Independent review of access to environmental and climate vertical funds - G20

Overview

One of the priorities of the G20 Sustainable Finance Working Group (SFWG) for the 2024 G20 summit in Brazil was optimising the operations of international environmental and climate funds to deliver sustainable finance. In response, an independent High-Level Expert Group (IHLEG) was appointed in February 2024 to provide recommendations for the SFWG to consider in preparing the 2024 G20 Sustainable Finance Report.

The objective of the G20 High-Level Expert Group was to provide a set of actionable recommendations to optimise the operations of these international environmental and climate funds and enhance their contribution to mobilising other sources of sustainable finance.  

The Project

Globalfields was commissioned by the independent High-Level ExpertGroup to conduct an independent review of the state of access to vertical environmental funds, including the Green Climate Fund (GCF), the Adaptation Fund, Climate Investment Funds (CIFs), and the Global Environment Facility (GEF).

Globalfields collaborated with Baastel, a Canadian international development consultancy, and the Climate Policy Initiative, a non-profit research group, in the preparation of this review. The review is now a published report "Accelerating Sustainable Finance for Emerging Markets and Developing Economies Independent High-Level ExpertGroup Review of the Vertical Climate and Environmental Funds" (October 2024).

The review aimed to respond to the following questions:

1.     How can the operations of the vertical environmental and climate funds be optimised to deliver sustainable finance including:

o  The accreditation process

o  Project preparation requirements, including project assessment criteria and financing terms

o  Disbursement requirements and processes

2.     How can complementarity, coherence and collaboration be enhanced to promote sustainable finance?

3.     How can financial leverage and capital mobilisation  be maximised?

4.     How can the actions of supporting capacity building be prioritised to better deliver sustainable finance, including project preparation and identification of financial needs?

Globalfields’ Contribution

Globalfields and Baastel were responsible for reviewing the state of access to the vertical funds. Globalfields began the review process by compiling existing literature and research on existing procedures, difficulties and experiences in accessing the international climate funds, including accreditation, project preparation and disbursement of resources, as well as different characteristics of accredited agencies and the use of resources in the form of grants and reimbursable funds. The literature review included both internal evaluations published by the funds, as well as independent evaluations and academic literature. Over 200 primary and secondary sources were consulted for this literature review.

Subsequently, Globalfields and Baastel conducted a thorough public survey through in-depth interviews with the heads and managers of all four vertical funds, representatives from developing country accredited entities who had accessed the funds, and representatives from relevant civil society organisations and multinational think tanks. The interviews provided insight in to the challenges faced by the accredited entities in the process of accreditation, project preparation and disbursement, as well as the limitations and barriers faced by the funds in facilitating access for entities in developing countries and opportunities for complementarity and coherence across the funds.  

Additionally, Globalfields analysed and compared disbursement patterns across the funds, including various financial instruments, amounts disbursed, types of climate action funded and the geographic distribution of funds. The purpose of this analysis was to determine whether fund resources were reaching the most vulnerable communities adequately and whether there were any gaps in the coverage of the vertical funds.

Conclusions

Globalfields, Baastel and the Climate Policy Initiative presented the review to the independent High-Level Expert panel. Globalfields then provided support to the expert panel to develop recommendations which were presented to the G20 Sustainable Finance Working Group.

‍