A groundbreaking climate finance report, released today by the Climate Vulnerable Forum (CVF) and Henley & Partners, highlights the failings in funding urgent climate action and explores how investment migration can unlock vital resources for climate resilience in the world’s most at-risk nations.

Small island states and other vulnerable countries struggle to access the billions needed for climate adaptation. Despite facing existential threats — from disappearing coastlines and saltwater intrusion into freshwater supplies to social and economic problems — these nations fail to access sufficient financing from the international community, leaving them without the resources to defend against the worsening climate crisis.

The CVF, an international organization of 70 climate-vulnerable countries representing 1.75 billion people —20% of the global population — accounts for just 6% of global emissions yet faces the most severe impacts of climate breakdown. By 2030, these nations will require an estimated USD 500 billion annually to fund climate action, development, and nature preservation, highlighting the urgent need for more accessible and equitable climate finance.

Mohamed Nasheed, Secretary-General of the Climate Vulnerable Forum and former President of the Maldives, points out in the Citizenship by Investment: Sustainable Climate Finance for Governments report that global climate finance remains sluggish, restrictive, and largely inaccessible to those who need it most. “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. Over the past two decades, CVF countries have already lost 20% of their potential GDP growth due to climate impacts. We cannot rely on charity from industrialized nations. Urgent initiatives are needed to ensure direct and immediate access to climate finance.”

Mobilizing private capital for climate resilience

Through its globally leading international government advisory practice, Henley & Partners has been providing strategic consulting to countries on the development, implementation, and management of investment-based residence and citizenship programs. To date, the firm has facilitated over USD 15 billion in foreign direct investment in many states. Its most recent initiative led to the establishment of the first climate-related citizenship investment program, the Nauru Economic and Climate Resilience Citizenship Program. Launched at COP29 last year, it illustrates how investment migration can serve to direct globally available private capital towards climate adaptation and mitigation efforts.

“Our ground-breaking work in Nauru and the collaboration with the Climate Vulnerable Forum on this report highlights the transformative potential of investment migration in climate finance”, says Dr. Juerg Steffen, CEO of Henley & Partners. “By mobilizing 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. Rethinking how private wealth and capital intersects with public financing needs is key to bridging the climate finance gap. Investment-based residence and citizenship programs have emerged as one such mechanism, channeling funds into adaptation, mitigation, and sustainable development efforts in climate-vulnerable countries.”

The Citizenship by Investment: Sustainable Climate Finance for Governments report outlines how investment migration programs can be structured to create Investment Migration Resilience Funds (IMRFs) that channel private capital into critical climate resilience projects without increasing national debt. By linking these programs with natural capital endowment trusts, countries can secure sustainable revenue streams to finance coastal protection, carbon offset initiatives, and the expansion of the blue economy. Successful models of this approach include leveraging blue bonds, eco-tourism, and carbon credit markets to generate funds for climate adaptation and economic diversification. These innovative financing mechanisms present a viable alternative to traditional debt-based models, offering vulnerable nations a path toward fiscal stability and long-term climate resilience.

Henley & Partners’ Chief Economist Jean Paul Fabri explains how, “effective IMRFs will operate like sovereign wealth funds, aimed at reducing economic fluctuations, funding long-term sustainability initiatives, and providing a financial cushion against climate and economic challenges. However, they differ from traditional models by incorporating climate finance, risk management, and economic development into their governance.”

From sovereign debt to sovereign equity

According to the UN, Small Island Developing States (SIDS) have suffered USD 153 billion in climate-related losses over the past five decades, despite contributing less than 1% of global emissions, and the financial burden on these nations is further exacerbated by a USD 34 billion climate adaptation finance gap. Compounding these challenges, 70% of SIDS exceed sustainable debt levels, and climate disaster damages in these regions have surged by 90% from 2011 to 2022.

“For too long, climate-vulnerable nations have been told to adapt, cope, and endure — as if resilience were simply an act of will, rather than a matter of investment”, says Sara Jane Ahmed, Managing Director of CVF and V20 Finance Advisor at the CVF-V20 Secretariat. “While disasters accelerate, climate finance remains slow, buried in barriers that punish the vulnerable with delay and debt. The cost of inaction far exceeds the price of investment. By funding climate resilience, the world is not just aiding at-risk nations — it is unlocking markets, strengthening economies, and shaping a shared future. The future belongs not to those who wait, but to those bold enough to build it.”

As one of the contributors to the report, Dr. Christian H. Kaelin, Chairman of Henley & Partners, emphasizes the need for a paradigm shift in climate finance. “Conventional debt-based financing keeps many climate-vulnerable nations trapped in restrictive repayment cycles, hindering climate adaptation. Sovereign equity through investment migration presents a transformational alternative — by converting citizenship rights into direct capital for national economies, these programs provide immediate liquidity without intergenerational debt. This is not just financial relief; it is strategic empowerment. Countries that do not yet have investment migration programs to bolster their sovereign equity instead of increasing national debt would be well advised to consider such programs to create a more sensible path. Why would you want to burden future generations with additional debt, when you can access global private capital and talent and thus increase your sovereign equity?”

Redefining citizenship for a climate-resilient future

As the report underscores, rethinking citizenship through an investment lens can empower at-risk nations to build climate-proof infrastructure, support economic diversification, and reduce financial dependency on external aid. In his contribution to the report, Dr. Parag Khanna, Founder and CEO of AlphaGeo, highlights the geopolitical shift climate migration is driving. “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. In the coming decades, the ability to relocate, integrate, and contribute to new societies will define global citizenship. Nations that proactively align their policies with these trends — offering legal and economic pathways to displaced populations — will be at the forefront of a more resilient global order.”

Also commenting in the report, Dr. Carol Nelson, a Scholar at the University of the West Indies, emphasizes that small states must adopt adaptive policy frameworks to ensure financial survival. “Investment migration is more than an economic tool — it represents a shift in global financial strategy, aligning capital, resilience, and sovereignty to support sustainable futures. Unlike traditional finance, these mechanisms foster greater mutuality, allowing for tailored fiscal resilience strategies within public institutions to enhance climate adaptation.”

Nauru’s pioneering Economic and Climate Resilience Citizenship Program marks a significant shift in climate finance. As H.E. Hon. David W.R. Adeang, M.P., President of the Republic of Nauru, points out, “our program funds critical resilience initiatives — from coastal reinforcement to modernized 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. The innovations we implement against rising seas can help shape global strategies for resilience."