Foreign Secretary David Lammy has announced £12 million ($16.3 million) in new funding to support developing countries in accessing UK private sector climate finance and disaster risk insurance. The measure aims to strengthen climate resilience in vulnerable nations while promoting green economic growth at home.
The funding, unveiled on Tuesday (8 July), is part of the UK government’s broader Plan for Change and will help deliver faster financial support in response to extreme weather events such as hurricanes and droughts. Triggered by early warning systems, the pre-arranged disaster relief finance mechanism is designed to reduce the human and economic cost of climate shocks.
The announcement coincides with a high-level meeting in London, where senior Cabinet ministers from the Treasury, Foreign Office, DESNZ, and DEFRA convened with leaders from the City of London to explore ways to channel sustainable finance into emerging markets and developing economies.
Emerging markets are forecast to account for 65% of global growth by 2035. The UK government sees a significant opportunity for the City of London—already the world’s leading hub for sustainable finance—to play a pivotal role in unlocking investment to support this growth.
“This is the greatest global challenge we face,” said Lammy. “But tackling the climate crisis also presents a huge opportunity for the UK. The green sector is worth trillions, and we are determined to capitalise on it—delivering jobs, security, and prosperity at home.”
Last year, the UK’s green sector grew three times faster than the broader economy, attracting £43 billion in private investment. The government now intends to build on this momentum, with measures that both support climate-vulnerable countries and stimulate domestic green growth.
The new commitment follows the UK’s recent announcement of a global coalition to scale up pre-arranged finance by tenfold by 2035. The government also launched an initiative to improve public market investment in developing economies, announced by Development Minister Baroness Chapman in Sevilla last week.
Additionally, the Foreign Secretary revealed that the UK’s Financial Services Centre of Expertise will support financial regulators across ASEAN, offering access to the UK Financial Conduct Authority’s expertise. The goal is to align regulatory practices across the region to facilitate UK investment in green growth opportunities. For the first time, the UK will begin publishing pre-arranged finance figures as a share of its total crisis finance annually, signalling a commitment to improving financial preparedness for climate-related disasters.
