Blockchain-based digital bonds and smart contracts can close the significant US$6 trillion annual gap in financing for climate and biodiversity goals, according to a recent report.

Digital bond issuance can dramatically reduce transaction costs, improve access for smaller issuers and accelerate settlement, creating a more inclusive, transparent and efficient market, finds the Green Digital Finance Alliance ( GDFA )’s Digital Impact Bonds: Where Finance Meets Tech for Impact report, published one week before the UN’s COP30 flagship climate conference in Belém, Brazil, which offers a blueprint for scaling high-integrity climate and nature finance through digital innovation.

The GDFA is a Swiss-based non-profit founded by the UN Environment Programme and Chinese fintech Ant Group, it says, “to develop global digital finance innovations that address climate, nature and biodiversity challenges by driving cross-sector collaborations”.

The report outlines concrete recommendations across seven pillars, from developing interoperable standards and funding digital measurement, reporting and verification ( dMRV ) systems, to promoting incentivized pilots and strengthening cross-sector collaboration.

Most notably, the integration of real-time dMRV systems, the report notes, could transform how environmental outcomes are tracked, reported and trusted. Taken together, these steps could turn digital finance into a trusted engine for global climate and biodiversity action.

However, without deliberate support and inclusive frameworks, the report warns, the shift to digital finance could deepen existing financial inequities.

Policymakers and market participants, the report points out, should standardize protocols, build capacity for underserved issuers, especially in the Global South, and fund robust impact verification infrastructure.

“With COP30 just days away, this is a call to action,” adds Gerrit Sindermann, the GDFA’s executive director. “Digital impact bonds are not a niche innovation. They’re a structural solution to the climate finance gap. But scaling them requires collaboration, trust and regulatory clarity.”