Why Climate Funds Underinvest in Communications, and What It Costs Them

The 1% Problem

Climate finance is having a remarkable decade. Global climate investment reached $1.8 trillion in 2023, according to the Climate Policy Initiative. Green bond issuance exceeded $500 billion. Blended finance structures are mobilizing private capital at ratios of 8:1 and higher. The Glasgow Financial Alliance for Net Zero counts over 675 member firms representing more than $130 trillion in assets.

And yet, the sector has a communications problem that almost nobody talks about, because the people who would talk about it are the ones who have not hired anyone to do so.

Most climate funds allocate less than 1% of their operating budgets to communications. Not 1% of AUM, but 1% of operating expenses. For a $200 million fund running on a 2% management fee, that means roughly $40,000 per year directed toward the entire function of explaining what the fund does, why it matters, and why investors should commit capital to it.

Compare that to the broader private equity landscape, where the average fund allocates 2-3% of operating budget to marketing and communications. Or to the sustainable finance PR market itself, which has grown to $3.5 billion annually and is expanding at an 18% compound annual growth rate. There is a booming industry built around communicating sustainability, and the organizations that most need it are the least likely to invest in it.

The climate finance sector has world-class investment strategies and amateur-hour communications. That gap is not just an inconvenience. It is a capital formation problem.

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The Technical Excellence Trap

To understand why climate funds underinvest in communications, you have to understand the culture they emerge from. Climate finance sits at the intersection of development economics, environmental science, and institutional investing. The people who build these funds are, overwhelmingly, brilliant technicians: structurers, impact measurement specialists, policy experts, engineers turned investors.

They have spent their careers in environments where rigor speaks for itself. In academic research, a well-designed study earns recognition. In development finance, a well-structured blended finance vehicle attracts co-investors through its engineering. In impact investing, the theory of change is the thing.

This produces what we call the technical excellence trap: the deeply held belief that if the work is good enough, the right people will find it.

They will not.

The belief is understandable. It is also empirically wrong. Edelman Smithfield's 2024 institutional investor research found that 46% of LPs now rank GP reputation above returns when making allocation decisions. Ninety-eight percent check a manager's digital presence before taking a meeting. Seventy-three percent of institutional investors say that the quality of ESG disclosure directly affects their allocation decisions.

These are not soft metrics. They are capital allocation filters. And they filter against funds that assume their track record speaks for itself.

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What Underinvestment Actually Costs

The costs of communications underinvestment do not appear on a fund's financial statements. They show up in slower fundraising cycles, lower LP conversion rates, weaker pipeline development, and missed opportunities for market positioning. They are real, they are significant, and they compound.

Slower fundraising cycles

Climate-focused funds now take an average of 20.2 months to close a fundraise, according to PitchBook data. That is nearly two full years of GP time, travel, and operational cost directed toward capital raising rather than capital deployment. For emerging managers, those raising their first or second fund, the timeline can stretch past 24 months.

Not all of that delay is attributable to weak communications. Market conditions, LP budget cycles, and the inherent complexity of climate strategies all play a role. But communications failures add friction at every stage. A pitch narrative that does not land clearly adds one more meeting to the process. An inconsistent digital presence raises questions that take time to resolve. A fund that cannot articulate its thesis in plain language spends more time in due diligence explaining what should have been self-evident from the materials.

Each additional month on the fundraising trail has direct costs: not just in time and travel, but in opportunity cost. Capital that could be deploying into climate infrastructure, clean energy, or nature-based solutions sits on the sideline while the GP explains, re-explains, and re-re-explains.

Weaker LP conversion

The relationship between communications quality and LP conversion is difficult to quantify precisely, but the directional evidence is overwhelming. Sixty-eight percent of LPs say they want more transparency on impact metrics from their climate fund managers. Seventy percent of GPs name LP reporting as their single greatest operational challenge. Eighty-five percent of LPs have rejected a deal based on operational concerns alone.

Communications is the connective tissue of the LP relationship. It shapes first impressions, sustains engagement during diligence, and determines whether a prospective investor becomes a committed one. When that connective tissue is thin (when the quarterly update is a hastily formatted PDF, when the website looks like it was built in 2018, when the GP has no public thought leadership presence) the LP does not necessarily say "your communications are weak." They say "we're not comfortable with the operational maturity of the platform." The diagnosis is different. The result is the same.

Missed thought leadership positioning

Climate finance is a sector where intellectual authority matters enormously. The organizations that shape market narratives (Climate Policy Initiative, Convergence, the IFC, GFANZ) do so in large part through communications: research publications, conference keynotes, media commentary, and sustained content production.

Fund managers who do not invest in thought leadership cede that terrain entirely. They become invisible in the conversations that shape LP perception, policy direction, and market sentiment. Over time, this invisibility compounds into a structural disadvantage. When an LP is evaluating two climate PE funds with comparable track records, the fund whose GP is a recognized voice in the space, publishing analysis, speaking at Responsible Investor conferences, quoted in BloombergNEF, has a credibility premium that the silent fund cannot match.

That premium is not vanity. It is a fundraising accelerant.

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The Numbers Behind the Narrative

Several data points help quantify the scale of this problem:

• $3.5 billion: the annual sustainable finance PR and communications market, growing at 18% CAGR. This growth is being driven by asset managers, corporates, and institutions that have recognized the connection between communications investment and capital formation.
• 73% of institutional investors say that ESG disclosure quality affects their allocation decisions. For climate funds, whose entire thesis depends on ESG and impact credibility, this is not a peripheral consideration. It is a gating factor.
• 46% of LPs rank GP reputation above returns when making allocation decisions, per Edelman Smithfield. Reputation is built through sustained, deliberate communications, not through pitch decks alone.
• 68% of institutional investors want more transparency on impact metrics from their fund managers. The demand for better communications is coming directly from the people writing the checks.
• 94.3% of all private capital raised in H1 2025 went to managers with four or more funds under management. Emerging climate managers, who arguably need communications infrastructure the most, are competing for the remaining 5.7% of capital. In that contest, every signal of institutional maturity matters.

The market is telling climate fund managers exactly what it values. The question is whether they are listening, or whether they are still assuming the work speaks for itself.

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Why Climate Funds Are Structurally Prone to This Problem

The underinvestment in communications is not random. It follows from several structural features of climate finance that make it particularly susceptible to the technical excellence trap.

Mission-driven founders. Many climate fund managers came to investing through a conviction about climate change, not through a career in asset management. Their instinct is to lead with impact, not with narrative. The idea of "marketing" feels antithetical to the seriousness of the mission. What they often fail to recognize is that strategic communications is not marketing in the superficial sense. It is the discipline of translating complex, important work into language that compels action.

Lean operating structures. Climate funds, especially emerging managers, typically run lean. A team of four to eight people is handling deal sourcing, diligence, portfolio management, LP relations, compliance, and reporting. Communications is either nobody's job or everybody's afterthought. The first dedicated communications hire, if it ever comes, usually arrives after the second or third fund, by which point years of positioning opportunity have been lost.

Complexity of the subject matter. Blended finance structures, concessional capital mechanics, TCFD alignment, Article 9 classification, nature-based carbon credit methodologies. Climate finance involves concepts that are genuinely difficult to communicate. Many fund managers, when faced with the challenge of simplifying their work, default to not communicating at all rather than risk oversimplification. The result is silence, which LPs interpret not as humility but as opacity.

Perception that communications is discretionary. Legal counsel is a non-negotiable fund expense. Fund administration is a non-negotiable expense. Audit is a non-negotiable expense. Communications, somehow, remains optional, despite the fact that it directly influences the fund's ability to raise capital, maintain LP confidence, and build the institutional reputation that supports every subsequent fundraise.

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What a Communications-Mature Climate Fund Looks Like

The intent here is not simply to diagnose a problem but to outline what the solution looks like in practice. A communications-mature climate fund, one that treats communications as infrastructure rather than overhead, typically exhibits several characteristics.

A defined strategic narrative

Not a tagline. Not a mission statement. A narrative framework that articulates why the fund exists, what structural market opportunity it addresses, why the team is uniquely positioned to capture it, and how the fund's climate thesis translates into risk-adjusted returns. This narrative is consistent across every touchpoint: the pitch deck, the website, the quarterly update, the GP's LinkedIn presence, the AGM presentation. Consistency does not mean repetition. It means coherence.

Regular, substantive thought leadership

The GP or a senior team member publishes analysis on a regular cadence, at minimum monthly. Not promotional content. Not recycled press releases. Original thinking on the market, the sector, the regulatory landscape, or the investment dynamics that inform the fund's strategy. This content serves multiple functions: it demonstrates intellectual depth to prospective LPs, it builds the GP's reputation as a sector authority, and it provides a natural touchpoint for staying visible in LP networks between formal reporting cycles.

LP communications architecture

Quarterly updates that go beyond financial tables to include contextual market analysis, portfolio company narratives, and strategic commentary. Annual reports that function as credibility documents, not compliance artifacts. A digital investor portal that is current, well-organized, and accessible. Reporting that anticipates LP questions rather than waiting for them to be asked.

Professional digital presence

A website that reflects the quality and seriousness of the fund's work. Social media, primarily LinkedIn, that is active, substantive, and consistent. A digital footprint that, when an LP searches for the fund or the GP, returns results that reinforce credibility rather than raising questions about whether the organization is real.

A communications line item in the budget

Perhaps the simplest and most telling indicator: the fund has an actual budget for communications. Whether that is an in-house hire, a fractional communications lead, or an external partner, the commitment is explicit, not improvised. The fund treats communications with the same seriousness it brings to legal, compliance, and fund administration.

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The Cost of Continued Silence

Climate finance is entering a period where the competition for institutional capital will intensify. The number of climate-focused funds is growing. LP allocations to sustainable strategies are increasing but becoming more selective. Regulatory scrutiny (SFDR, TCFD successor frameworks, TNFD) is raising the bar for disclosure and transparency. The funds that survive and scale will be those that can clearly, consistently, and compellingly articulate what they do and why it matters.

The funds that cannot will not necessarily fail. They will simply raise less, raise slower, and build weaker institutional positions than their potential warrants. The quality of their work will be undermined by their inability to communicate it. And in a sector where the stakes, for the climate, for the communities affected, for the transition itself, are genuinely existential, that underperformance is not just a business problem. It is a problem for the broader mission.

Billions of dollars in climate capital are being deployed by organizations that have not invested in explaining what that capital is doing, why it matters, or how it performs. The market rewards clarity. The climate rewards action. Communications is where those two imperatives meet.

The question for every climate fund GP reading this is straightforward: can you afford to keep spending less than 1% on the function that determines how the other 99% of your work is understood?

At Symbiont Communications, we work with climate funds, DFIs, and impact investors to build the communications infrastructure that matches the quality of their investment strategies. Not marketing. Not PR spin. Strategic, sector-fluent communications for organizations whose work deserves to be understood as well as it is executed.

The conversation is worth having. The silence is not.