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New Rockefeller Foundation and BCG Research Reveals Size of Gap in Climate Finance

New comprehensive report and dataset to help hold world leaders at COP27 accountable in their climate commitments

NEW YORK | November 4, 2022 – In the lead-up to the 27th United Nations Climate Change Conference (COP27), The Rockefeller Foundation released an analysis and aggregation of climate finance globally, revealing a formidable gap. The new report, What Gets Measured Gets Financed: Climate Finance Funding Flows and Opportunities, developed in coordination with Boston Consulting Group (BCG), provides a deeper understanding of how this data is currently defined, tracked, and disclosed and how to make it more consistent. In addition, by making the report’s data set open to the public, the Foundation and BCG will help promote accountability of which climate mitigation, adaptation, and resilience solutions are being financed and where funding is needed most.

“When we look back on climate change in 50 years, we will see either that climate finance proved essential to averting a catastrophe or that it was the missing ingredient on the way to disaster,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation. “With this report, the world finally has the data on what’s needed and where—and far fewer excuses for delay at COP27, the G20, and beyond.”

Key Findings:

  • Only about 16% of climate finance needs are currently being met. To achieve net zero, public and private sector entities across the globe will need approximately $3.8 trillion in annual investment flows through 2025. But only a fraction of this capital is currently being deployed. Even when viewed with a wider lens that considers funding such as transition finance, expected needs still outweigh flows by 66%.
  • Emerging technologies and markets are experiencing the most severe financing shortfalls. Critical decarbonization levers such as carbon capture and sequestration and fuel cell technology are significantly underfunded, with only approximately 5% of needs met, putting hard-to-abate sectors particularly at risk. Likewise, higher project and sovereign risks in developing economies have resulted in serious mitigation and adaptation funding gaps.
  • Around $3.4 trillion in mitigation finance is needed annually across sectors in 2020–2025, and if investment flows don’t change from today’s levels, the resulting gap will extend to nearly all sectors and subsectors, though to varying degrees. For example, investment in electric vehicles is set to accelerate considerably, meeting roughly 65% of need by 2030. But investment in carbon capture, utilization, and storage under the International Energy Agency’s Announced Pledges Scenario is on track to address only 10% of expected need by the end of the decade.
  • Excluding China from the computation, emerging markets and developing economies will require about $1 trillion in climate finance per year, or about one-third of global need—but data suggests that they are currently receiving only 27% of the necessary flows. Mitigation finance today is concentrated in China, Western Europe, and North America, which accounted for about 80% of investment flows in 2020.
  • Developing countries in Africa and the Middle East have the largest adaptation and resilience (A&R) financing gap as a percentage of GDP (2.05 to 2.2%) and the largest unmet needs. Developing countries need an estimated $330 billion to $430 billion of public sector A&R investment. To quantify the order of magnitude by which public sector A&R needs are underestimated, the report pulled data from the 57 developing countries that submitted comprehensive adaptation finance estimates and used that information to extrapolate numbers for the remaining 125 developing countries.
  • Improved data can drive climate-finance. Because participants differ in their classification of proceeds and end uses, it is difficult to size how much capital is going toward mitigation and adaptation initiatives, as well as to gauge the relative effectiveness of different decarbonization interventions and to assess where investment is most urgent.

“We all know that more finance is needed for climate change, but until this report, there was no real way to compare how the many different types of financial flows were adding up relative to needs, or to determine where and into which sectors investment is most urgent,” said Veronica Chau, Partner & Director, Sustainable Investing & Social Impact at BCG. “This is a crucial decade for climate-finance actors to go from pledging support for climate initiatives to deploying it. But the absence of clear and reliable data has been a major roadblock.”

The report also provides guidance on how to overcome the finance gap. It recommends that all key actors in the climate finance ecosystem play bigger, more active roles. Governments will need to trace capital-finance needs, flows, and outcomes for necessary tax incentives and subsidies. Corporations will need to disaggregate climate-finance initiatives. Investors seeking market returns will need to make the end use of their proceeds more transparent. And innovative partnerships between these types of funders will be key to addressing financing gaps effectively.

“The fact of the matter is that while OECD countries have pledged $100 billion per year to emerging markets and developing countries, they put up less than $80 billion in 2019—and only 25% of that amount went toward A&R, despite this area being the highest need category,” said Maria Kozloski, Senior Vice President of Innovative Finance at The Rockefeller Foundation. “As we head into COP27, where climate adaptation and resilience are key focus areas, leaders must make all efforts to bridge the funding gap.”

The Rockefeller Foundation and BCG aggregated data from across the climate finance arena, examined the methodologies of leading publications, and triangulated missing information. This was necessary because climate finance data has long suffered from varying definitions, reporting horizons, and data collection practices, making it difficult for funders to create the business case and fact base to satisfy their fiduciary responsibilities. The report provides industry practitioners with a comprehensive view of how climate finance needs are evolving relative to flows and identifies where the most critical gaps in climate finance data reporting are and where the need for taxonomic standards is most urgent.

About The Rockefeller Foundation

The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We work to promote the well-being of humanity and make opportunity universal and sustainable. Our focus is on scaling renewable energy for all, stimulating economic mobility, and ensuring equitable access to health care and nutritious food. For more information, sign up for our newsletter at and follow us on Twitter @RockefellerFdn.

About Boston Consulting Group

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

Media Contacts

Ashley Chang
The Rockefeller Foundation
+1 212-852-0000

Eric Gregoire
Boston Consulting Group
+1 617-850-3783

  • Report

    What Gets Measured Gets Financed: Climate Finance Funding Flows and Opportunities

    Climate change poses a singular threat to humanity, and to The Rockefeller Foundation’s 109-year mission of promoting its well-being throughout the world. To meet our mission today, we must directly confront climate change. One of the biggest obstacles to achieving net zero emissions globally by 2050 is the lack of financing from public and private […]
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