Sovereign Wealth Funds Pivot to Direct Decarbonization Investment, Pouring $19 Billion into Climate Projects in 2024
New data reveals strategic shift toward adaptation and high-impact resilience projects amid evolving climate finance landscape
LONDON, November 19, 2025 — Sovereign wealth funds (SWFs) doubled down on direct climate investments in 2024, deploying a record $19 billion across 79 deals while fundamentally shifting strategy from renewable energy headlines to high-value resilience infrastructure, according to new research from Global Climate Finance Analytics (GCFA).
The latest findings mark a decisive change in institutional climate finance. While mitigation investments totaled $8 billion—focused on low-carbon energy generation ($4.6 billion) and energy efficiency ($1 billion)—adaptation financing reached $10.9 billion across 24 deals, averaging $452 million per transaction compared to mitigation’s $146 million average. This represents the first year adaptation funding has surpassed mitigation, signaling SWFs’ focus on climate impact over transaction volume. The decline in mitigation funding from $13.8 billion in 2023 reflects a strategic recalibration rather than reduced commitment, as funds target fewer, higher-impact projects that generate long-term value.
“The data demonstrates a maturation of sovereign wealth fund climate strategies,” said Dr. Elena Vasquez, CEO of Global Climate Finance Analytics. “These investors are moving beyond passive risk avoidance to active climate stewardship, engaging directly with asset managers and portfolio companies to drive measurable decarbonization outcomes. The average adaptation deal being three times larger than mitigation deals shows they’re prioritizing systemic resilience over project quantity.”
Geographic analysis reveals Asia’s emergence as the dominant destination, capturing 15 deals in 2024 split between seven adaptation and eight mitigation projects. Southeast Asia alone requires $1.5 trillion in climate investments by 2030 to meet its targets, yet only $45 billion in green financing had materialized by 2023. Singapore’s Temasek exemplifies this regional focus through its GenZero platform, which invests in nature-based solutions, decarbonization technologies, and carbon market development. Indonesia and Singapore attracted over half of the region’s green investments due to supportive policy frameworks, while intraregional investments doubled in 2022 as foreign capital retreated.
Technology deployment patterns show sovereign funds increasingly backing next-generation solutions. In the Middle East, Saudi Arabia’s Public Investment Fund (PIF) is establishing a voluntary carbon market and investing in carbon capture and storage (CCS) technologies to support Vision 2030 diversification goals. Abu Dhabi National Oil Company’s CCS facility, operational since 2016, plans to expand capacity six-fold by 2030. These moves align with broader industry trends toward circular carbon economies and regulated carbon trading infrastructure, including Mubadala’s stake in AirCarbon Exchange, the world’s first regulated carbon trading exchange.
Market analysts note that SWFs’ unique attributes—substantial capital reserves, multi-decade investment horizons, and tolerance for illiquidity risk—position them as critical players in bridging the global climate finance gap. The United Nations Environment Programme estimates developing countries face an annual adaptation finance shortfall of $187–$359 billion. With their pivot toward direct investment and active portfolio engagement, sovereign wealth funds are increasingly partnering with pension funds, insurance companies, and multilateral development banks to co-invest in frontier markets, particularly in Africa, which historically receives less than 5% of adaptation deals.
About Global Climate Finance Analytics
Global Climate Finance Analytics (GCFA) is an independent research institute specializing in institutional climate investment trends, sovereign wealth fund strategies, Sovereign Wealth Funds Increase Direct Investment in Decarbonization Projects and sustainable finance market intelligence. GCFA provides data-driven insights to asset owners, policymakers, and financial institutions worldwide, tracking over $2 trillion in climate-aligned assets under management.
Media Contact
Sarha Al-Mansoori
Director of Corporate Communications
G42
Email: media@g42.ai
Phone: +971 2555 0100
Website:www.g42.ai
