This study investigates the effectiveness of Climate-Related Financial Policies (CRFPs) in influencing financial institutions' climate finance commitments and their actual investment behaviors globally. Despite increasing regulatory efforts to align financial markets with climate objectives, significant discrepancies exist between institutions' formal commitments and capital allocation practices. Employing a Generalized Linear Mixed Model (GLMM) and panel quantile regression methodologies, the analysis leverages the Net Zero Finance Tracker (NZFT) dataset from the Climate Policy Initiative (CPI), providing comprehensive insights into climate-related targets, policy engagements, and investment patterns across different financial institution types. The findings reveal that while stronger CRFPs significantly increase institutions' formal climate commitments, disclosure, and policy engagement, they inadequately constrain fossil fuel financing or drive meaningful shifts toward climate-aligned investments. Institutional responses are heterogeneous and strongly influenced by operational characteristics and macroeconomic conditions, such as market liquidity, credit availability, and inflation rates. These results underscore the critical limitations of current regulatory frameworks and highlight the necessity for integrated policy approaches that combine stringent enforcement mechanisms with targeted incentives to effectively channel financial flows toward substantial decarbonization.