Green Climate Fund: opportunity for stocktake and transformation

Liane Schalatek: I think there have been a number of lessons. First of all, one of the key innovations of the Green Climate Fund is its ability to focus on close partnerships with developing-country actors including direct-access entities. We now have quite a number of direct-access entities accredited, but when we look at the current project portfolio, there is still a substantial gap. Many of the multilateral implementing entities and, in particular, the multilateral development banks continue to receive most of the financing.

The lesson here is that there is a need to focus not only on the accreditation process, but on supporting countries in preparing project proposals, including by investing in adaptation planning, readiness and project preparation.

Another important lesson is the importance of increased transparency. The GCF has a proactive disclosure policy, but we have really only seen this policy begin to be implemented in the past few years. Recently, the board has begun livestreaming its meetings, for example. This has allowed civil society to participate to a greater degree, and to hold the fund accountable.

Kevin Adams: I agree. We have also learned that the GCF is about more than projects per se. It is also about its policies and the way it does its work. The GCF is the biggest capacity-building fund in the world, and it has crafted a number of different procedures and approaches to work with countries to develop robust project pipelines and programmes.

This is hugely important for recipient countries, but it also plants a stake in the ground in terms of the practices that funds similar to the GCF should adopt. What are the best practices for environmental and social safeguards? How can we maintain a country-driven approach, address climate change concerns, and pursue transformation? By developing these “gold-standard” approaches of policy for a climate fund, they are leading the way for similar institutions.

Liane Schalatek: Right, and that isn’t limited to public actors and funds, but includes the private sector, which is such a central focus of the GCF’s work. Take gender: The GCF was the first multilateral climate fund to have a commitment to mainstreaming gender issues in its governing instrument from the start.

Now, we can debate whether this has been sufficient, and there is certainly room for improvement. But what is significant was that the Fund sent a message to all of its partners, including private-sector entities, that they have to show the willingness and capacity to implement in a gender-responsive way if they want to become accredited with the GCF. As a consequence, a number of big players in the private sector –  including commercial banks such as Deutsche Bank, HSBC, and Crédit Agricole – were told that in order to become part of the Fund’s operation they had to have this gender policy if they didn’t already have it.

So, this is an important signalling function with respect to human rights as a core implementation mandate for all its accredited partners. It also includes the ability to upgrade the existing practices of many players, such as multilateral development banks, in the global climate finance architecture.

Liane Schalatek: Well, given that this is the first replenishment for the GCF, this really sets the tone for the future and is an important opportunity to take stock. I’d really like to emphasize here that the GCF has the Independent Evaluation Unit that is doing the a lot of the work of stocktaking, alongside a very active and engaged civil society network. So, the fact that the stocktaking may provide a critical assessment does not necessarily indicate that the Fund is performing worse than others, but simply that it is transparent, ambitious, and, thus, accountable as to where it wants to be.

From my perspective, I’ve been hearing a lot of discussion about the willingness of developed countries to come forward with money for the replenishment. While several contributor countries have suggested that things are not working that well at the GCF, this seems to me to be an easy way out of coming forward with money. It’s also useful to remember that this replenishment is coming at a particularly important time in the climate negotiation process, as it comes just before 2020, when the long-term finance goal of mobilizing 100 billion US dollars per year has to be met.

Kevin Adams: I agree the replenishment is a good opportunity to take an honest look at how the Fund has been operating, and how we can orient it towards a future where it can make the transformative impact it aspires to have.

That said, we shouldn’t be counting strikes against the GCF because it may not be having that impact quite yet. When we say there are some things that may not be functioning as well as they should be, it is because we are measuring against the transformative potential of the Fund rather than against its peers.

With regard to how the replenishment has been going so far, I would say that countries are aware that, as much as they want to raise ambition, they don’t want to find themselves in a situation of setting and potentially missing a public replenishment goal. That would send a bad signal. The message coming out of the replenishment should be that this is a strong fund with significant country ownership. Coming out of the replenishment, it will be critical for the world to see that the GCF has strong political support, and will remain the key multilateral institution in the fight against climate change moving forward.

Liane Schalatek: The Heinrich Böll Foundation, and in particular the Washington, D.C., office, where I work, has been engaged as a civil-society observer in the GCF process from the very beginning. We have therefore provided input, for example, on issues such as gender integration and the setting up of an independent redress mechanism. Both of these were then enshrined in the governing instrument of the GCF.

Personally, I have worked for the past three-and-a-half years as what is called a Civil Society Organization Active Observer, and have thus played a role in trying to coordinate civil society input. There are two such Active Observers; I represent developed countries, and my counterpart represents developing countries. But we function jointly as one entity, and we speak on behalf of all of civil society in board proceedings, make interventions, and provide technical input on policy mandates.

Kevin Adams: On the SEI side, SEI signed an agreement on knowledge sharing with the GCF’s Independent Evaluation Unit in January 2019 with the intention of signalling that we are interested in sharing information, and cooperating and supporting its efforts moving forward.

As Liane said, this unit has the important role right now in doing the first performance review, which involves not only looking at the impact of the different projects, but also taking a robust look at the different procedures under which the GCF operates: Are direct-access entities receiving the funding they are supposed to secure? Does the readiness program function well? Does the results management framework do what it is intended to do?

At SEI, our interest as a research institution is in bridging science and policy, and in bringing academic research on governance processes and policy procedures to decision-makers. One of the roles we can play is to provide additional research information that answers key questions: How are policies and procedures operating now? How they could operate more effectively? What are the opportunities to continue to innovate and strive for a Green Climate Fund that can really deliver on the promise of transformation?