Masterclass in Transition Finance

By the end of this Masterclass participants will be able to:

• Understand the strategic role of financial institutions in scaling climate transition finance.
• Learn about the instruments, metrics, and tools financial institutions deploy to foster a credible transition.
• Gain insights into the regulatory landscape shaping the involvement of financial institutions in transition finance.
• Analyse real-world challenges and innovative solutions from financial institutions driving the transition to a low-carbon economy.

Session one

This session will provide a comprehensive understanding of the principles, scope, and importance of transition finance, setting the stage for more detailed discussions in Session 2.

Focus Areas:

• Introduction to Transition Finance
  • Definitions and goals
  • Scope and credibility
  • Principles and taxonomies
• Sustainability-linked Finance/Instruments
  • Asset classes
  • Principles and frameworks
  • Examples: Transition bonds and SLBs
• Transition Plans: Disclosure and Credibility
  • Need for regulation
  • Transition Plan Taskforce
  • Preparation and assessment

Session two

This session will explore the instruments, mechanisms, and policies that enable scaling transition finance, focusing on practical applications and regional/national strategies.

Focus Areas:

• Sector-Specific Pathways:
  • Decarbonisation strategies for energy, steel, and cement sectors and the role of financial institutions in financing these transitions​.
  • How sectoral decarbonization pathways guide financial decisions​
  • Challenges in designing credible transition plans for these sectors​
• Instruments and Mechanisms:
  • Market landscape of transition bonds, sustainability-linked bonds, and blended finance​.
  • Examples of successful use cases in developed and emerging markets.
• Policy Archetypes Driving Transition Finance:
  • Industrial Policies: Inflation Reduction Act (IRA), REPowerEU, Japan’s Transition Finance Framework​.
  • Taxonomies: European Union and ASEAN taxonomies, their structure and relevance​.
• Barriers to Scaling Transition Finance
  • Climate transition finance metrics.
  • Policy inconsistencies, lack of private sector engagement, and limitations in emerging markets
• Business Case Study:
  • Analysing the scaling of advanced transition technologies and the integration of financial instruments and policy incentives to support sector-wide decarbonsation.

Session three

This panel session with industry experts will explore:

The Role of Financial Institutions:

• Driving innovation in climate finance products and scaling impact​.
• Balancing risk and return in funding hard-to-abate sectors​.

Global and Regional Challenges:

• Financial institutions' role in addressing financing gaps in emerging markets and developing economies

Credibility and Integrity:

• How financial institutions can combat greenwashing and ensure robust transition planning​.

Future Directions:

• Emerging financial instruments and regulatory trends shaping the next decade of transition finance​.