The Decade Of Competition Has Arrived, But Is The Global Financial System Ready For It
February 23 - Welcome to what the World Economic Forum has dubbed "the decade of competition," an era of competitiveness where nations and regions race to secure resources, build resilience and attract capital, all while planetary boundaries compress. This shift demands we fundamentally rethink how finance operates.
Every year, the World Economic Forum Global Risks Report highlights issues that business leaders lose sleep over on daily basis. The 2026 edition shone the light on the fact that business leaders are more worried about geopolitical confrontation and misinformation than environmental collapse. In the short term, at least, geopolitical risks appear to be overriding environmental concerns in boardrooms worldwide.
At the same time, over the next decade, environmental risks remain firmly in the top three global threats. The UK government's recent review finds strong consensus that climate risks are intensifying across planetary, economic and financial systems. The Department for Environment, Food and Rural Affairs has concluded with high confidence that global ecosystem degradation threatens UK national security and prosperity.
So the focus of business on only addressing immediate risks as a placeholder for mitigating the core drivers of climate change and nature loss and building resilience to environmental risks is not a viable strategy. Unfortunately, we are living in a reality where environmental risks cannot be put on pause and have to be dealt with at the same time as geoeconomic divergence.
The Gap Between Commitments And Capital
Here is the problem: while frameworks, disclosures and net-zero commitments have proliferated, they haven't translated into capital flows at the scale or speed required. I see this daily in my work with financial institutions. They have the reports, the task forces, the sustainability expertise. What they lack is a clear pathway from analysis of barriers to deployment.
Structural constraints, fragmented risk assessment and misaligned incentives continue to limit investment in the very areas where finance could have the greatest impact. We're stuck in a loop of measuring problems without solving them.
Closing this gap will require more than incremental change. It demands a fundamental shift in how finance understands risk, values resilience and directs capital. This is what we call "rewiring finance”.
Proof That Progress Is Possible
The good news? When institutions are supported by robust frameworks and peer accountability, progress accelerates.
Last week, Cambridge’s ClimateWise insurance industry leadership group published its 2025 review, demonstrating the importance of strategic integration of sustainability into day to day business guided by business-relevant transition plans. Members showed stronger strategic integration of climate considerations, increased use of double materiality assessments, and deeper governance of nature-related risks. For the first time, the review assessed transition plans—with one third of members already submitting full plans and another third formally committed to developing them.
Five Frontiers For Rewiring Finance
Over the coming months, we're focusing our work on five critical bottlenecks where finance could unlock significantly greater impact:
1. Transition finance in African economies. Significant private investment opportunities remain constrained by structural and market failures, despite urgent economic, energy and industrial transition opportunities and resilience needs. Finance must learn to support different transition pathways across diverse economic contexts rather than impose one-size-fits-all solutions designed for developed markets.
2. The intersection of climate, nature and social risks. Using food systems as a lens, we are helping investors and policymakers recognize compounded, system-wide risks that are dangerously underestimated when assessed in isolation. A drought isn't just a climate event, it is a cascade that touches water, agriculture, food security, migration and financial stability.
3. Financial inclusion as a foundation for just transition. Kenya's leadership in digital finance shows how climate finance can reach vulnerable communities and support livelihoods and resilience. If we can't make climate finance work for the people most affected by climate change, we're building resilience for the few, not the many.
4. Insurability. As physical climate risks intensify, questions of affordability, protection gaps and systemic exposure are growing urgent. We are assessing how close assets, regions and sectors are to becoming uninsurable and what levers could reverse that trajectory. When insurance retreats, investment follows. This is where climate risk becomes financial crisis.
5. Resilience adjusted credit assessments for banks. With supervisory expectations rising, banks need practical tools to integrate physical climate risk and adaptation into lending and credit decisions. Depending on the source, investment in resilience ranges brings a return of 4-6USD per 1USD invested (World Bank, damage avoidance only) to USD10-13 return (WRI including broader benefits). So there are both risks and opportunities to adaptation and resilience-building.
Shaping strategy and building capability
As we work on these areas we have to take into account the geoeconomic and political landscape. In a context of disinformation, robust evidence of real risks and ‘what works’ is essential - particularly when that is translated into decision-support tools. But evidence and tools alone won’t rewire finance. Strategic planning and capability building must run alongside.
As climate, nature and social risks become more interconnected, organizations are grappling with how to interpret evolving scenarios, standards and regulatory guidance in ways that inform real-world decisions. Through customized executive programs and industry partnerships, we work with financial institutions to move from understanding risk to managing it, and then from managing risk to seizing opportunity.
Our open education programs, are designed to build practical skills grounded in the latest research and delivered with industry experts. Because strategy without implementation capability is just aspiration.
Building the conditions to invest in the future
Rewiring finance isn't something any single institution can deliver alone. It requires practical experimentation across the financial system with rapid sharing of lessons learned; sector-wide demands for the ‘rules of the game’ that will unlock investment in the future and build systemic resilience; pre-competitive collaboration to establish industry standards to make new financing mechanisms replicable at scale and rapid design of tools, frameworks and financial architectures to enable capital to flow where it is needed most.
The geopolitical and environmental pressures we face aren't going away. The decade of competition is here. The question is what finance will compete on. Will it be risk optimisation structures for adaptation and pricing for opportunities to fund economic transformation and resilience building or looking for value in shrinking markets and a game of musical chairs in avoiding holding stranded assets.
Over the coming months, we'll continue to share insights, publish new analysis and convene finance leaders around practical solutions with the aim of creating the conditions in which better decisions and better capital allocation can emerge.
Because in an era of competitive sustainability, the institutions that learn to integrate environmental resilience into their core strategy will be able to manage their risks and build innovative business models to compete through a global industrial and economic transition.
And that's the competition that matters.