Efforts to enhance climate finance and address humanitarian needs through innovative financial mechanisms are gaining renewed attention ahead of the upcoming COP31 climate conference in Türkiye. Advocates stress the urgency of scaling existing measures and introducing new strategies to support vulnerable populations facing climate-related crises and conflict.

One approach gaining traction involves increasing pre-arranged financing to cover humanitarian crises. Currently, insurance payouts for drought conditions have provided cash assistance to over 7,600 families and enabled remote education access for 28,000 children. Experts argue that these programs must expand significantly to meet growing needs. The United Kingdom, collaborating with the Bridgetown Initiative, is seeking to boost pre-arranged financial mechanisms so that they account for 20 percent of crisis financing by 2035. The UK’s G20 presidency next year is seen as a critical moment to advance this pledge from commitment to implementation.

In parallel, there is renewed discussion around debt swap strategies, particularly humanitarian debt swaps—where debt reductions are redirected to social and environmental priorities. Traditionally, environmental debt swaps have involved purchasing high-interest debt of developing countries at a lower rate guaranteed politically, with the savings channeled toward ecological projects. However, despite 3.4 billion people living in countries that allocate more resources to debt interest than to health or education, a humanitarian debt swap has yet to be realized. Proposals advocate adapting the debt-for-nature swap framework for humanitarian purposes by mobilizing guarantees from multilateral development banks and development finance institutions. This would lower refinancing costs, with the resulting savings invested in humanitarian imperatives such as climate adaptation. Additional considerations include incorporating climate-resilient debt clauses, allowing debt repayments to be suspended after certain natural disasters.

Another focal point is the support of indigenous private sector activities in conflict-affected regions. Because local businesses in such areas often struggle to attract investment due to heightened risks, development finance institutions are increasingly using aid funds to unlock private capital by mitigating risks, facilitating deal-making, and providing technical assistance. British International Investment has committed to allocating 40 percent of its new investments through 2031 as climate finance. Coupled with a 25 percent commitment to “frontier markets,” this strategy aims to channel finance into least developed countries and regions typically overlooked by private investors. The intention is to ensure that investments flow into contexts where private capital would not usually venture.

David Miliband, president and CEO of the International Rescue Committee and a former UK foreign and environment secretary, emphasized the need to move beyond rhetoric at international summits, calling for year-round practical action. Miliband highlighted the opportunity presented by COP31 to improve access to climate finance in fragile countries by simplifying bureaucratic hurdles, investing in local capacity, recalibrating risk assessments, and encouraging innovation focused on concrete outcomes.

With climate impacts intensifying and the poorest populations disproportionately affected, stakeholders agree that time is critical to accelerate and scale effective financial solutions to address intersecting humanitarian and environmental challenges.