Our Take: Holding the Line - Leadership in Climate Finance When It Matters Most

Climate finance is entering a critical moment. The world needs leaders who can assess, adapt, and act. And right now, a precious few are rising to the challenge.

Written by: Jay Tipton

I’m writing this from Steamboat Springs, Colorado, where I’m sitting at the base of one of the American West’s most iconic ski mountains. Steamboat is open, but only about 30% of the terrain is accessible thanks to a winter that has been stingy with snowfall. Meanwhile, the East Coast has gotten hammered this winter with a series of winter storms. Welcome to the new normal: weather that has lost its predictability, its rhythm, its reliability.

Beside pondering the strange season, leadership has also been on my mind a lot lately. Partly because of our client work at GKS, where the question of who is willing to make a real commitment, hold a difficult position, or take a risk on something unproven comes up often. And partly because of what I’ve been reading about the state of the world, which has been, to put it gently, unsettling. A quiet mountain backdrop turns out to be a good place to sit with that, meditate, and think.

February has been a particularly instructive month for anyone paying attention to climate finance and policy. In the span of just a few weeks, we have watched governments retreat, institutions waver, and a handful of unlikely leaders step forward to hold the line. This is our take.

The Backdrop: A Planet Running Out of Time

Before we get into the political theatre, let’s ground ourselves in the science, because without it, the rest of this essay doesn’t make sense. Earlier this month, an international research team led by Oregon State University’s William Ripple published a sobering paper in the journal One Earth titled “The Risk of a Hothouse Earth Trajectory.” The message is far from subtle. Earth’s climate has now departed from the stable conditions that supported human civilization for millennia, and we may be flirting with a point of no return.

The paper synthesizes findings on 16 climate tipping elements, encompassing earth subsystems like the Greenland Ice Sheet, the Amazon rainforest, boreal permafrost, and the Atlantic Meridional Overturning Circulation (AMOC). It finds that several of them may be closer to destabilization than previously believed. Once tipped, these systems can trigger cascading feedback loops that amplify warming even if emissions are later reduced. In other words, there may come a point where it doesn’t matter what we do. As co-author Christopher Wolf put it: “averting the hothouse trajectory is far more achievable than trying to backtrack once we’re on it.”

Global temperatures have already exceeded 1.5°C above pre-industrial levels for 12 consecutive months. Carbon emissions rose by 1.1% globally in 2025, and in the United States alone they rose 2.4%. Meanwhile, I’m staring at a half-open ski resort, and the East Coast is under snow. The climate isn’t confused. Instead, it is reacting exactly as the science said it would. The question is whether leadership will respond in kind. This month, that answer has been, at best, mixed.

Where Leadership Is Failing: A Troubling Trifecta

I’ve written before in our Sliced newsletter about the importance of leadership in climate finance and how it has been increasingly harder to find. This month offered three perfect case studies on the matter.

The U.S. and the Shipping Carbon Tax

The International Maritime Organization spent years developing a Net-Zero Framework for shipping – over 3% of global emissions, 60-plus supporting nations, and an industry that was broadly on board. The Trump administration blocked the vote in October 2025 and is now circulating diplomatic cables to make sure it never comes back. The U.S. position paper calls for scrapping emissions penalties on LNG and terminating EU ETS coverage of shipping entirely. Not content to walk away, Washington is trying to tear down what it’s leaving behind.

The industry’s support for the framework was practical. Ships have 25-year lifespans. Operators making fuel investment decisions today need to know what the regulatory environment will look like in 2040. A global standard gave them that. Threatening sanctions on nations that voted yes and lobbying against the framework at the next IMO meeting does the opposite. Industry asked for clarity and instead the Trump administration offered chaos.

The European Union ETS Under Siege

Across the Atlantic, Italy’s Industry Minister Adolfo Urso called last week for a full suspension of the EU’s Emissions Trading System. By most measures, the EU ETS is a mechanism that has been incredibly successful. It has reduced covered emissions by 39% since 2005 and generated over €260 billion in revenues. However, the recent statements about the system have sent benchmark prices tumbling. Eleven EU member states backed the call in the name of competitiveness, and German Chancellor Friedrich Merz floated similar language before walking it back.

The competitiveness concern vis-à-vis the U.S. and China is legitimate and shouldn’t be dismissed. But there is a crucial difference between reforming a carbon market and suspending it. Companies that have already invested in cleaner production depend on the ETS price signal to justify those decisions. Sweden’s Deputy Prime Minister went on record stating that the ETS has been one of the EU’s most successful instruments. It can be adjusted. It should not be buried.

South Africa’s Near Miss

Heading into last week’s national budget, South Africa had climate market participants genuinely worried. Energy Minister Kgosientsho Ramokgopa had been publicly signaling a desire to halt the country’s carbon tax, which is a move that would have undercut a growing domestic offset market and rattled developer confidence across emerging market carbon policy. The budget came and went with no mention of a suspension. The market exhaled.

Whether this represents genuine conviction or a recognition that the tax is so embedded in South Africa’s Just Energy Transition Partnership – a multibillion-dollar international framework – that suspending it would cost more than it saves is almost beside the point. The carbon tax is set to rise to ZAR462 (USD 28.50) per tonne by 2030. If it holds, that’s a meaningful signal. For now, the outcome is a relief, and a reminder that sometimes leadership means simply not doing the thing you threatened to do.

Where Leadership Is Emerging

If the last few weeks have illustrated what a leadership vacuum looks like, they’ve also shown us where genuine leadership is quietly taking root. The contrast is striking.

Family Foundations Filling the Void

Our CEO Sean Penrith put it well on LinkedIn this month when he highlighted the Russell Family Foundation’s approach: “They are not treating climate as a side program. They are using their entire balance sheet.” He noted that the foundation leads with investments and supports that strategy with grants. This is a disciplined inversion of the typical philanthropic model. And crucially, they carved out an “aspirational” allocation for higher-risk catalytic investments, such as regenerative agriculture funds, community land vehicles, early climate enterprises, that can unlock other capital. As Sean put it: “This is how you crowd in capital. You commit first.”

The Russell Family Foundation has shifted 95% of its $100 million portfolio to mission-aligned investments, committed to a net-zero portfolio by 2035, and is spending at 10% of assets annually through 2027. CEO Kathleen Simpson framed it with a clarity that policy makers could stand to borrow: “If we invest now, versus waiting until later, will we have a better return on those dollars in terms of the climate impacts we’re trying to have?” That’s the carbon value of time. It’s also, at its core, what leadership in climate finance looks like.

GKS knows this model firsthand. We’ve supported the U.S. Endowment for Forestry and Communities as it built and refined its own impact investing program by mobilizing private capital into forest health, sustainable wood markets, and rural economic development. That work ties investment discipline to measurable environmental outcomes. The Russell Family Foundation is blazing a similar path. More institutions should follow.

An AI Company Holds a Line That Matters Beyond Its Own Industry

This one may seem like a detour but please bear with me. Last week, Anthropic CEO Dario Amodei refused to accept what the Pentagon called its “last and final offer.” It was a demand that Anthropic allow unrestricted use of its AI model Claude, including potentially for mass surveillance of American citizens and fully autonomous weapons. Amodei’s response was that his company “cannot in good conscience” accede to that request, even if it means losing a $200 million defense contract.

Why mention this in a climate finance essay? Because AI is increasingly embedded in climate finance in many forms, such as portfolio risk modeling, carbon credit verification, supply chain emissions tracking, and project due diligence. The question of who controls AI and under what conditions has real implications for climate work. More broadly, Amodei’s stand is a reminder that leadership isn’t just about doing the comfortable thing. It means drawing a line – clearly, publicly, at potential cost to your business – because some lines shouldn’t be crossed. In a week when so many others were folding, this offered inspiration.

What Real Leadership Actually Requires

The hothouse Earth paper’s closing call is not for despair but for a course correction. That framing matters because we’re not yet locked in. However, the window is closing. The scenarios where we avoid the worst outcomes all require scale, haste, and coordination, which is exactly what is missing at the macro level right now.

What the U.S. is doing at the IMO is both withdrawal and sabotage of the collaboration infrastructure that most everyone else is trying to build. Italy’s call to suspend the ETS is both a reform conversation and a retreat from the one price signal that makes the low carbon transition pencil out.

Real leadership in this space means holding complexity without using it as an excuse for inaction. It means being creative when the policy environment won’t cooperate. It means working together across sectors even when that’s inconvenient. The right response to a flawed carbon market is to improve it, not dismantle it. The right response to a retreat in global policy is to fill the gap with brave capital, institutional leadership, and the kind of long-game thinking that bold funders can sustain even when governments can’t.

February 2026 will not go down as a high-water mark for climate leadership. But it has reminded me of something important. Leadership in this space can come in many different forms and from some pretty unexpected places. This month proved that leadership is still alive and that the science is not in dispute. The only variable left is whether more leaders are willing to hold the line when it counts.