Climate finance: so what now for CFOs, IROs, and CSOs?

It’s easy to get caught up in narratives. Despite growing ‘green fatigue’ narratives in the West, institutional capital continues to chase credible climate-aligned assets—demand still far exceeds supply. For CFOs, IROs, and CSOs, the message is clear: credibility, not capital, is the scarce.

This is not to say that parameters for climate investing are not changing, they are. Expectations of what good looks like is changing and being currently actively discussed between companies and leading institutional investors.

The companies that integrate climate finance into corporate decision-making and engage investors with evidence will be best positioned to capture capital and build resilience.

Three signals from the market

September’s agenda of global events highlighted the complexity of climate finance. Conversations with corporates, institutional investors, trade associations, and NGOs revealed three clear signals:

1. Demand exceeds supply
   Investors continue to seek climate-aligned assets, but credible projects remain scarce. We have calculated the numbers to cross-check that empirical evidence. Based on data from the IIGCC and MSCI that we cross-checked with a recent JPM research[1], we have calculated that demand for climate-aligned corporate assets hovers around $22tn versus a supply of around $14tn.
2. The definition of “good” is evolving
   In the light of the ongoing recalibration, there is growing uncertainty around which certifications, ratings, or validation frameworks genuinely guide investment decisions. Investors increasingly favor clarity over ambition and are rewarding companies that can demonstrate measurable progress and clear capital allocation.
3. Disorientation across the climate finance ecosystem
   The prevailing narrative creates confusion/uncertainty around investor expectations. Both investors and corporates are reassessing and recalibrating ambitions and assumptions. Many are revisiting transition pathways, risk assessments, benchmarks and financing structures. There is a perceived lack of leadership as there is less public communication around climate ambition, strategy or plans.

Implications for corporate leaders

For CFOs

• Focus on capital allocation. Investors are increasingly moving away from Co2 targeting and increasingly scrutinise the real thing. How is capital allocation helping derisk the business.
• Engage investors directly. Engage personally with climate-dedicated investors and encourage C-Suite to have direct conversations. This should help clarify how the company can strategically leverage climate finance.
• Exchange best practice with peers. There is a need for CFOs to exchange best practice on climate finance. In that some of the peer networks are very valuable: Learn from peers via platforms such as the A4S CFO Network and the UN Global Compact CFO Coalition.
• Innovate within proven frameworks. Climate finance innovation is a proven lever for CFOs willing to tap into climate investors. In this environment innovation within frameworks that work best and have been time-tested are the easiest ones to pull-off both in public and private markets.

For IROs

• Master validation and assessment models. Develop fluency in how investors use climate assessments so that you can engage and make sure that the right questions are being tackled. It is not uncommon that some of these assessments fail to take into account the company-specific context. More on climate assessments on previous blogs: https://impactivise.com/navigating-sbti-and-alternative-climate-assessments/ and https://impactivise.com/mapping-corporate-climate-assessments/
• Organise targeted engagement. Plan targeted engagement with climate investors: Host dedicated climate-focused investor meetings in collaboration with CSOs.
• Create two-way dialogue. Ask questions but as well provide info and context to investors on the realities in the real economy. One area investors will increasingly  focus on is capital allocation. However, articulating what is possible and not possible (incl. dependencies) is very valuable for investors.

For CSOs

• Translate sustainability into finance. Express climate goals in terms of financial value creation, risk mitigation, and capital efficiency.
• Strengthen cross-functional alignment. Partner with CFOs and IROs to ensure consistent messaging and integrated decision-making at C-suite level.
• Prioritize value-linked projects: Focus on projects that deliver measurable environmental impact and quantifiable business outcomes—these are the stories investors reward.

The road ahead

The signal is clear: specific pools of capital is available for companies that can demonstrate climate alignment, but credibility is scarce. CFOs, IROs, and CSOs who can anticipate investor expectations, build robust transition strategies, and engage in transparent dialogue will not only secure financing but also strengthen competitive positioning.

CFOs, IROs, and CSOs sit at the center of this shift. By aligning financial and sustainability strategies, innovating within credible frameworks, and sustaining open investor dialogue, they can unlock diversified sources of capital and reinforce competitive advantage.

Register here to our live webinar for more insights – 30 October at 1pm CET