(Commonwealth_Europe) The UK government has announced a major new package of support to help developing countries tackle the growing threat of climate change while also strengthening the UK’s green economy. Speaking on Tuesday, 8 July, Foreign Secretary David Lammy confirmed a £12 million commitment to disaster risk finance and insurance, designed to give climate-vulnerable nations quicker and more effective access to financial support when extreme weather hits.
The funding will be used to expand the use of prearranged finance—financial tools that can be activated automatically when certain warning signs appear, such as a weather forecast predicting a hurricane or drought. The idea is simple: by triggering payments before or as soon as disaster strikes, countries can respond faster and more efficiently. This reduces the cost of emergency response and helps communities bounce back more quickly.
But the initiative isn’t just about international aid. It’s part of a broader vision from the UK government—set out in its “Plan for Change”—that sees climate action as a strategic economic opportunity for Britain. Senior Cabinet ministers from the Treasury, Foreign Office, the Department for Energy Security and Net Zero, and the Department for Environment, Food, and Rural Affairs are meeting with City of London leaders today to explore how UK finance can play a bigger role in supporting sustainable development abroad.
David Lammy called climate change the defining global challenge of our time, warning of the devastating risks of inaction—from environmental destruction to rising conflict, hunger, and forced migration. At the same time, he pointed to the enormous upside: the transition to a green global economy, if properly managed, could bring billions in investment, high-quality jobs, and long-term security.
Emerging markets are expected to be the engine of global growth in the coming years, forecast to account for 65% of all economic growth by 2035. The UK is aiming to be at the heart of that transformation. Last year alone, the country’s green sector grew three times faster than the economy overall, attracting £43 billion in private investment. With London ranked as the world’s leading center for sustainable finance, there’s a clear opportunity to go further—and use the City of London’s financial expertise to unlock green investment in the places that need it most.
That’s why the government is putting such a strong emphasis on supporting climate finance in developing economies. By helping countries build resilience to climate shocks, the UK can reduce long-term global instability while also opening up new markets for British investors and companies.
In a related move, the Foreign Secretary also announced new technical support for financial regulators in Southeast Asia. Through the UK’s Financial Services Centre of Expertise, regulators in ASEAN countries will gain access to advice and expertise from the UK’s Financial Conduct Authority. The goal is to improve regulatory alignment, making it easier for UK investors to fund green growth across the region.
This announcement follows last week’s unveiling of a new global coalition to massively scale up pre-arranged climate finance by 2035—a move spearheaded by Minister for Development Baroness Chapman at the 4th International Conference on Financing for Development in Sevilla. The UK is leading efforts to bring more climate finance into public markets, where it can be deployed at scale to meet growing demand.
Importantly, the UK will become the first country to track and publish, on an annual basis, the share of crisis finance delivered through prearranged systems. The goal is to steadily increase this percentage over time, recognizing that acting before disaster hits is more cost-effective and humane than scrambling to respond after the fact.
This marks a clear shift in how the UK sees its role in global climate leadership. Instead of viewing climate support as simply aid or charity, the government is aligning its climate strategy with its economic interests. Today’s gathering of Cabinet ministers and financial leaders signals a new level of ambition, viewing climate resilience and green investment not as separate goals, but as complementary aspects of each other.
By leveraging its position as a global financial powerhouse, the UK hopes to help vulnerable nations prepare for an uncertain climate future, while also ensuring that British workers and businesses are at the forefront of the green economic transformation that lies ahead.
