Partnership for Action on Climate Transition: Modeling Private Investment Needs for NDC Success

This Capstone project, conducted with the UNDP Sustainable Finance Hub, evaluates the alignment of financial institutions’ climate finance activities with Nationally Determined Contributions (NDCs) in Mexico and Singapore. Despite growing global climate finance flows, significant gaps remain in the scale and alignment of private investments required to achieve NDC targets.

The project employed a mixed-methods approach. Qualitatively, a binary analysis of institutional disclosures and an evaluation using the Climate Policy Initiative’s Net Zero Finance Tracker are utilized to assess alignment across three dimensions: targets, implementation, and impact. Additionally, interviews with senior ESG officers and policy stakeholders provide contextual insights, highlighting the barriers and opportunities in localizing global climate commitments. Quantitatively, the team developed an illustrative framework to estimate domestic financing gaps in meeting NDC targets. Applied to country-specific examples, the framework reveals wide variation in climate financing performance and identifies existing discrepancies between required financing and actual institutional commitments. The framework also served as a replicable tool to support future assessments and inform targeted interventions.

The project delivered actionable insights and recommendations for financial institutions and policymakers, emphasizing the importance of localized disclosures, sector-specific decarbonization strategies, SME climate disclosure capacity, and regulatory incentives. It also provides critical evidence for UNDP’s engagement with Financial Centres for Sustainability (FC4S) members, supporting the development of country-specific NDC alignment strategies and motivating greater financial sector participation in achieving national climate objectives.