We often say we’re balancing doing good with the resources needed to do good — especially when it comes to climate change. But somewhere in that balancing act, the stakes have skyrocketed. Now, it’s a race against time — against our own limits, against institutional pressure, and against the growing fear that our planet is slipping away. Add the weight of tight deadlines, donor expectations, political agendas, and high-stakes delivery targets, and the picture becomes clear: this isn’t just a development project. It’s a collision between purpose and profit. And in that collision, greed still finds its way in. Despite our best intentions, there are still wolves — not just on Wall Street, but now on Climate Street. They speak the language of sustainability, but their actions serve short-term gain. They wear the green label, but think only in black (and red) bottom lines. If we’re not vigilant, the wolves won’t just slow us down — they’ll undermine the credibility of climate finance and corrode the integrity of the very systems we’re trying to build.
The Urgency Trap
Let’s face it – we are pouring massive amounts of money into fighting climate change. From clean energy to disaster prep, billions are flowing into projects meant to protect our future. While these investments are necessary, there’s a darker side to it that we need to talk about: fraud, greenwashing and weak oversight are threatening to derail these vital efforts. We’re in a rush to act on climate change (and rightly so), but this urgency creates shortcuts. When governments and organizations feel pressured to move quickly, they might skip important checks and balances. Under emergency or critical circumstances, procurement procedures can be rushed, there is limited competition, and loose oversight. While this gets projects moving faster, this also creates the perfect opportunity for bad actors to exploit the system through inflated prices, bribes, or even complete fake projects.
The Complexity of Climate Finance and the Fraud Risk it Carries
Making matters worse is how complicated climate finance really is. Funds pass through multiple hands – from international donors to local partners, with various governments and agencies in between. With so many players and different ways of reporting, following the money becomes like solving a complex puzzle. This intricacy makes it easier for funds to just disappear or for people to inflate costs and fake results just to secure more funding. Then there’s greenwashing – possibly the most fraudulent trend in climate action today. It’s when organizations try to appear more environmentally responsible than they actually are, whether by exaggerating their project impacts or manipulating their emission number. This isn’t just misleading – it actively undermines real climate solutions by directing resources away from the genuine efforts and has serious consequences. Fraud in climate finance doesn’t just waste money, it undermines public trust, compromises integrity and delays the solutions we urgently need.
A Better Approach: Risk Based Due Diligence
To fix this, we need strong oversight from the start, such as building risk checks into climate change projects from the very beginning and not wait until problems emerge. Climate risk frameworks might sound like a buzzword, but they are actually very practical tools that help make sure funds are used wisely. It is about regular audits, real-time monitoring, and making project information public. Getting local communities involved in watching these projects helps ensure the work actually benefits those it’s meant to help. Publicly sharing project data can also bring more eyes into the oversight process – civil society, media and even citizens themselves can act as watchdogs. Risk-based due diligence might sound technical, but it’s really just about knowing where to look more closely. It helps us figure out which projects need extra attention, which partners we should double-check, and where problems might pop up before they do. Think of it like a heat map – it shows us the hotspots so we can deal with issues early, before things start to fall apart.
Due diligence should consider: local governance and institutional integrity, beneficiary engagement and grievance redress mechanisms, procurement processes and financial transparency, and environmental and social safeguards. Embedding these checks ensures that climate projects do not just survive but they succeed under pressure.
Data, Tech, and Transparency: The New Allies in Oversight
Technology can be a powerful ally as well. From satellite monitoring and AI-powered fraud detection, there are already tools to spot suspicious patterns before they become major problems. AI can flag unusual spending patterns. Drones can verify infrastructure. Public dashboards can track milestones, disbursements, and outcomes. But technology isn’t enough – we need strong ethical guidelines, protection for whistle-blowers, and international cooperation to catch fraudsters who work across borders. We also need to tackle the root cause: weak institutions, political meddling, and poor enforcements of anti-corruption laws. This requires everyone – governments, banks, businesses, and watchdog groups – working together towards solutions. Transparency without protection can backfire –potential informants must feel safe to come forward.
Strong Systems, Honest Results
Even the best tech and tools can’t fix a broken system. If the institutions behind climate projects are weak, things will fall to the cracks. That’s why, basics like anti-corruption rules, independent audits, and having politics out of decision-making aren’t just “nice to have” – they are essential. It also takes teamwork. International partners can play a big role in helping build up local systems, making sure communities aren’t just on the side-lines but part of keeping things on track And let’s be real, money talks. Development banks and climate funders have real power to encourage honesty. They can reward trustworthy partners with better terms, link funds to real results, or even make performance scores public. When used wisely, funding isn’t just support, its leverage to keep everyone honest.
Climate Action and Anti-Corruption: Two Sides of the Same Coin
The stakes couldn’t be higher. When climate project funds are stolen or wasted, it’s the world’s most vulnerable people who suffer most. Every dollar lost to corruption is one dollar less for fighting for clean air, safe water, and a liveable future for our kids. Fighting climate change and fighting corruption must go hand in hand. We cannot afford to treat climate and corruption as separate battles. True climate resilience means building systems that can handle heat – not just rising temperatures, but political, financial and operational stress too.
In short: if we want real impact, we need climate change risk frameworks and due diligence processes built to handle the heat.
Transparency, accountability and resilience aren’t optional – they’re climate solutions in themselves. Only with them as guiding principles can we build the healthier world we’re all working towards and that is how we can deliver a better future for everyone.
Disclaimer: Statements expressed in this blog reflect the personal opinion of the author and do not represent the position or policy of GBPG or entities we are affiliated with. While we strive to ensure the accuracy of the information presented, we make no guarantees regarding its completeness, reliability, or accuracy.
