Will the money from investment and financing reach the projects that need it? Will they help people and places cope with climate change? And how will we know they are making a difference?

Commitments set direction, but they do not build grids or protect communities from flooding. The Paris Agreement provides the long-term direction however COP31’s focus on implementation puts the spotlight on decisions being made now: supportive policy, companies putting plans into practice and money reaching projects on the ground.

COP31’s focus on implementation comes at a challenging time. Geopolitical tensions, pressure on public finances and energy security concerns are testing governments’ ability to invest for the long term, while physical disruption exposes weaknesses in infrastructure, food systems and supply chains. For investors, the challenge is to distinguish ambition from action that builds resilience and delivers measurable progress.

Test 1: Can capital follow ambition?

Technical potential does not automatically make a project investable. A project can support a national climate priority and still lack workable economics or a realistic route from planning to operation. Capital needs the right conditions to follow ambition, including supportive policy, infrastructure and appropriate risk-sharing.

This is where COP31’s proposed Climate Implementation Bridge (BRIDGE), could be important. Developed with the United Nations Development Programme, it aims to connect governments, financial institutions and delivery partners around priorities already identified in countries’ climate and adaptation plans. Its value will depend on whether that coordination helps move national priorities towards delivery.

COP31’s proposed “35-by-35 Global Electrification Pledge” seeks to increase electricity’s share of global final energy consumption from around 23% today to 35% by 2035 [1]. The International Energy Agency’s September 2026 estimates showed that cost-effective deployment of existing technologies could raise electricity’s share to 33%, putting the 35% by 2035 target within reach.

COP31’s proposed “35-by-35 Global Electrification Pledge” seeks to increase electricity’s share of global final energy consumption from around 23% today to 35% by 2035 [1].

The opportunity is not simply to generate more clean electricity, but to build the networks, storage and flexibility that allow economies to use it. Following substantial reductions in the cost of renewable generation, these enabling systems are becoming a larger part of the investment need.

In practice, enabling investment:

• Supporting the conditions for investment. Royal London Asset Management’s engagement policy supports investment in grids and a more stable, investable policy environment. These are important conditions for turning project pipelines into infrastructure on the ground.
• Identifying potential opportunities. For Royal London Asset Management, the Climate Implementation Bridge may improve visibility of climate and infrastructure opportunities, subject to appropriate due diligence and risk-return requirements.

Test 2: Does investment build resilience?

Mobilising capital is only the starting point. What matters is whether it helps infrastructure, communities and supply chains withstand disruption. More finance does not automatically mean more resilience.

More finance does not automatically mean more resilience.

El Niño illustrates how disruption can spread. This naturally occurring climate pattern shifts rainfall and temperature, putting pressure on food systems, water supplies and infrastructure. Royal London Asset Management’s research [see blog 'The next inflation storm?' ] examines how these shifts, combined with higher energy and fertiliser costs, could weaken harvests and push up food prices, squeezing household budgets and adding to inflation.

For investors, these pressures can affect cash flows, asset values and the cost or availability of insurance today. Adaptation finance therefore needs to respond to the risks people and businesses actually face, rather than treating investment alone as evidence of resilience.

An effective and just adaptation starts with local conditions and the people that are being affected. Well-designed measures can reduce physical risk and benefit communities and ecosystems; poorly designed ones can shift the problem elsewhere. The question is whose vulnerability is reduced, and whether that comes at someone else’s expense.

Nature is part of the answer, not a separate issue. Climate and biodiversity summits follow different negotiating tracks, but healthy land, water and ecosystems underpin the same infrastructure, production and supply chains. Their degradation can increase exposure to flooding, fire and water scarcity.

COP31’s Action Agenda brings these issues together through priorities covering climate-resilient cities and agriculture, food security, and nature-based solutions. The test is whether investment across these areas helps people, businesses and the natural systems they depend on to cope better with these types of disruptions.

In practice, assessing resilience:

• Understanding resilience. Royal London Asset Management’s work brings together physical-risk analysis and engagement on adaptation and nature.
• Assessing physical exposure. We are testing physical-hazard analytics to identify material exposures and financial impacts.
• Examining adaptation trade-offs. Our Just Adaptation engagement programme examines whether companies understand local conditions, involve affected stakeholders and manage trade-offs. It has found that companies increasingly recognise physical risks but often provide limited explanation of how adaptation-related trade-offs are managed.
• Connecting nature and resilience. We examine whether transition strategies recognise companies’ impacts on nature and dependence on ecosystem services. Our newly created Nature Tool helps our investment teams identify material exposures, complementing work on water and adaptation.

Test 3: Can we see real progress?

The third test is evidence: what has changed, and what difference has it made? A project pipeline or adaptation plan shows intent. Progress means being able to trace that intent through funding and construction to an operating project and then assess the benefits it delivers.

For example, announcing a grid upgrade is not the same as bringing it into use. Completing it is evidence of delivery; showing that it enables more clean electricity to reach homes and businesses is evidence of benefit. Governments and companies need to make both visible, rather than treating budgets, targets or plans as proof of success.

The same applies to resilience. Identifying flood risk is only the starting point. What matters is whether action follows, vulnerability falls and risk is not simply shifted elsewhere. For investors, that is the difference between a plan on paper and real progress.

In practice, testing delivery:

• Assessing commitments against action. Royal London Asset Management’s Climate Transition Assessment uses 12 indicators to consider whether companies are translating net-zero commitments into targets, governance, transition plans, capital allocation and near-term delivery.
• Informing stewardship and research. Its findings inform research, engagement and voting priorities.

What matters after COP31?

COP31 cannot solve every political, institutional or financial challenge. Its value will be judged by what happens afterwards, not simply by what is announced. The initiatives discussed here offer routes to action, but their credibility depends on whether they help overcome the practical barriers to delivery.

For investors, the stronger signal will be projects moving from plans into operation and evidence that people, businesses and ecosystems are better able to withstand disruption. Funding and plans matter, but neither are proof of that change.

For Royal London Asset Management, the conversation does not end at COP31. We will continue to explore physical climate risk, just adaptation, nature, methane, sustainable and ethical artificial intelligence (AI), and the policies shaping investment and delivery.

A successful COP31 would do more than add to the list of commitments. It would help attract capital to viable projects, strengthen resilience and turn ambition into real world progress.

References

[1] Electrification takes centre stage as Hormuz shock spurs countries to seek to enhance energy security - IEA 

Read more of our climate views

Royal London Asset Management engages with companies as part of its responsible investment and stewardship strategy, aiming to drive long-term value for clients while promoting sustainable business practices.

Our voting, engagement and advocacy activities are designed to be pragmatic, informed by research, evolving market insights and local best practice, and aligned with the long-term interests of our clients. These activities aim to enhance the value and integrity of our investment decisions.

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For professional investors only. This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. Reference to any security is for information purposes only and should not be considered a recommendation to buy or sell. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change.