A climate finance report released by the Climate Vulnerable Forum (CVF) and Henley & Partners highlights significant shortcomings in funding for urgent climate action and proposes investment migration as a means to unlock critical resources for at-risk nations.
The report, Citizenship by Investment: Sustainable Climate Finance for Governments, underscores the dire financial situation faced by small island states and other vulnerable nations struggling to access the billions required for climate adaptation. Despite facing existential threats such as coastal erosion, saltwater intrusion, and economic instability, these nations remain largely excluded from international climate finance mechanisms, leaving them ill-equipped to combat the worsening climate crisis.
Funding shortfalls for climate-vulnerable nations
The CVF, an international alliance of 70 climate-vulnerable nations representing 1.75 billion people—20% of the global population—accounts for just 6% of global carbon emissions yet bears the brunt of climate change. According to the report, these nations will require an estimated USD 500 billion annually by 2030 to fund climate action, sustainable development, and environmental conservation, highlighting the urgent need for a more equitable climate finance system.
Mohamed Nasheed, Secretary-General of the Climate Vulnerable Forum and former President of the Maldives, criticised the global financial system for its failure to provide accessible climate funding.
“While wealthy nations delay climate action and funding commitments, frontline countries are left fighting for survival. The international financial system is failing us, and we need bold solutions to shift the balance of power in climate finance,” he stated.
Nasheed highlighted that over the past two decades, CVF countries have already lost 20% of their potential GDP growth due to climate-related damages, making traditional funding mechanisms insufficient.
Investment migration as a climate finance solution
The report explores how investment migration—where individuals obtain citizenship or residency through financial contributions—can serve as an alternative source of climate finance. Henley & Partners, a global advisory firm specialising in investment-based residence and citizenship programmes, has facilitated over USD 15 billion in foreign direct investment worldwide.
One such initiative, the Nauru Economic and Climate Resilience Citizenship Program, launched at COP29, serves as a model for directing private capital into climate adaptation and mitigation projects.
Dr Juerg Steffen, CEO of Henley & Partners, stated: “By mobilising international investment, we can provide immediate, non-debt funding for climate resilience projects, offering a crucial financial lifeline for vulnerable nations while enabling investors to support global climate action.”
The report advocates for the creation of Investment Migration Resilience Funds (IMRFs), which would allow nations to channel private investment into coastal protection, carbon offset initiatives, and blue economy development without increasing national debt.
A shift from sovereign debt to sovereign equity
According to UN data, Small Island Developing States (SIDS) have suffered USD 153 billion in climate-related losses over the past 50 years despite contributing less than 1% of global emissions. With a USD 34 billion climate adaptation finance gap and 70% of SIDS exceeding sustainable debt levels, the report argues that investment migration offers a viable alternative to traditional debt financing.
Dr Christian H. Kaelin, Chairman of Henley & Partners, stressed the need for a paradigm shift in climate finance: “Conventional debt-based financing keeps many climate-vulnerable nations trapped in restrictive repayment cycles. Sovereign equity through investment migration presents a transformational alternative—by converting citizenship rights into direct capital for national economies, these programmes provide immediate liquidity without intergenerational debt.”
The report also discusses the geopolitical implications of climate migration, with Dr Parag Khanna, Founder and CEO of AlphaGeo, arguing that: “The world is entering an era where mobility is no longer just an economic advantage but a survival imperative. Climate change is redrawing maps, reshaping sovereignty, and forcing nations to rethink citizenship.”
Redefining citizenship for climate resilience
The Nauru Economic and Climate Resilience Citizenship Program represents a significant shift in how nations approach climate finance. Nauru’s President, H.E. Hon. David W.R. Adeang, M.P., highlighted its importance: “Our programme funds critical resilience initiatives—from coastal reinforcement to modernised water management and sustainable food production. Similar models have strengthened climate resilience in small island states like Grenada and Antigua and Barbuda, but Nauru’s is the first to put climate adaptation at its core.”
As climate-vulnerable nations continue to face financial exclusion from traditional funding mechanisms, the report calls for urgent policy changes to allow greater access to private capital through investment migration. With climate disasters escalating and adaptation finance lagging, such innovative funding models could provide a crucial lifeline for the world’s most at-risk nations.
