Africa needs more climate finance — and greater accountability for the capital already at work. Just Share executive director Nicole Martens argues that banks, investors and pension funds must turn climate commitments into measurable changes in what they finance, backed by stronger regulation and scrutiny.
Africa’s climate transition is an enormous investment opportunity. Renewable energy, modern electricity grids, resilient infrastructure and green industries can create jobs, strengthen energy security and support industrialisation. Realising this opportunity will require substantial capital. But while we debate how to mobilise more money for the transition, we are paying too little attention to what the money we already have is financing.
Africa needs more climate finance. It also needs that finance to work harder for the transition.
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The usual response to the climate finance gap is to call for more public and private investment, better access to international finance and a stronger pipeline of bankable projects. These are legitimate priorities. But they risk obscuring a more fundamental problem: the institutions that already control vast pools of capital are not being held sufficiently accountable for how they allocate it.
Banks lend to businesses and projects. Asset managers invest on behalf of their clients. Pension funds and other asset owners decide how their beneficiaries’ savings should be invested and what they expect from the managers they appoint. Together, these institutions shape which industries grow, which infrastructure gets built and which economic activities retain access to finance.
All speak increasingly confidently about supporting the climate transition. Yet their financing decisions often tell a different story.
Just Share’s 2026 How cool is your bank? assessment of South Africa’s five largest banks found that none scored above 59% against our framework of 26 indicators and 81 sub-indicators. The assessment examines banks’ lending, climate commitments, governance and strategy. The research finds that while renewable energy financing is growing, fossil fuel exposure is not yet on a sustained downward trajectory. Only two of the five banks reduced their absolute exposure, while the others either maintained or increased it. For a sector that has committed to net zero, this is not the pace (and where fossil fuel exposure has increased, also not the direction) of change that an orderly transition requires.
The findings raise a fundamental question: how meaningful are commitments to finance the transition if substantial financing continues to support the activities driving climate change?
This is not an argument against financing renewable energy. It is an argument against treating investment in renewables as sufficient evidence of progress while ignoring what else an institution finances.
The same scrutiny should apply to asset managers whose portfolios include companies without credible transition plans, and pension funds that endorse responsible investment but fail to use their influence as shareholders to demand change.
Why does this gap persist? Some institutions point to weak regulation and argue that they cannot move ahead of the market. Others say their clients have not demanded more ambitious action, or that stronger climate commitments would put them at a competitive disadvantage. These concerns may describe real constraints, but they cannot absolve financial institutions of responsibility for their decisions. When every institution waits for someone else to move first, business as usual wins.
The answer is not simply to ask financial institutions to make more ambitious commitments. It is to make them accountable for delivering on those they already make.
First, regulators must raise the floor. South Africa has taken steps in this direction through guidance on climate-related risks and disclosures for financial institutions. The next challenge is to strengthen transparency and comparability, including reporting on financed emissions – the greenhouse gas emissions associated with the companies and projects that institutions lend to or invest in. Regulators should also scrutinise claims against actual financing practices, so that commitments to climate action cannot obscure continued support for activities that undermine it. Disclosure is not an end in itself; it must enable meaningful scrutiny and consequences for misleading claims.
Second, asset owners must act as owners. Pension fund trustees cannot outsource their responsibilities simply by appointing investment managers. They must set clear mandates, explain their expectations on climate risk and transition alignment, monitor performance and hold managers accountable when they fall short. That includes using voting rights and engagement to press companies for credible transition plans and measurable progress. Delegation is not abdication.
Third, banks and investors must connect their financing decisions to credible transition pathways. This requires more than individual climate policies or sustainable finance targets. Financial institutions should demonstrate how their lending and investment strategies support national development priorities and climate commitments, as well as regional and continental ambitions. Governments, in turn, must provide clear, credible transition plans against which financial institutions can align their decisions and be assessed.
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These measures will not eliminate the need for more capital, better projects or international support. Nor can financial institutions deliver the transition alone. But they can help ensure that existing capital supports, rather than undermines, the changes African economies need.
That is the conversation COP31 should help advance. When policymakers discuss how to mobilise more climate finance, they must also ask how to make existing finance accountable. How will we know whether capital is supporting the transition? What must institutions disclose? Who will challenge the gap between commitments and practice? And what happens when they fail to act?
There is no transition without transition finance. But finance does not become transition finance simply because an institution labels it green or commits to a net-zero target. Its value depends on where capital flows, what it enables and whether investors use their influence to change the behaviour of the companies they finance.
Africa does not just need more capital. It needs capital that works for the transition – and institutions that can be held accountable when their decisions work against it.
Nicole Martens is a development economist in South Africa, an environmental scientist and the Just Share executive director as of February 2026.
