Every year, climate finance grows. But not where it’s needed most.

In 2022 alone, global climate finance hit a record $1.3 trillion. That sounds like progress — until you ask a woman farmer in drought-hit Malawi, a coastal youth leader in the Philippines, or an Indigenous health worker in Brazil if they’ve seen any of that money. Most haven’t.

Less than 3% of these funds make their way to communities on the frontlines of climate change — those who contribute the least to the crisis but bear its deepest scars. Women, youth, and historically excluded groups aren’t just underserved; they’re systemically overlooked. In fact, between 2019 and 2020, only 2% of climate finance flows were gender-responsive, despite clear evidence that women in developing countries are more likely to face food insecurity, water burdens, and health risks during climate shocks.

This isn’t just a moral failing. It’s a strategic one. And the cost is global resilience.

The financing gap no one talks about

Climate finance was never meant to be top-down. Yet decades into global climate negotiations, the majority of resources still flow through international intermediaries, rarely reaching the grassroots. The International Rescue Committee notes that, while 17 conflict-affected countries account for 71% of global humanitarian needs, they receive only a fraction of climate finance — even though they contribute just 3.5% of global emissions.

What’s worse: many of the financial tools we use today weren’t built for equity. They reward scale, not social impact. Efficiency, not justice.

But what if finance was designed differently?

Imagine a world where climate finance didn’t just flow — but it flowed fairly. Where capital didn’t bypass communities but was built from them. That’s where gender-responsive budgeting comes in. More than a technical fix, it’s a strategic shift: one that embeds equity directly into how governments and donors plan and spend money. According to the United Nations Development Programme, gender-responsive budgeting helps allocate resources to the people and priorities that need them most — especially in health, agriculture, and disaster risk. The Commonwealth Secretariat further emphasizes that gender-responsive climate finance is essential for effective adaptation and resilience yet remains severely underfunded.

Climate finance was never meant to be top-down.

Then there’s blended finance — a mix of public, private, and philanthropic capital used to de-risk investments in high-need, low-trust environments. The World Economic Forum calls it “essential” for unlocking climate solutions in places where traditional finance won’t go. The Climate Finance Lab highlights that, while blended finance and innovation have catalyzed promising models, scaling these solutions requires overcoming regulatory barriers and building local capacity.

The Bridgetown wake-up call

One country is already rewriting the rules. Barbados’s Bridgetown Initiative is a bold call to redesign global finance so that small island and climate-vulnerable states aren’t left behind. It pushes for debt-for-climate swaps, restructured concessional financing, and emergency liquidity that empowers countries — not burdens them. It’s more than policy. It’s proof that frontline leadership can shape the future of finance — if we listen. However, ongoing debates about implementation and scalability show that global reform must be matched by practical support for local actors.

Who holds the power to fund the future?

Right now, too many decisions about climate finance are made without the people it claims to serve. But there’s another way.

Mechanisms like the Adaptation Fund’s Direct Access allow developing countries to bypass intermediaries and implement solutions tailored to their realities. These tools prove that when local leaders control the purse strings, climate action gets smarter, faster, and more sustainable. For example, anticipatory cash programs in conflict-affected regions like Nigeria have demonstrated that direct, timely finance can build resilience and reduce hunger.

And investors? They’re not off the hook. In a world racing to meet the Sustainable Development Goals — particularly SDG 13 (Climate Action), SDG 5 (Gender Equality), and SDG 10 (Reduced Inequalities) — impact investing is no longer a niche. It’s a necessity. Recent research shows that while climate impact investing can reduce emissions by raising the cost of capital for polluters, its effectiveness is limited by the current scale of such investments. Capital should do more than grow. It should transform.

Co-creating resilience

To be clear, this is not about charity. It’s about co-creation. It’s about seeing women, youth, and marginalized communities not as beneficiaries but as builders. As fund designers. As co-investors in the future.

It’s time to shift from volume-driven finance to value-driven impact. To recognize that resilience doesn’t trickle down — it rises from places that are too often invisible on the balance sheet.

The question is no longer, “Can we afford to fund them?” The real question is, “Can we afford not to?”