Governing climate neutrality through climate city contracts: Insights from twenty-five European cities

Mission-oriented innovation policy has become an influential framework for addressing complex societal challenges and is increasingly shaping urban climate governance through the European Union's Climate-Neutral and Smart Cities Mission. This paper examines how Climate City Contracts (CCCs) help cities address the principal governance barriers that constrain the transition to climate neutrality. A structured review of recent literature identifies seven recurrent governance gaps: institutional silos and systems integration; multi-level coordination; financing and institutional innovation; technical capacity and data; stakeholder participation and co-creation; ecosystem coordination; and climate justice and social acceptance. To examine how these challenges are addressed in practice, the paper analyses the Climate City Contracts of twenty-five European Mission cities. The results show that the main contribution of CCCs lies in their capacity to catalyse institutional innovation through governance arrangements designed to overcome systemic constraints. Across diverse urban contexts, six recurring families of governance instruments are identified: Mission Governance Structures, Portfolio Management Systems, Climate Finance Integration Instruments, Multi-Stakeholder Climate Platforms, Deliberative and Inclusive Participation Mechanisms, and Urban Innovation and Experimentation Platforms. Together, these instruments form an emerging governance architecture that enables cities to organise, finance, and implement climate-neutral transitions in systemic, adaptive, and socially legitimate ways. The paper contributes to research on urban sustainability transitions and mission-oriented innovation by showing how broad policy ambitions are translated into operational governance arrangements for climate neutrality at the urban level. • Climate City Contracts operationalize mission-oriented governance for climate neutrality. • Seven governance gaps shape the implementation of climate-neutral cities. • Twenty-five European cities reveal six recurring governance instrument families. • Climate City Contracts catalyse institutional innovation and systemic coordination.