Richard Threlfall on Why the Climate Finance Gap Persists

Capital flows to comfort. The places that need climate finance most are still the hardest places to invest. 

London is a place where money sits and pools. As one of the world's foremost financial hubs, it is home to billions of pounds earmarked for the climate transition. The money exists, is ready, and is looking for somewhere to go.

And yet the lights in rural Southeast Asia still run on coal.

This is not a story about a shortage of money. It is a story about a shortage of readiness. It’s about the long, complicated distance between capital that wants to move and projects that are ready to receive it. 

Developing countries are where the need for climate finance is greatest, and where the growth potential is highest. They are also, by almost every measure, the hardest places to get a project off the ground.

Richard Threlfall has spent decades watching this gap from the inside. As former Global Head of Infrastructure and Transport at KPMG, one of the Big Four accounting and professional services firms, he has sat at the tables where these decisions are made, and watched billions of dollars move, or fail to move, toward the energy transition. 

"It often takes a long time to get projects ready," Threlfall says. Permits. Land rights. Supply chains. Construction capacity. The list is long and the timeline is longer. Building a bankable renewable energy project from the ground up takes years, and that is in the best conditions. "That's more of a bottleneck than climate finance."

In other words, the queue isn't on the capital side. It's on the project side. And this distinction matters enormously, because it reframes the problem. The question is no longer: how do we unlock more climate finance? It is: how do we build more projects that are ready to receive it?

In Southeast Asia, that question is harder to answer than almost anywhere else. Permitting regimes vary wildly by country. Land rights are frequently disputed. Grid infrastructure is patchy and overwhelmed. And in markets where the rule of law is uncertain, the risk that investors attach to a project can make it seem unviable before construction has even begun. 

Preparation is the price of entry. "If the project is well prepared and ready to go," Threlfall notes, "then it's relatively straightforward to access very, very large sums of money." The capital does not discriminate by geography, in theory. In practice, it discriminates by certainty. This translates into a higher 'cost of capital’ where a project in Vietnam must prove it can earn double the returns of a project in Wales just to justify the perceived risk. 

In Southeast Asia, uncertainty is not the exception. For many developers, it is the operating environment.

The projects are there. Developers across the region are doing the slow, unglamorous work of achieving bankability by navigating bureaucracy, building local relationships, assembling the documentation that turns an energy ambition into something big-name investors will touch. They are smaller than the flagship infrastructure deals that move through the City. They are less visible. They are harder to find from a desk in London.

Project readiness is only part of the story. The system that decides which projects are worth financing in the first place is just as important. Unfortunately, the institutions controlling capital are not built to prioritise the transition.

Threlfall worked on the commercial and financial aspects of mega projects for KPMG, and in 2022 he was asked to take on the global leadership of sustainability at the company. Driving sustainability at big corporations is challenging because “they work in a financial, commercial, even legal construct, which is all about profit maximisation.” 

People become trapped by the construct of the market in which they work. Climate action becomes “Small change in spare time, rather than core to their purpose.”

I have been sitting with a question that has no clean answer: where does responsibility for the climate transition fall? On governments, who set the conditions? On corporations, who move the capital? On both, in proportions nobody has agreed on?

KPMG is not a passive institution. It moves billions of dollars through the global economy each year. The commercial and financial advice it gives shapes which projects get built and which do not, which risks get taken and which get priced out.

Threlfall's answer, drawn from his time inside one of these institutions, is revealing. Many corporations, he says, view the transition as a government problem. Their job is to operate within the law. If the law does not require them to prioritise sustainability, most will not. "Unless the law requires it" is not a cynical position. It is, within the logic of the market, a rational one.

But rational and sufficient are not the same thing. The law has not kept pace with the emergency. And in the gap between what corporations are required to do and what the climate transition actually demands, an enormous amount of necessary action is quietly not happening.

There is no villain in this story, which makes it harder, not easier, to resolve. The capital exists. The need exists. There are people trying to bridge the two. Developers are navigating permits in Manila, financiers are scanning deal flow in the City, former KPMG partners are asking uncomfortable questions from the inside. 

What exists between them is a set of structures that were not designed for this moment, and have not yet been redesigned to meet it. 

Threlfall left KPMG. He is still asking the questions. That, in its way, is where most of the important work happens. Not in the announcements, but in the long, patient effort of people who have seen the system from the inside and chosen not to stop trying. 

Sierra Circle is one small part of that effort. This is the first of many conversations. 

The gap is real. So is the work being done to close it. The distance is not, after all, geographical.