£12M commitment for disaster risk finance will enable faster responses to climate shocks in vulnerable countries and reduce recovery costs.
UK financial institutions mobilised to channel private investment into sustainable initiatives across emerging markets, which are projected to drive 65% of global growth by 2035.
New regulatory support for ASEAN nations to align green finance standards, opening long-term opportunities for UK investors.
The UK has announced a £12 million funding package aimed at bolstering disaster risk finance for climate-vulnerable countries—part of a broader strategy to position the UK as a global hub for sustainable finance and green economic growth.
Foreign Secretary David Lammy unveiled the initiative during a high-level meeting with City of London financial leaders and senior Cabinet ministers from the Treasury, Foreign Office, DESNZ, and DEFRA.
“The climate and nature crisis is the greatest global challenge we face. Failure to act will cause unprecedented environmental damage, fuelling displacement, conflict and famine,” said Lammy.
“Tackling this crisis is also a huge opportunity for people and businesses here in the UK, delivering on our Plan for Change. The green sector is worth trillions of pounds, and I’m determined that we seize the economic growth, jobs and security it offers.”
The £12 million commitment focuses on pre-arranged disaster finance and insurance, designed to release funding quickly in the event of climate events like hurricanes and droughts. By using early warning systems and forecast triggers, this mechanism reduces disaster response costs and accelerates recovery timelines.
This initiative is backed by the UK’s private financial sector, with Lammy highlighting that:
“Today’s measures, in support of the UK government’s Plan for Change, will help unlock sustainable finance from the UK and elsewhere, and ensure developing countries can better manage climate shocks themselves.”
The announcement aligns with the UK’s broader push to make London the premier destination for sustainable finance. Global climate investment reached $2.1 trillion last year, and with London ranked as the top global centre for sustainable finance, UK officials are moving to harness this momentum.
Last year, the UK’s green economy grew three times faster than the broader economy, attracting £43 billion in private investment. The government sees emerging markets—expected to drive 65% of global growth by 2035—as a key lever for scaling climate finance and green industry.
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Complementing the disaster finance commitment, Lammy also announced that the UK’s Financial Services Centre of Expertise will partner with financial regulators across ASEAN. The collaboration, supported by the Financial Conduct Authority, will promote regulatory alignment and green growth opportunities for UK investors in Southeast Asia.
This follows a UK-led global coalition launched last week to scale pre-arranged disaster finance tenfold by 2035. The announcement, made by Minister for Development Baroness Chapman at the 4th International Conference on Financing for Development in Sevilla, also included a commitment to increase developing market investment through public channels.
With coordinated public and private efforts, the UK aims to both mitigate global climate risks and unlock long-term domestic economic gains, reinforcing the City of London’s leadership in green finance.
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