London, 12 March 2026 – The EMDE Investor Taskforce today publishes “Baku to Belém and Beyond: Strengthening the UK Investment Landscape to Support Climate Transitions in EMDEs”, a landmark analysis demonstrating how modest adjustments in pension and insurance allocations could unlock tens of billions of pounds for climate solutions across emerging markets and developing economies (EMDEs).
The report finds that UK asset owners currently allocate just 4.2% of their portfolios to EMDEs, with an average 0.2% invested in private markets, despite these markets holding some of the world’s fastest-growing climate and sustainable investment opportunities.
Modelling shows that:
- Raising EMDE private market allocations from 0.2% to 2% could increase investment from £2bn to £30bn today.
- Directing 5-10% of future pension contributions could mobilise an additional £27-£53bn over the next decade.
- Increasing overall EMDE exposure to a modest 8% could unlock £119bn in climate‑relevant investment.
These findings underscore the scale of untapped potential within the UK’s £6.2 trillion pension and insurance markets, and the opportunity to direct long‑term capital towards the clean energy transition, resilient infrastructure, and nature‑based solutions across EMDEs.
A global imperative and a strategic UK opportunity
EMDEs will require $1.3 trillion per year in external climate finance by 2035 to deliver clean energy, adaptation, resilience, natural capital, and loss and damage priorities, as outlined in the Baku to Belém Roadmap. Mobilising long-term private capital is essential to avoiding a failed global transition and the systemic financial risks this would impose on UK portfolios.
These investments offer UK insurers and pension beneficiaries the opportunity to realise positive returns in high‑growth markets, diversify their exposures, and mitigate systemic risks associated with a failed global transition. They also strengthen the UK market and economy by positioning the UK as a leading centre for climate and sustainable finance.
The UK’s productive finance agenda, which encourages long‑term investment in UK infrastructure and high‑growth sectors, can be pursued alongside greater EMDE climate investment. With rising pension contributions, there is room to support both domestic growth and global climate goals.
This report shows how UK pension funds and insurers’ investments could unlock tens of billions for global climate action in developing economies, while strengthening our own financial resilience. It also shows how we in Government can help make this happen.
This is our new modern development approach in action, as the UK moves from a donor to an investor, using the best of our British expertise and leadership in green finance for the benefit of all.
UK savers stand to benefit from well‑structured, high‑growth opportunities in some of the world’s most dynamic markets. By working with industry and international partners, we can create the conditions for greater investment in EMDE climate solutions, supporting long‑term returns, financial stability and an ambitious global transition aligned with the Baku to Belém Roadmap.
This report shows that the constraint on EMDE climate finance is not capital, but alignment. UK asset owners currently allocate just over 4% to emerging and developing economies, with almost no exposure to the private markets where much of the climate opportunity sits. Yet relatively modest shifts in allocation could unlock tens of billions of pounds over the next decade. For long-term investors, this is about prudent diversification, accessing high-growth markets, and reducing the systemic risks that a failed transition would pose to UK portfolios. With the right policy signals and market structures, the UK can mobilise capital at scale — strengthening both global climate outcomes and its position as a leading centre for sustainable finance.
We believe that long‑term financial stability and global climate action are mutually reinforcing. Many emerging markets and developing economies find themselves on the frontline of climate risk but only see a fraction of the necessary investment. Allocating to EMDE transition offers diversified financial returns and improved outcomes for pension scheme members, both in terms of their pension at retirement and the world into which they retire. This report shows that a small nudge in allocations could unlock meaningful transition finance. Achieving this requires a concerted effort by market players to curate the opportunities. And by stepping up our allocations, we can protect our beneficiaries’ long‑term interests and help build a stronger, more resilient global economy.
Overcoming barriers
Asset owners cite governance constraints, fee caps, mixed policy signals, limited capacity, and perceived risk as key barriers. Clearer government framing, enhanced data on EMDE investments, and improved collaboration with MDBs and DFIs are highlighted as critical enablers.
ENDS
ABOUT
The Emerging Markets and Developing Economies (EMDE) Investor Taskforce is an industry-led initiative convened by the Minister of State for International Development and the Economic Secretary to the Treasury. The Taskforce brings together public and private sector stakeholders to develop practical solutions that will support institutional investors in pursuing investment opportunities in EMDEs to help deliver economic growth and tackle climate change.
Contact: media@EMDEInvestorTaskforce.org