Photo: European Space Agency
In this week’s roundup: Jamaica’s catastrophe bond faces a real-world test after Hurricane Melissa’s devastation, Christine Lagarde urges EU to move faster on the green transition for security and inflation control, as the World Bank commits to host Brazil’s major tropical forest fund.
Catastrophe bond in spotlight as Hurricane Melissa slams Jamaica
Hurricane Melissa – now among the most powerful Atlantic storms ever recorded – made landfall in Jamaica on Tuesday, causing widespread destruction and prompting expectations that the country’s US$150mn parametric catastrophe bond, arranged by the World Bank, will deliver a full payout.
The bond, covering Jamaica until 2027, triggers based on storm intensity and location, offering critical liquidity for rapid disaster response. Prime Minister Andrew Holness outlined a multi-layered disaster risk financing strategy including this bond, Caribbean Catastrophe Risk Insurance Fund insurance, and Inter-American Development Bank contingent credit. Officials have not yet confirmed activation, but observers expect the parameters to have been met.
Whether the bond, which yields about 7% annually to investors, pays out represents a test for such instruments which are designed to support swift recovery for climate exposed nations.
Lagarde pushes for capital markets union to boost EU energy transition
Christine Lagarde, president of the European Central Bank, has called for faster progress on EU clean energy for better as a key inflation management strategy, implying Europe’s long-awaited capital markets union (CMU) may be “the missing link” for scaling private finance. The CMU is an EU initiative launched in 2015 to create a single market for capital across all member states.
Delivering a keynote at Norges Bank’s climate conference, Lagarde warned that Europe’s reliance on imported fossil fuels is “no longer sustainable”, highlighting geopolitical risks and volatility in the wake of sanctions on Russian fossil fuels.
She highlighted the subsequent, persistent, and inflationary consequences of resulting gas price shocks and called for an integrated EU electricity market to maximise the continent’s renewable potential.
Lagarde said that only clean energy can deliver energy security, sustainability, and affordability, and delivering it will require at least €150bn per year for renewables and grid infrastructure alone. She emphasised the need for a deepened capital markets, and that private sector capital must provide two-thirds of the annual transition costs. At present, debt and equity finance are the least utilised green investment sources.
She highlighted risks around critical minerals and urged policymakers to create a stable policy environment by sticking to climate targets and implementing tax reforms to support the green transition.
World Bank to host tropical forest protection fund
The World Bank has confirmed it will act as trustee and interim secretariat for the Tropical Forest Forever Facility (TFFF), in what Fernando Haddad, Brazil’s minister of finance, described as a milestone for the Brazil-led initiative. The fund aims to be the world’s largest dedicated forest fund and is set for a major launch at Cop30 in Belém next month.
Brazil has pledged $1bn and the facility’s initial operations will be supported by 10 partner countries. The 18-country governance board will include equal representation from investor and forest states, as well as an advisory council of Indigenous Peoples and local communities.
Once operational, the facility’s performance-based structure could eventually generate up to $4bn annually, according to environment minister Marina Silva. The fund will reward verified reductions in deforestation with continuous payments that include disbursements to local stakeholders through a direct financing mechanism. At least 20% of payments are earmarked for Indigenous Peoples and local communities.
Foreign minister Mauro Vierira said the TFFF “is proof that multilateralism can be renewed and offer concrete and transformative solutions”. Civil society groups, including Greenpeace, have previously praised the initiative while calling for strengthened transparency and robust stakeholder involvement.
ExxonMobil sues California over climate transparency laws
ExxonMobil has filed suit in a Californian court, arguing that the state’s two new climate disclosure laws – SB 253 on emissions and SB 261 on climate risk – violate its first amendment rights by compelling companies to disclose information in a manner mandated by the state.
California senator Scott Wiener, a sponsor of California’s reporting rules, said Exxon’s arguments would undermine established disclosure requirements nationwide.
The challenged laws require all large businesses operating in California to report global greenhouse gas emissions, including scope 3, and release forward-looking climate risk assessments every two years.
ExxonMobil’s complaint argues that these rules assign “disproportionate” responsibility to large firms and that disclosure rules force firms to push “misleading and misguided” public narratives. The lawsuit runs parallel to ongoing litigation led by the US Chamber of Commerce which also centres on first amendment claims, with a trial expected in October 2026.
Impact assessments required for new European oil and gas projects
The European Court of Human Rights has ruled that states must perform comprehensive environmental impact assessments (EIA) prior to authorising new oil and gas projects. This should include all “cumulative” downstream emissions from fossil fuel combustion, not just direct operational output.
The result was the result of a nine-year Norwegian litigation battle from civil society groups challenging Arctic oil licensing under human rights obligations. While the court did not annul the Barents Sea licences in question, it declared that states must conduct adequate, timely and comprehensive EIAs under national and international law. As part of this obligation, both direct and downstream (scope 3) emissions must be quantified.
The ruling, following an advisory opinion from the European Free Trade Advisory court, sets a new precedent: national governments now face more rigorous judicial scrutiny and may have to revisit or modify extraction approvals that omit scope 3 emissions.
Research
Adaptation KPIs in Infrastructure’s Sustainability-Linked Finance
In this discussion paper, the IFC sets out a five-step method for developing adaptation KPIs in sustainability-linked loans and bonds for infrastructure. Using a case study from Peru, it demonstrates how climate risk assessment, baselines, tailored targets and rigorous monitoring can boost climate resilience and unlock innovative finance.
A Coherent Framework for Sovereign Debt and Economic Transformation
This working paper argues that global south debt crises are structural, rooted in long term cycles of economic dependence. It calls for a new debtors’ coalition centred on food sovereignty, energy independence and regional industry, leveraging collective resources to reshape global finance and escape the creditor-led status quo.
This page was last updated October 30, 2025
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
