New multimillion dollar commitments and strategic collaborative actions to overcome key hurdles to private investment in climate adaptation and resilience in developing and emerging countries.
The group of development finance institutions signatories and partners members to the Adaptation & Resilience Investors Collaborative (the “Collaborative”), including FMO, today committed to substantially increase investments in climate adaptation and resilience to support vulnerable developing and emerging countries.
Last May the G7 development finance institutions members of the group put forward a set of ambitious actions to the G7. Work is already underway among these organisations and other members of the Collaborative for the adoption of a common approach to identifying eligible investments and reporting on impact and progress. Activities are also ongoing for improving physical climate risk assessment capabilities, shaping markets, and building pipelines of bankable investments.
Further to these joint efforts, members of the Collaborative commit to:
The Collaborative will report on progress by the Germany’s G7 Summit in 2022 and continue working towards joint outcomes to be announced at COP27 hosted by Africa.
The Collaborative has also announced new members. The DFIs Finnfund and Swedfund have joined as signatory members, while the European Investment Bank, the Global Innovation Fund, the Islamic Development Bank, KFW Development Bank, the Nordic Development Fund, and USAID joined as partner members.
Members have invited other development finance organisations to join and contribute towards its action plan. The Public Development Bank Coalition gathered at Finance in Common 2021 welcomed the work of the Collaborative and encouraged the endorsement of its recommendations. Joint work is also underway under existing fora on Paris alignment of new financial flows, which includes focus on climate adaptation, and implementation of the TCFD’s recommendations.
Finally, at COP26 some members of the Collaborative are announcing new commitments for increasing adaptation finance and accelerating private investment, demonstrating strong collective ambition:
Amal-Lee Amin, Director, Climate Change, CDC Group, said: “The climate crisis is a reality today. As DFIs, we need to act now and work together to overcome barriers for accelerating private sector investment in climate adaptation. Through our investments we must equip and empower businesses across all sectors, communities, and natural systems to adapt and become more resilient to the adverse effects of climate change.”
Rémy Rioux, Chief Executive Officer, AFD Group and President of the International Development Finance Club (IDFC), said: “Assessing and managing physical climate risks in financial institutions contributes to raising awareness on the importance of identifying vulnerabilities and investing in adaptation. From this standpoint, development banks bear a special responsibility: they should not penalize their most exposed borrowers by remaining solely focused on a risk-based approach, but instead should get to know their borrowers better and support them in progressing along adaptation pathways in the long-term to reduce the risks together. We are happy to be part of this important exchange platform and contribute by sharing our experience on the integration of physical climate risks at project and counterparty levels to move forward together in fulfilling our role as development banks.”
Jaakko Kangasniemi, Managing Director, CEO, Finnfund, said: “As development financiers, fostering climate adaptation and building resilience must be at the core of our work. We need to work together to mobilise funding for companies that enhance resilience in all levels of society. Therefore, Finnfund is committed to make 1 billion euros worth of new investments in adaptation and mitigation by 2030.”
Michael Jongeneel, CEO, FMO,said:“Building on our track record of blended finance and mobilization for climate and environment investments, we are committed to working with financial and non-financial partners to significantly improve local project development and accelerate the mobilization of additional private sector capital for climate adaptation. We also commit to new partnerships – like we do with the Dutch Fund for Climate and Development and The Rallying Cry - providing the basis for a ‘landscape approach’ and ensuring that we empower local leaders to maximize the positive impact of our work. We look forward to working further with the Collaborative to achieve our common goal of mainstreaming and accelerating adaptation and resilience finance, especially in the least-developed countries.”
Karin Isaksson, Managing Director, Nordic Development Fund said: “TheNDF’s Strategy 2025 communicates a strong focus and adaptation and resilience action in lower income countries. To operationalise this, NDF will commit at least 60 million euros on a yearly basis to support both public and private sector investment targeted at advancing the climate and development agendas with a focus on early-stage and catalytic financing together with strategic partners.”
Alix Peterson Zwane, CEO, Global Innovation Fund, said: "The climate crisis has the potential to wipe out decades of progress in improving the lives and livelihoods of the world's poorest people. Its effects are already being felt, and the need for investment in climate adaptation and resilience solutions is critical. Building on more than six years of investing in evidence-based innovations that respond to big development challenges, GIF is delighted to join the Adaptation & Resilience Investors Collaborative, working closely with mission-aligned organisations to accelerate progress on this urgent agenda and support those who are vulnerable to the most serious effects of climate change."
Maria Håkansson, CEO, Swedfund, said: “Swedfund has committed to align with the goals of the Paris Agreement. This means not only focusing on the mitigation of emissions, but given our countries of investment, that we have a key role to play in facilitating finance flows to climate-resilient development and increasing the ability to adapt to climate change. Joining the Adaptation & Resilience Investors Collaborative will enable us to collaborate with other international development actors with the same goals, such as strengthening our assessments of physical risks and accelerating investments that make communities more resilient to climate change”.
Patrick Verkooijen, Chief Executive of the Global Center on Adaptation, said: “More funding is critical for the most vulnerable to survive climate change. It is also essential to help countries in Africa reach the ambitious goals they have set in the African-led and African managed Africa Adaptation Acceleration Program. Through this program Africa and with the collective efforts of the members of ARIC we will be able to integrate climate adaptation investments at the national level, mobilize private sector financing and ensure best practice and knowledge is shared across the continent.”
About the Collaborative
Launched at the Finance in Common Summit 2020, the Adaptation & Resilience Investors Collaborative is an international partnership of development finance organisations working together to accelerate and scale up private investment in climate adaptation and resilience in developing and emerging countries. To this end, we build know-how and tools, and we join forces to develop pipelines of bankable investments and support early-stage ventures with innovative climate adaptation and resilience solutions to become investment-ready.
Signatory members include, in addition to the new members announced above, CDC Group, the French AFD and Proparco, Italy’s Cassa Depositi e Prestiti (CDP) in its role as Financial Institution for International Development Cooperation, FinDev Canada, the Foreign, Commonwealth & Development Office (FCDO), FMO of Netherlands, the Global Center for Adaptation the U.S. International Development Finance Corporation (DFC).