Subnational governments play a crucial role in the climate transition, accounting for approximately two-thirds of climate-significant public expenditure across the OECD and the EU. While subnational governments are sometimes innovators in green finance, many struggle to meet their green investment needs, facing challenges in mobilising funding and financing. Despite the growing use of green, social, and sustainable bonds, subnational issuances account for less than 10% of issuances. This report provides a broad framework to support regional and local governments to better mobilise diverse funding and financing instruments for achieving climate and environmental objectives. Applicable to subnational governments of all sizes, the framework is complemented by selected good practices.
