Understanding corruption risk in climate finance
Outcomes of session 1 of the webinar series on Climate Change and Corruption, organized by the SDC’s CDE and PGE Networks together with U4.
Event summary
Climate change is an accelerating phenomenon with far-reaching and complex implications for numerous sectors. The estimated global climate finance needs per year go up to 9 trillion USD according to the Climate Policy Initiative. Thus, the sheer scale of the financial resources needed and/or mobilized in this context, make climate change a field that deserves special attention for the fight against corruption.
Aled Williams from U4 explained corruption risks and patterns in climate finance. He highlighted three characteristics that make climate finance particularly vulnerable to corruption risks, namely the (1) speed and scale of investments, (2) complexity of climate finance instruments and investments, (3) investments directed towards higher-risk governance jurisdictions). He further explained primary corruption risk patterns for climate finance, including fund diversion & embezzlement, elite capture, greenwashing and land bribery/collusion.
Andreas Weber from SDC provided insights into SDC’s approach to corruption risk management and presented the available tools and special challenges linked to climate change and corruption.
In a plenary discussion moderated by André Wehrli from SDC, the participants shared their views and experiences on the topic. Some key elements of the session included:
- Climate finance corruption risks go beyond the misuse of money. Corruption should be understood as part of a broader system involving political influence, access to resources, land rights, institutions, and decision-making processes. Focusing only on financial flows risks overlooking how power and incentives shape who benefits from climate investments and who is excluded
- Traditional compliance and oversight measures are often insufficient in complex environments. While audits, reporting requirements, and anti-corruption controls remain important, they may not adequately address underlying local power structures and political dynamics. Understanding the political economy, who holds power, who influences decisions, and how resources are allocated, is essential. Strengthening civil society and local accountability mechanisms may help counterbalance these risks, although there is no straightforward formula for achieving this in practice.
- Growing pressure on climate finance can increase corruption risks. Fewer donors, rising funding needs, and a shift towards more transactional aid models are creating pressure to move climate finance faster and at a larger scale. As more funds are channelled directly through governments, particularly in fragile settings, ensuring transparency and accountability becomes more important.
Documentation
Next sessions in this series (registration needed)
Corruption and multilateral climate funds
Session 2 of the webinar series on Climate Change and Corruption, organized by the SDC’s CDE and PGE Networks together with U4.
- 24 September 2026
- 12:00 - 13:30
Corruption risk management in locally led climate action
Session 3 of the webinar series on Climate Change and Corruption, organized by the SDC’s CDE and PGE Networks together with U4.
- 4 November 2026
- 12:00 - 13:30