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Image: Global Innovation Lab for Climate Finance
The Global Innovation Lab for Climate Finance has launched six new financial instruments for climate-related projects in developing countries; while the World Economic Forum has convened public and private partners to launch the Coalition for Climate-Resilient Investment.
Image credit: Global Innovation Lab for Climate
The Global Innovation Lab for Climate
Finance has launched six innovative
climate-related projects in developing countries.
The Lab — an initiative of over 60 public and private investors and
institutions, launched in 2014 — accelerates much-needed investment solutions to
support developing countries to meet their climate change and sustainable
development goals; the Lab has now launched 41
instruments that have collectively
mobilized nearly US$2 billion for action on climate change and sustainable
Lab Members — high-level
leaders from both the public and private sectors who contribute expertise, and
political and financial capital to selected instruments — drive the Lab’s
activities, including selection, development and endorsement of the solutions.
“Sustainable investment is critical as we tackle the key global challenges of
the 21st century — and the Lab is a leading force in successfully mobilizing
investment to accelerate climate action,” said Antha Williams, Head of
Environment at Lab Member Bloomberg Philanthropies. “At Bloomberg
Philanthropies, we support initiatives that bring to life Mike Bloomberg’s
vision of harnessing data to ensure better, longer lives for the greatest number
of people. The Lab embodies this mission, and we’re excited to watch as these
innovative finance instruments help drive action on climate change and
After a 7-month period of analysis, stress-testing and design, the six
enterprises in the Lab’s 2019 class are ready to launch their pilots and have
the potential to drive significant investment for sustainable development.
The solutions target four focus areas in climate mitigation and adaptation:
Restoration Insurance Service Company
by Conservation International, is a social enterprise that invests in
mangrove conservation and restoration in areas with high-value coastal assets,
protecting blue carbon and reducing coastal flooding and property damage risk.
Insurance companies will pay an annual fee for these services and blue carbon
credits will be sold. The initial pilot project will protect 4,000 hectares of
mangrove forest in the Philippines. At scale, RISCO has the potential to
achieve avoided emissions and sequestration of 16 million tonnes of
CO2, equivalent to the annual electricity use of over 2 million homes.
Blockchain Climate Risk Crop
(led by Sprout Insure) is a standardized, digital index insurance platform for
smallholder farmers in sub-Saharan Africa that increases resilience in the
face of climate change and extreme weather events. It increases access to crop
insurance by making the instrument more available and scalable through
standardization; and by increasing demand through lower premiums, and faster and
more transparent payouts. The pilot targets 1.2 million farmers in Kenya.
The West African Initiative for Climate-Smart
a blended finance fund to support the uptake of climate-smart agriculture by
providing technical assistance and subsidized-rate loans or guarantees to
smallholder farmers in West Africa. At scale, it has the potential to reach
90,000 smallholder farming households, and convert 185,000 hectares to
climate-smart agricultural lands. Led by the Economic Community of West African
States (ECOWAS), which has already pledged US$16 million to the fund, and to
be implemented by the ECOWAS Bank for Investment and Development (EBID), which
has pledged US$10 million to the fund.
“IFAD has partnered with the Lab because we know how business solutions are
important for addressing issues related to the increasing climate impacts on
smallholder farmers and agriculture in Africa,” says Margarita Astralaga,
Director of the Environment, Climate, Gender and Social Inclusion Division at
International Fund for Agricultural Development (IFAD). “The Lab’s
innovative mechanisms show how big of an opportunity there is for the private
sector to take a more central role in accelerating sustainable agriculture,
particularly in West and Central Africa, home of many of the world’s
Cooling as a
Service aims to
decrease energy consumption and greenhouse gas emissions from cooling use in
cities through a pay-per-service model for more efficient cooling systems. The
model could save customers more than 20 percent in lifetime spending on cooling
equipment and could provide up to 30 percent more profit for technology
providers than the sale and operation of low-efficiency cooling systems. CaaS is
led by Basel Agency for Sustainable Energy and the Kigali Cooling
Efficiency Program, which have made significant progress towards initial
implementation in the Dominican Republic and Jamaica, and are pursuing
three to four larger flagship implementation projects, likely including South
Africa, India and Mexico.
The Breathe Better
is a bond, paired with technical assistance, for city governments in developing
countries to fund sustainable infrastructure projects that reduce both air
pollution and greenhouse gas emissions. If deployed in just 10 cities, it has
the potential to mobilize over US$4 billion for sustainable infrastructure,
significantly improve health related to air quality, and reduce CO2 emissions by
an estimated 35 million tons — equivalent to removing 7.4 million cars from
roads for a year. These numbers can grow significantly if the bond is deployed
in 50 or more emerging-market cities.
Solar Securitization for
Rwanda, led by
the Development Bank of Rwanda, is a tradable solar asset-backed security
that can accelerate the deployment of solar home systems in East Africa, by
helping solar developers reduce their leverage and access capital for expansion.
At scale, it can provide clean energy access to two million households in Rwanda
and neighboring countries, translating into a US$100 million instrument.
“Financial innovation will be crucial in accelerating clean energy access for
the hundreds of millions who still lack a reliable source of electricity,” said
Lorenzo Bernasconi, Managing Director of The Rockefeller Foundation.
“The Lab is helping to develop and deploy marketable solutions to fill this gap,
helping to overcome one of the greatest barriers to universal energy access.”
Later this month, the Lab will open a call for ideas for next year’s cycle,
where it will be targeting more ideas to drive investment for climate action in
The Lab is funded by the Australian Department of Foreign Affairs and Trade,
Bloomberg Philanthropies, the German Federal Ministry for the Environment,
Nature Conservation, and Nuclear Safety (BMU), GIZ, the International Fund for
Agricultural Development (IFAD), the Netherlands Ministry for Foreign Affairs,
The Rockefeller Foundation, Shakti Sustainable Energy Foundation, and the UK
Department for Business, Energy & Industrial Strategy. Climate Policy Initiative
serves as Secretariat.
Image credit: Mariamichelle/Pixabay
The World Economic Forum has partnered with the governments of the United
Kingdom and Jamaica; global advisory, broking and solutions company
Willis Towers Watson; and the Global Commission on Adaptation to launch
the Coalition for Climate-Resilient
a financial-sector led initiative that aims to transform infrastructure
investment by integrating climate risks into decision-making and
driving a shift toward a more climate-resilient global economy. The Coalition
brings together more than 30 organizations across the investment value chain.
Climate change will impact on all aspects of society and will pose the biggest
challenges to the world’s most vulnerable. In a warming and unstable climate,
events such as the recent California
and Hurricane Dorian are more likely to occur and will gain in power.
Extreme weather poses an existential threat to the world's most vulnerable
nations, but also to the world’s most advanced economies’ critical
The first-of-its-kind, financial-sector-led initiative brings together over 30
organizations across the investment value chain to address climate resilience
challenges. Chaired by Willis Towers Watson CEO John Haley, the coalition
aims to transform infrastructure investment by integrating climate risks into
decision-making, driving a shift toward a more climate-resilient economy for all
countries, including the most vulnerable.
"This new coalition realizes that current efforts to adapt to physical climate
risks and deliver resilience for exposed communities and assets across the globe
are severely lacking and need to be addressed urgently,” Haley said. “The
conditions for success are ripe; the coalition will be able to harness a unique
combination of the rapid advancement of climate risk analytics coupled with
ambitious regulatory and investor-led initiatives. Pricing the risks posed by
climate change will create opportunities to build a network of resilient
infrastructure in high, medium- and low-income countries, enabling us to better
prevent future human and financial disasters.”
There is a crucial need to develop new sources of data and analytical tools to
better understand the risks posed by climate change to our societies and
economies. This will enable us to better address these risks, preventing future
human and financial disasters. Infrastructure enables the flow of goods,
services and people which allow societies to thrive. Properly pricing climate
risk in financial decision-making will align investment flows towards
infrastructure capable of withstanding a changing climate. Providing a
methodology to quantify the economic and financial benefits will provide a
substantial and critical incentive for financial markets to embed resilience
As Andrew Steer, President and CEO of the World Resources Institute, and
Commissioner of the Global Commission on Adaptation, pointed out: “Making infrastructure resilient to climate change has been regarded for too
long as a burden and a cost. In reality, it’s a high-return investment, yielding
on average a 4-to-1 return. It also saves lives, reduces risks, and encourages
further investment. This dynamic new coalition will help make climate risks
visible, leading to better decisions and smarter investments for the future. The
Global Commission on Adaptation is proud to be part of it.”
The Coalition will develop a common approach to assessing climate risks, which
will enable them to ensure all their investments are resilient, and will unlock
additional private finance for resilient infrastructure investment.
Published Oct 7, 2019 2pm EDT / 11am PDT / 7pm BST / 8pm CEST