“Transition Finance. Reflections from the Madrid Conference. 6 November 2024.” was published on 5 August 2025 in the EBI Working Paper Series No. 197.

On the 6 November 2024, the International Conference Transition Finance: Legal and Regulatory Challenges, took place in Madrid at Universidad Carlos III de Madrid, Campus Puerta de Toledo, under the Grant TED2021-130293B-100, Climate Change and Sustainable Finance, funded by MCIN/AEI/ 10.13039/501100011033 and by the European Union NextGenerationEU/PRTR.

As the World faces climate change and other environmental challenges, and developing countries dramatically increase their energy needs, governments’ funding looks insufficient to fill the gaps. Different jurisdictions and supranational entities have made great efforts to establish a sound institutional framework for “sustainable” investments, but this has not resulted in a dramatic pivot away from “brown” and towards “green” investments. “Transition Finance” is key to shift focus to the financing of investments compatible with and contributing to the transition, while avoiding lock-ins. In the EU this can include “sustainable” investments, as well as investments in entities or activities with “credible” transition plans or science-based targets. However, the concept of “transition finance” varies across geographical areas and actors. This makes it challenging to use it as a basis for a pivot in market practices, transaction structures, governance mechanisms,and applicable rules for corporates, financial institutions and public entities, including regulators and public development banks.

The Madrid conference seeks to discuss different ideas of “transition finance” and its key concepts, identify the role of different actors, discuss trends, and identify best practices, and how they can inform market practice, regulation and law.