MPs have opened a major inquiry into how effectively the UK is funding climate action overseas, amid growing concerns over transparency, value for money and the

true scale of government spending.

The International Development Committee confirmed today it will scrutinise the UK’s International Climate Finance (ICF) programme, which is designed to help low-income countries tackle the effects of climate change. The inquiry will assess whether current funding is delivering meaningful results on the ground and whether future commitments can be made more effective.

The UK’s climate finance pledge dates back to the 2009 COP15 summit in Copenhagen, where wealthy nations agreed to collectively provide $100 billion a year by 2020 to support vulnerable countries. A decade later, the UK pledged £11.6 billion in international climate finance between 2021 and 2026.

Although the government has repeated its commitment to that target, the credibility of the pledge has been questioned. A 2024 review by the Independent Commission for Aid Impact found that ministers had “moved the goalposts” by reclassifying existing aid as climate finance. Meanwhile, the Carbon Action Tracker this year labelled the UK’s contribution as “highly insufficient”.

With a new funding commitment due to be announced for the 2026–2030 period, MPs will also examine how climate finance planning is being affected by cuts to the wider aid budget and shifting development priorities.

Recent scrutiny has intensified following reports that British International Investment, the government’s development finance institution, has invested millions in energy companies such as Globeleq, which still generates electricity from fossil fuels across seven countries.

The committee is now calling for evidence from development experts, academics and government officials. Key areas under examination include the impact of aid cuts on climate pledges, how ICF projects are selected, the effectiveness and transparency of spending, and whether government departments are properly coordinating their efforts.

MPs will also consider whether loans are the right tool for delivering climate finance, and what long-term consequences debt-based support may have for low-income nations.

The full terms of reference for the inquiry have been published on the committee’s website. Photo by UK Parliament, Wikimedia commons.