Financing Sustainability at Scale With Tokenization
The numbers tell a story that institutional allocators can no longer afford to ignore. Climate action requires a threefold increase in annual investment flows from approximately $2trn in 2024 to an average of at least $6.3trn annually between 2024 and 2030, and a nearly fivefold increase to $9.2trn annually from 2031 to 2050 to avoid the worst impacts of climate change.
Analysis by the World Bank and the World Health Organization reveals that 4.5 billion people lack access to essential health services, with a projected funding shortfall of $176bn across the 54 poorest countries by 2030.
UN-Habitat data highlights an equally urgent challenge: 2.8 billion people currently live in inadequate housing, a figure expected to rise to 3 billion by 2030. To meet global housing needs, an estimated 96,000 new housing units must be built every day between now and 2030.
The global economic implications of these capital allocation gaps are material. McKinsey Global Institute analysis demonstrates that adequate investment in health access represents a USD 12 trillion economic opportunity, while inadequate health systems currently reduce global GDP by approximately 15% annually, roughly twice the economic impact observed during the 2020 pandemic. National Bureau of Economic Research findings indicate that global GDP could contract by 12% per 1°C increase in warming, quantifying the macroeconomic risk inherent to insufficient climate finance mobilization. Housing affordability constraints compound these challenges, destabilizing communities and constraining economic growth trajectories.
From an institutional allocation perspective, these are quantifiable risks to portfolio performance. The question facing market participants isn't whether sufficient capital exists globally to address these challenges. The question is whether the financial infrastructure can mobilize that capital in time, and at the scale required.
To close this financing gap, the largest coordinated mobilization of public and private sector capital in history must occur. Governments alone cannot fund the transition to a sustainable, inclusive global economy. Nor can private capital achieve impact at scale without de-risked, investable opportunities. Meeting climate, health, housing and development objectives requires strategic deployment of public capital to unlock institutional investment, absorb early stage risk, and crowd in sovereign funds, development finance institutions, pension funds, insurers, family offices and asset managers.
This mobilization cannot be achieved through traditional project finance or fragmented bilateral initiatives alone. It requires a systemic, digitally enabled, and globally scalable infrastructure that connects diverse sources of capital with credible, vetted opportunities. Tokenized financial infrastructure offers such a mechanism, embedding transparency, liquidity, and fractional access into its design from the outset.
Regulated tokenization: infrastructure purpose built for scale
What distinguishes regulated tokenization from previous sustainability finance innovations isn't the distributed ledger technology infrastructure. It's the combination of capabilities that traditional structures categorically cannot replicate: fractional participation enabling capital aggregation at unprecedented scale, automated compliance reducing operational friction, programmable impact reporting creating real time transparency, and global distribution channels accessing previously excluded capital pools from day one.
The real transformation emerges when regulated tokenization infrastructure combines with public sector capital. National reconstruction funds, development finance institutions, and multilateral organizations provide guarantees for tokenized social or green bonds. Tokenization then mobilizes global private capital pools newly accessible through fractional ownership and transparent impact verification mechanisms.
An illustration of how this can be applied: An issuer tokenizes a social bond to mobilise USD 1 billion to finance early stage, growth stage health science innovation and health science infrastructure. Governments offer a guarantee to de-risk the investment, within 48 hours of tokenized offering launch, wholesale investors, institutional allocators, and impact focused family offices globally fully subscribe to the tokenized social bond. Three months later, 10% of initial investors exit positions through secondary market transactions. The projects continue operating without disruption. New capital providers acquire exposure. Impact delivery continues. Capital continues flowing. This operational reality demonstrates why tokenization represents not marginal improvement but categorical transformation of sustainability finance infrastructure.
Strategic value creation
For governments and development finance institutions, tokenized finance offers mechanisms to multiply the impact of constrained public budgets, attract long term co-investors, and deepen the investable market for national sustainability priorities, from hydrogen infrastructure to healthcare facility development.
For institutional asset managers, tokenized products create new revenue models, enhanced distribution capabilities, and differentiated investor engagement opportunities, particularly in regions underserved by traditional infrastructure. From a risk adjusted return perspective, tokenization's structural advantages, reduced intermediation costs, enhanced liquidity premium, and broader investor participation, create pricing efficiency benefiting both issuers and allocators. As regulatory frameworks solidify and institutional confidence builds, these advantages compound.
Tokenization enables the creation of innovative investment vehicles that can incorporate government or development finance guarantees of principal repayment, providing a mechanism to de-risk and attract private capital in fractional, accessible lot sizes. This is not solely a matter of technology deployment, it represents a structural evolution of the global financial system to enable the mobilization of trillions in private capital, link local projects with global investment pools, and ensure transparency and accountability across every dollar directed toward sustainable outcomes.
The urgency is clear. Ample capital exists globally, and investor appetite, across both institutional and retail markets, is strong for investment vehicles that deliver measurable social impact alongside financial returns. What remains absent is the infrastructure capable of connecting this capital with opportunities at scale. Regulated tokenization provides precisely that missing infrastructure.
The question is no longer whether this transformation will occur, the evidence shows it is already underway. The question is which governments and organizations will lead, capture the competitive advantages it creates, and help define how capital flows to the world’s highest impact sustainability initiatives in the decades ahead.
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Marina Goche is CEO of AltDigitize
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The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group
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