the effects of climate change are increasingly difficult to ignore. Severe floods and other climate impacts are disrupting communities, infrastructure and supply chains.

Against this backdrop, progress is neither automatic nor linear. But Climate Week showed that the determination to find workable solutions has not disappeared. Businesses are looking to protect vulnerable supply chains, investors are seeking credible opportunities with environmental and financial returns, and funders are identifying where their capital can address the bottlenecks that keep promising solutions from reaching scale.

Across discussions with investors, funders, corporates and development partners, one theme surfaced repeatedly: in emerging markets, the constraint is often not an absolute lack of capital. It is a shortage of sufficiently mature, investable opportunities at the scale and risk profile investors require.

From Innovation to Execution

Investors are looking for aggregated projects, more standardised structures, long-term agreements, clearer demand signals and better alignment between risk and return expectations. The challenge is to build pipelines that can absorb capital efficiently while recognising the realities of individual projects, markets and off-takers.

What felt different this year was the level of pragmatism. Conversations focused less on the next breakthrough in impact finance and more on execution: how to structure deals that work now, expand proven mechanisms such as guarantees and technical assistance, stack revenue streams, improve affordability and allocate risk in ways that attract commercial investors and off-takers.

Some institutional investors suggested reframing “blended finance” as “structured finance”, a familiar term in traditional finance. They argued that “blended” can inadvertently suggest concessionary returns or heightened risk. Whatever the terminology, the objective is the same: combine capital, risk-sharing tools and targeted support to move opportunities from early development towards commercial scale.

This helps reconcile an apparent contradiction. Substantial pools of commercial capital may be seeking investable opportunities, while the flexible, concessional and catalytic funding needed to develop those opportunities remains scarce. The gap is a mismatch between the capital available and the stage, scale and risk profile of the projects seeking it.

Catalytic capital is therefore essential. Its role is not to provide a permanent subsidy, but to fund early-stage development, reduce perceived risks, demonstrate viability and build the investable pipeline that larger investors need.

That role has become more urgent as official development assistance funding has contracted with extraordinary speed. Its withdrawal places greater pressure on philanthropic, concessional and private funders to support the technical assistance, project preparation and wider ecosystem required before commercial capital can be deployed.

Scarcer funding also makes fragmentation harder to justify. Partnerships and platforms can aggregate projects, capabilities and financing instruments into larger, more compelling opportunities. They can also reduce the burden on funders faced with dozens of separate propositions targeting similar outcomes.

Better Data, Better Decisions?

One particularly interesting debate concerned the role of better data. More granular information can expose climate, market or operating risks that conventional analysis has overlooked. If investors respond by applying additional risk premiums or excluding underserved markets, greater transparency could initially constrain rather than increase capital flows.

That possibility should not deter us from seeking better information. Investors often overestimate risk in markets or customer segments they do not know well, particularly where reliable data and relevant track records are limited. We have seen similar dynamics in microfinance and gender-lens investing.

More granular data can distinguish perceived risk from actual risk and show where risks are real. It allows commercial investors to price those risks more accurately and helps catalytic funders target guarantees, concessional capital and other mitigants where they are most needed. The challenge is to ensure that improved data enables smarter structuring rather than simply providing another reason not to invest.

The same principle applies to corporate climate and nature investment. Conversations with business leaders consistently returned to the need for a clear commercial case. Good intentions are not enough. Companies need to understand how an investment creates or protects value, strengthens supply-chain resilience, secures future supply or generates measurable returns.

That case is not always straightforward. Avoided losses are difficult to quantify, and a single intervention may address only one part of a company’s exposure. Yet first-mover advantages, secure access to future supply and potential exclusivity can carry strategic value that conventional return calculations understate.

Financing structures must also address the free-rider problem. A company may invest in a landscape or producer base only to see competitors benefit without sharing the cost. Collaboration can distribute that burden and make investment more commercially viable.

Turning Principles into Policy

At Palladium, we are working to put these principles into practice.

The Community Enterprise Catalyst, developed in partnership with The Nature Conservancy, supports conservation-aligned community enterprises by tackling interconnected constraints in finance, markets, capacity and policy. It also embeds community governance and measurable conservation commitments.

The Regenerative Access Facility with Laudes Foundation uses flexible catalytic instruments, including guarantees, recoverable and outcome-based grants, concessional finance and technical assistance. Its aim is to unlock existing pools of capital for regenerative landscapes while strengthening the institutions needed to deploy that capital.

Rebuild, the Africa Agri-SME Working Capital and Technical Assistance Facility, is being designed to combine working capital with technology-enabled, hands-on support. It would help underserved agricultural small and medium-sized enterprises improve their creditworthiness, strengthen sustainable supply chains and attract commercial finance.

These initiatives operate in different markets and use different instruments, but the underlying principle is consistent: use scarce catalytic funding to address the specific barriers keeping viable opportunities from reaching scale.

They also demonstrate why finance cannot be designed in isolation. Capital must be accompanied by market access, institutional capacity, technical support and structures that reflect how communities and businesses operate on the ground.

The Test is What Happens Next

As I reflect on Climate Week, I think less about the announcements and more about the follow-through. The week generates an extraordinary number of ideas, commitments and connections. The harder task begins after the conference badges have been put away.

By the next Climate Week, I would like to see more catalytic capital entering the market and more funders willing to take calculated risks to build the next generation of investable climate opportunities. I also want to see more organisations implementing projects, demonstrating results and creating the evidence needed to attract larger pools of capital.

This will require funders, investors, businesses and practitioners to move beyond parallel conversations. It means consolidating overlapping efforts, directing flexible funding towards genuine bottlenecks and structuring opportunities around the realities of markets rather than expecting projects to conform to a single financing model.

We do not need another year of everyone saying the same things. We need proof that partnerships formed in New York are translating into projects, and that those projects are delivering impact where it matters most.

Climate finance will not be judged by the conversations we have. It will be judged by what we build.