Record climate finance should be a source of encouragement. According to the European Investment Bank, the world's multilateral development banks (MDBs) committed an unprecedented $162.5 billion in climate finance in 2024, with nearly $103 billion directed to developing countries. Yet, these headline grabbing figures mask growing doubts over whether such financial commitments can be sustained and even if the current global financial system can deliver a truly just transition.

The World Bank, the largest provider of MDB climate finance for developing countries, seems to have abandoned its target of allocating 45% of its annual lending to climate-related projects, arguing that it would instead prioritise broader development objectives. Since the World Bank accounts for nearly half of MDB climate finance for developing economies, this decision raises legitimate questions about whether recent momentum can be sustained.

Meanwhile, climate impacts continue to accelerate. Devastating floods, prolonged droughts,........

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