As the world accelerates toward climate resilience, international climate finance has become a lifeline for developing countries. The Green Climate Fund (GCF), established under the UNFCCC, was envisioned as a key vehicle to help vulnerable nations combat climate change through equitable financial support for mitigation and adaptation. However, disparities in GCF disbursements and thematic imbalances threaten its core mission. With South Africa hosting the 2025 G20 Summit, this is the right time to rethink how the GCF works and what must change.

Vulnerability paradox: Who gets the money?

While the GCF aims to support nations at the frontline of climate change, GCF [A1] [A2] funding has often favoured countries with stronger institutions, stable economies and technical expertise, while countries grappling with governance challenges, conflicts or low administrative capacity often fail to access critical climate finance. For example, according to GCF data, India, Indonesia and Brazil have received $809.48 million, $634.77 million and $473.49 million respectively from the GCF. At the same time, Chad, Somalia and Syria – ranked among the most climate-vulnerable nations by the International Rescue Committee – got $97.58 million, $177.3 million and $1.86 million each. In total, the 10 most climate-vulnerable nations secured $1.57 billion. This is less than the combined $1.93 billion received by India, Indonesia and Mongolia.

Adaptation still playing catch-up

The GCF mandates a 50:50 balance between mitigation and adaptation funding. However, the current allocation deviates from this principle. Adaptation projects –although greater in number – have received around $4.64 billion, compared to $5.10 billion for fewer mitigation projects. Cross-cutting projects, which cover both areas, have received the largest share: approximately $5.94 billion across just 69 projects.

Although cross-cutting initiatives are valuable, their dominance raises concerns, especially when the GCF’s original goal was to create a fair balance between standalone adaptation and mitigation efforts. Vulnerable communities, particularly in least developed countries and small island developing states, rely heavily on adaptation support. Any imbalance can directly threaten lives and livelihoods.

The problem of unpredictable funding

The GCF depends on voluntary pledges from developed nations, leaving it vulnerable to political shifts and economic cycles. The withdrawal of any major donor destabilises planning and erodes trust, both for the GCF and for recipient countries.

What needs to change, and fast

Here’s a roadmap for how the GCF can evolve into the transformative force it was always meant to be:

Adopt a vulnerability-based allocation framework: A data-driven approach using a standardised climate vulnerability index should guide fund distribution. Countries facing the highest risk should receive prioritised support.

Establish regional GCF hubs: Setting up decentralised regional hubs would improve fund accessibility, reduce bureaucratic delays and promote tailored responses to regional challenges. These hubs can foster collaboration between local governments, non-governmental organisations and international partners.

Shift to multi-year financial commitments: While the GCF has developed a structured project activity cycle and issues requests for proposals to guide funding, concerns remain regarding the predictability of its financial flows. Transitioning from voluntary, ad hoc contributions to a multi-year replenishment and commitment model could enhance funding stability, enabling recipient countries to plan and implement long-term climate strategies more effectively.

Link funding to measurable outcomes: Introducing a performance-based disbursement system can ensure transparency and effectiveness. Funds should be tied to measurable climate results like emission reductions, adaptation milestones and resilience improvements. Regular audits and strong reporting standards would build trust and accountability.

Diversify the donor base: Reducing reliance on a few donors is essential. The GCF should explore innovative tools such as green bonds, climate levies and blended finance. For developing countries with relatively stable economies, instead of direct funding, the GCF could support the development of domestic environmental financial markets. This approach would promote self-reliance, attract private capital and build long-term climate finance ecosystems within those countries.

Create an Emergency Reserve Fund: Establishing a reserve fund would enable the GCF to respond swiftly to crises, such as donor withdrawals or sudden climate disasters. This fund could be financed through surplus contributions, green financial instruments or innovative sources such as a windfall tax on fossil fuel profits. To ensure credibility and effectiveness, it must be governed transparently and used strictly for emergency response and stabilisation.

The G20’s role in reinvigorating climate finance

Reforming the GCF is not merely a systemic reform – it is a critical step toward restoring global trust and advancing climate justice. According to IRENA, G20 countries account for nearly 80% of global emissions. They not only bear the largest share of responsibility for the climate crisis but also hold considerable influence, stemming from their economic power, leadership within international financial institutions and capacity to contribute meaningfully to the GCF.

At a time when the impacts of climate change are accelerating and climate finance remains insufficient, the GCF must undergo bold reforms. But this is not only about improving governance or efficiency – it is also about ensuring that vulnerable countries are not left to face climate risks alone. For the GCF to fulfil its mandate, the conversation must shift from procedural fixes to transformative change: change that reflects the scale of the crisis and the moral obligation to act. The G20’s role is pivotal. By leveraging their resources and influence, G20 members can ensure climate finance is accessible, predictable and fairly allocated.

Failure to address these challenges risks deepening existing inequalities and delaying urgent climate action. In a world where climate impacts know no borders, leaving the most vulnerable behind is not just unjust – it is ultimately unsustainable.