FC4S 1.5°C PACT

Countries are preparing to submit third-generation Nationally Determined Contributions (NDCs) by 2025, but financing their implementation remains a significant challenge¹. Despite the need to urgently scale finance and align action to meet the requirements of the Paris Agreement, the financing gap is widening ranging between $2.5 trillion and $4 trillion annually², with private sector involvement crucial to closing it. Although financial institutions and corporations have net-zero commitments, many lack concrete transition plans, partly due to limitations in National Transition Plans and the lack of subsidiary-level planning from corporate headquarters. This creates a negative feedback loop, where reduced ambition in NDCs leads to inadequate policy implementation, resulting in misaligned corporate Transition Plans that decrease the effectiveness of climate action, ultimately feeding back into lower ambition in future NDCs and hindering progress on action and investment.

The Partnership for Action on Climate Transition (FC4S 1.5°C PACT) aims to foster stronger collaboration between the private sector and governments to inform the development of ambitious and 1.5°C-aligned Nationally Determined Contributions (NDCs) by 2025. This will be achieved by mobilizing the financial sector and supporting the creation of robust, detailed Transition Plans to inform the NDCs, as well as enhancing collaboration between the private sector and governments to ensure that Corporate Transition Plans contribute to NDC achievement.

The FC4S 1.5°C PACT programme strengthens the UNDP’s Climate Promise through its unique focus on Financial Centres, mobilizing private sector resources and expertise to support the development of more ambitious, 1.5-degree-aligned, and investable NDCs. The programme will encourage connectivity among financial centres to facilitate the exchange of best practice on sustainable finance policies, ultimately driving the global agenda for climate action. Launching at COP29 in Baku, FC4S 1.5°C PACT will leverage their extensive membership of 45 financial centres and engage across the public and private sector, with a focus on the financial sector, through four phases of work.

0. Kick-off and Call to Action

1. Review Current State

Current state 2025 NDCs
Current financing strategies for the transition
Transition plans at Financial Centre level

2. Assess Alignment and Gaps

Assess current targets’ alignment, and identify key gaps

3. Develop 1.5°C-Aligned Strategies

Support Financial Centres to develop robust Transition Plans and roadmaps
Support the development of a dashboard to monitor, track, and inform NDC financing

Ultimate Outcome: