Over the last 50 years, the occurrence of extreme weather events has increased 5x due to global warming and climate change. According to Munich Re, economic loss from natural and man-made catastrophes in 2024 reached $460 billion, replacing 2023 as the hottest year to date. Scaling up climate-aligned finance and investment is critical to tackle global emissions, build climate resilience, and keep the 1.5°C temperature goal within reach. To achieve these objectives, an annual investment of at least USD 5 trillion will be required by 2030 – or a 20% year-on-year increase.
Banks and development finance institutions play a critical role in this context, channelling capital towards sustainable outcomes. Through their lending and investment activities, banks influence market behaviour and set standards. This is not only a regulatory requirement but a strategic imperative, as climate-related risks and opportunities become central to financial institutions and a key component of their decision-making.
However, their ability to deploy green finance at scale depends on their capacity to originate, structure, and deploy green finance in a way that is both technically sound and commercially viable. Multilateral Development Banks (MDBs) have developed a joint framework for assessing and reporting on finance directed towards climate-related activities, aiming at ensuring consistency and transparency in how MDBs track and report their climate finance contributions, in line with the goals of the Paris Agreement.
Despite growing momentum and interest, banks, and in particular medium-size financial institutions, face persistent barriers:
The lack of harmonised definitions and methodologies continues to be one of the most significant barriers to scaling green finance. Institutions need clarity on what qualifies as green, but also simple tools to operationalise that understanding across the organisation, from the sustainability teams at HQ to the smallest branch.
Lucas Novelle AraújoDirector, PwC LuxembourgBy combining financial expertise, practical know-how, and institutional capacity building, financial institutions can move from ambition to execution, enabling green finance at scale with precision, simplicity and impact.
Our role is to translate complex regulatory and technical requirements into practical, scalable solutions. By equipping institutions with the right tools and capabilities, we enable them to lead – not follow – in the transition to a sustainable economy and benefit from the market opportunities arising from a climate alignment.
Christophe MazandManaging Director, PwC LuxembourgPhilippe Pierre
Advisory Partner, Government & Public Services Leader, EU institutions Leader, PwC Luxembourg
Tel: +352 49 48 48 4313
Christophe Mazand
Advisory Managing Director, Government & Public Services, PwC Luxembourg
Tel: +352 621 334 179
Lucas Novelle Araújo
Advisory Director, Government & Public Services, PwC Luxembourg
Tel: +352 621 333 651