Sustainable Finance Innovation Wrapped

As 2025 draws to a close, we reflect on a year that marked real progress for sustainable finance.

Despite global uncertainty, the UK sustained strong momentum, underpinned by stable policy direction, continued market innovation and expanded international engagement. Moreover, in the last 12 months, London’s position as the world’s pre-eminent centre for sustainable finance has only become more pronounced. The City of London Corporation has played a central role in shaping this progress – convening markets, championing shared standards and unlocking investment.

Here are some of the key achievements from the year.

In 2025 we...

… brought the market together to define credible transition finance

2025 was a defining year for transition finance. In February, the City Corporation and the UK Government co-launched the Transition Finance Council (TFC). Uniting more than 80 senior leaders spanning finance, industry, policy, and civil society, the TFC advances the roadmap and recommendations set out in the Transition Finance Market Review (TFMR).

The first nine months of the Council has witnessed an impressive rate of activity – hosting five Strategic Steering Group meetings, 21 Working Group meetings, four major events and more than 30 stakeholder workshops, presentations and roundtables, as well as engaging more than 100 domestic and international organisations during London Climate Action Week. 

The TFC also published draft Transition Finance Guidelines (the consultation for which will remain open until Spring 2026) and five formal publications, including a Finance Playbook offering a sector-agnostic blueprint to close the “finance gap”. In September, the Council and the Net Zero Council published a joint statement heralding collaboration on sector transition plans.

Fundamentally, the UK will continue to engage globally with other jurisdictions to advance credible transition finance. 

… strengthened high-integrity global carbon markets

Global carbon markets gained momentum this year as the global community re-committed to closing the $1.3tn climate finance gap. Indeed, the new Coalition to Grow Carbon Markets, co-chaired by the UK, Singapore and Kenya, launched during London Climate Action Week. Meanwhile, at COP30 the Coalition published shared integrity principles to guide the use of carbon credits – with the endorsement of 11 countries. Momentum also grew in compliance markets, with 18 jurisdictions, including the UK, Brazil and China, backing the Declaration on the Open Coalition for Compliance Markets. Expect further progress through these Coalitions in 2026.

Domestically, the UK forged real progress on carbon markets through a long-anticipated consultation on voluntary carbon and nature markets, signalling a shift toward a clearer, rules-based framework. This complements the UK’s commitment to integrate greenhouse gas removals into its ETS which explore linking with the EU’s scheme – and could significantly expand demand, scale and liquidity.

The City Corporation supports the UK’s efforts to scale high integrity markets through our work with the UK Carbon Markets Forum. A private sector initiative, the Forum started with the support of HM Government and it’s chaired by Dame Clara Furse. Key thought leadership published this year includes reports on scaling both VCM and Paris-aligned markets and a roadmap for UK leadership.

… set the tone for global sustainability standards

The UK remains a leader in global green finance standards. The City Corporation and Clifford Chance published two global reports: one advocating coherent adoption of ISSB sustainability disclosure standards to boost investor confidence, and another charting a path for scaling high-integrity carbon markets. Together, these reports have proved instrumental in shaping global policy, aligning market practices and addressing integrity, transparency and legal certainty – all critical for unlocking sustainable investment at scale.

The City Corporation also served as Secretariat for the development of a global Conduct for ESG Ratings and Data providers, now signed by all major providers. Not only will the Code underpin future UK regulation for ESG ratings providers, it also provides a baseline solution for jurisdictions developing their own frameworks.

… scaled impact investing to deliver measurable social change

The UK saw its position as a global leader in impact investing go from strength to strength in 2025.  And we were greatly encouraged by Government’s evident commitment – deepened with the creation of the Social Impact Advisory Group, whose recommendations led to two major outcomes: the Better Futures Fund, a £500 million fund supporting young people and families in disadvantaged communities; and the Office for the Impact Economy, a new government body to coordinate and scale impact capital.

The City Corporation and the Impact Investing Institute (III) continued working to support the UK’s impact finance agenda this year, collaborating to publish a whitepaper setting out recommendations to accelerate impact-led growth. We look forward to building on this momentum in 2026 and beyond.

… showcased UK leadership on the global and domestic stage

But climate change and the transition are global challenges, requiring international engagement. This year, the City Corporation reinforced the UK’s leadership in sustainable finance by actively participating in major global and domestic climate platforms.

A case in point, at COP30 we championed high-integrity carbon markets, as well as showcasing London’s strengths in insurance innovation for mobilising climate finance globally, not to mention our underscoring of the work being undertaken by the Transition Finance Council (TFC).  

Momentum towards COP30 was established earlier in 2025, with the biggest London Climate Action Week to date, comprising more than 700 events and 45,000 participants. During the week, the City Corporation hosted its flagship Net Zero Delivery Summit (NZDS), convening 23 speakers and senior representatives from finance, policy and civil society. From scaling transition finance for hard-to-abate sectors, to boosting investment into climate through high-integrity carbon markets, and mobilising private finance for nature and adaptation, as well as supporting vulnerable countries through innovative climate finance – the event represented a vital opportunity for alignment ahead of Brazil. 

We are currently shaping our agenda for next year’s Net Zero Delivery Summit, and will soon put out a call for input. For further information, or to discuss any of the above, please do contact SustainableFinance@cityoflondon.gov.uk.