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New report: Protecting low-income communities through climate insurance

New report: Protecting low-income communities through climate insurance

By Will Bugler (Acclimatise) & Andrew Eil (Climate Finance Advisors)

Since 2015, the InsuResilience Investment Fund (IIF) has worked to build the climate resilience of poor and climate-vulnerable households as well as micro, small and medium enterprises, by increasing climate insurance coverage. Today, at a side event of the InsuResilience Global Partnership’s 4th Annual Forum, it has launched a new report “Protecting low-income communities through climate insurance”, which takes stock of its experience and achievements to date. As the first fund of its kind to raise private capital to invest in climate insurance markets in developing countries, IIF’s report shares valuable lessons relevant tor impact investors, insurers, policy makers and other relevant entities involved in building resilience using insurance and disaster risk finance.

Authored by Acclimatise and Climate Finance Advisors, the report is based on an analysis of reporting data, interviews and survey responses from IIF’s investee companies. It shows how IIF has developed a unique model that allows it to invest in companies across the entire insurance market value chain, helping to build new networks that support climate insurance market growth in developing countries. In its first six years, the IIF has extended climate insurance cover to 25 million poor or climate vulnerable people in developing countries.

Contributing to climate resilience

The report begins by placing the IIF’s work in the context of the wider challenges of closing the climate finance gap and increasing insurance market penetration in developing countries. Climate-driven extreme events have doubled from an average of under 300 events per year in the 1980s to over 600 per year since 2010. This has continued to drive economic losses, affecting practically all sectors. According to Swiss Re, the last decade has been the costliest on record with economic damages from natural disasters totalling over USD 2 trillion. However, as the report notes, current investments worldwide are insufficient to prepare for such impacts. In fact, according one UN estimate, climate adaptation finance totalled an average of $30 billion in 2017-2018,[1] well below the $210-300 billion needed per year between 2010 and 2030.[2]

As noted in the 2015 Paris Agreement, insurance can play an important role in building resilience to climate change and it impacts, allowing people to withstand the financial impacts of disasters and invest in adaptation measures. However, the majority of economic losses generated by climate-related extreme events are not covered by insurance, resulting in a substantial protection gap of $280 billion in 2017 and 2018. Whilst this gap has narrowed in recent years in upper-middle and high-income countries, there has been little progress in lower to middle-income countries, where the protection gap persistently exceeds 95 percent (see map below).

To close the adaptation finance gap and increase access to climate insurance products in developing countries, private sector investment is crucial. The IIF uses a blended finance approach, raising public capital with high risk tolerance complemented by grant resources, and leveraging it to attract private investors. So far, the IIF has raised $166 million (approximately $100 million of which in private capital) and invested $133 million in 21 companies around the world.

Figure 1: Property and casualty insurance premiums per capita. Source: Munich Re in InsuResilience Investment Fund’s ‘Protecting low-income communities through climate insurance’ report.

Overcoming barriers to climate insurance penetration

IIF, managed by BlueOrchard, was initiated by KfW, the German Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). It has a mandate to improve access to and the use of insurance in developing countries and, in so doing, reduce the vulnerability of MSMEs and low-income households to extreme weather events. To achieve this, IIF’s investee companies must overcome several important barriers such as high transaction costs of delivering climate insurance, difficulties distributing products to large numbers of poor and climate-vulnerable clients, low levels of awareness of and trust in insurance, and regulatory challenges associated with earl-stage climate insurance markets.

To overcome these challenges, IIF’s innovative blended finance approach combines aspects of a conventional investment fund with traditional donor grantmaking and technical assistance programmes. It has established a unique model that promotes a whole-value-chain approach to investing, careful selection of investee companies, and a high level of technical support provided by the Fund itself. It does this by operating two sub-funds: A Debt Sub-Fund and an Equity Sub-Fund. The Debt Sub-Fund invests in companies that distribute climate insurance products, such as micro finance institutions, whilst the Equity Sub-Fund invests in climate data and service providers, insurers and reinsurers.

This whole-value-chain approach to investing recognises that a thriving ecosystem of climate insurance entities is essential for long-term climate insurance market development. Service providers cannot exist without insurers and aggregators to buy their products, insurers in developing countries require a healthy pool of distributors to extend insurance to low-income communities, and new technologies from data and service providers underpin the market and are essential to take climate insurance products to scale. Climate insurance entities also interact with financial institutions such as retail banks and reinsurers in critical ways; these interactions are reflected in the business models of many of IIF’s investees and contribute to the development of the climate insurance ecosystem.

Other elements of IIF’s support for its investees to launch and grow climate insurance products are the Technical Assistance Facility (TAF) and Premium Support Facility (PSF). Through the TAF, IIF has undertaken 25 technical assistance projects supporting companies with activities ranging from business planning, and corporate structure, to product development and marketing. To help climate insurance products gain a foothold in the market, the IIF also provides temporary subsidies for insurance premiums through its PSF, making its investees products more affordable.

Figure 2: How the IIF supports entities across the insurance value chain. Source: InsuResilience Investment Fund’s ‘Protecting low-income communities through climate insurance’ report.

Encouraging results

Recent interviews and surveys with IIF’s investee companies have shown that the Fund has delivered significant benefits to their companies. Investees reported that IIF’s involvement has helped them to: develop new and improve existing climate insurance products, tailoring them for specific clients; scale their operations, allowing them to expand into new markets and reach more clients; reduce transaction costs by making capital investment in new technology and strategic planning; and improve business governance and reputation which has enabled them to access new investment.

Many of IIF’s investees are yet to launch or have only recently launched their climate insurance products. This status, coupled with the challenges they face when scaling products in developing countries, serves to explain why reaching large numbers of IIF’s target beneficiaries takes considerable time. Despite the long runway to large-scale impact, IIF has already demonstrated that its investments increase access to climate insurance for poor and climate-vulnerable people. At the end of its first year of operation in 2015, the IIF had approximately 1,700 beneficiaries, a number which had grown to 25 million by September 2020.

With IIF’s model now well established, the Fund expects to make a further 12 to 15 investments in companies in the coming years. Through these new investments and the further growth of its existing investees’ climate insurance offerings in maturing markets, the IIF expects to reach between 90 and 145 million beneficiaries by 2025.

Building resilience

The report also features evidence that the climate insurance products released by IIF’s investees have had a positive impact on the lives of its beneficiaries. Eight IIF investees reported paying out a total value of $4.75 million to clients, from over 18,000 claims, since 2015. The report found that access to climate insurance allowed beneficiaries to recover more quickly from climate related shocks and gave other benefits including improved access to credit in order to invest in their businesses. Interviews conducted by impact measurement company 60 Decibels, with 120 beneficiaries of one of IIF’s investees – Kashf Foundation – found that claimants were over twice as likely to have recovered to their pre-shock levels of welfare compared with those who did not make a claim.

Overall, the report finds that IIF has successfully established a model that can raise both public and private capital, provide investor returns, and achieve real benefits for poor and climate vulnerable communities. Ultimately, IIF’s successes are founded on the quality of its relationship building with its investees and with other institutions in its target countries. Whilst this approach is not quickly

scalable, it does provide a real and lasting impact in building resilience through climate insurance.

Download a copy of the report here.

For more information about the IIF and its work contact: info@blueorchard.com


[1] Climate Policy Initiative, 2019. Global Landscape of Climate Finance 2019. https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2019/

[2] UNEP, 2018. The Adaptation Gap Report 2018, Nairobi: United Nations Environment Programme.


Willis Towers Watson Invests in Low Carbon Transition Analytics with Transfer of Climate Policy Initiative’s Energy Finance Team

Willis Towers Watson Invests in Low Carbon Transition Analytics with Transfer of Climate Policy Initiative’s Energy Finance Team

Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company today announces the transfer of the Climate Policy Initiative’s Energy Finance team and its world-leading modelling and data solutions to deliver low carbon transition analytics to financial institutions, corporates and public sector clients.

The CPI Energy Finance advisory team, based in London, California and Delhi, and Climate Value at Risk (CVaR) methodology, data and modelling tools have transferred to the Willis Towers Watson Climate and Resilience Hub, led by Rowan Douglas. The addition of CPI Energy Finance’s low carbon analytics, expertise and relationships will enable Willis Towers Watson to help organisations assess their market exposure to a low carbon transition process enabling both the public and private sectors to evaluate, navigate and communicate their own transition pathways in the years and decades ahead.

Together with its existing leadership in physical risks, this expands the scope of Willis Towers Watson’s Climate QuantifiedTM to encompass climate transition risk and provide full spectrum, integrated risk assessment and advisory capabilities.

John Haley, CEO, Willis Towers Watson, said: “Following our recent acquisition of Acclimatise, we are delighted to welcome the Energy Finance team from CPI into our Climate and Resilience Hub. Measuring the impact on investments of the transition to a low carbon economy and developing new financial products to price risk and support the efficient allocation of capital is essential for an orderly and well-managed transition. Today’s announcement is part of our ongoing strategy of investing in skillsets and world class data and analytics to support our clients in forming a strategic response to climate change.”

David Nelson, Executive Director at CPI Energy Finance, said: “Over the last decade our work has shown that risk and uncertainty surrounding the financial impacts of a climate transition are possibly the greatest impediments to mitigating climate change. Our granular, asset-level models evaluate these risks by focusing on how financial markets would value resources, assets, businesses, tax revenues, and sovereign credit ratings as a result of climate transition driven changes to consumption, industry structure, and the global economy.

“We see no better way to scale and expand our offering than working with a world leader in risk management such as Willis Towers Watson and its exciting and growing Climate and Resilience Hub. We are delighted that they have recognized our expertise in identifying and quantifying the climate-related financial upside and downside risks of the transition and are looking forward to working with Willis Towers Watson in offering support analytics, advisory and transactions services, and Climate Value at Risk assessments and tools for companies, investors, public and private financial institutions, and governments.”

Professor Tom Heller, the Chairman of CPI’s board who will join WTW as a strategic adviser, said: “Accounting well for the growing impacts of climate transition risk has become one of the most important governance issues for sovereigns, central banks, financial institutions and corporates around the world. And it will only become more pressing as the pace of policy reform, technology innovation and public sentiment accelerate, and asset prices adjust.

“Synergies in expertise between WTW’s Climate and Resilience Hub, CPI Energy Finance, and the new team at Acclimatise provide a significant opportunity for countries and firms to plan for orderly, efficient and fair transitions to more sustainable and productive economies, combining advances in analytical metrics with targeted financial instruments, insurance products and investment strategies to manage the physical and financial risks associated with climate change.”

Climate Policy Initiative’s global team, based in six locations around the world, remains an independent non-profit led by its current board of directors.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.

About the Climate and Resilience Hub

The Climate and Resilience Hub (CRH) is the focal point for our climate expertise and capabilities, pooling knowledge from across our people, risk and capital businesses and from our collaborations to deliver climate and resilience solutions in response to a range of regulatory, investor, consumer, employee and operating pressures. Under Climate QuantifiedTM we deliver analytics, advice and transactions to enable corporate, finance and public sector institutions to embrace the climate decade ahead.

Media contacts

Sarah Booker +44 (0)7917 722040 /
sarah.booker@willistowerswatson.com


Adaptation Fund Accelerates Climate Responses through its Pillars of Action, Innovation, and Learning and Sharing

Adaptation Fund Accelerates Climate Responses through its Pillars of Action, Innovation, and Learning and Sharing

Washington, D.C. (December 3, 2020) – New Adaptation Fund grants are scaling up sustainable land and water management practices in Rwanda to adapt to extreme rainfall, applying innovative approaches to establish emergency water access stations to address drought in vulnerable urban areas of Chile, and disseminating knowledge of effective coastal management practices in Senegal.

These are among the newest types of grants offered by the Fund through its five-year strategy focused on the pillars of ActionInnovation and Learning and Sharing. They are offered to vulnerable countries above and beyond its regular country projects to help address the urgency and scale of climate change, and rapidly growing demand for the Fund’s work.

The UNFCCC convened a special Dec. 3 event during the Climate Dialogues that featured global- and country-level climate leaders discussing the importance of the Fund’s contributions to serving the Paris Agreement through these novel approaches and its concrete work on the ground that continues to empower the most vulnerable. The Fund’s advances in contributing to climate action will be assessed next year by the Subsidiary Body for Implementation, which helps guide progress in addressing countries’ adaptation needs and building momentum for enhanced action on the ground.

“We are extremely proud of the growth and ability to adapt of the Adaptation Fund, with programmes in more than 100 countries including now close to 115 concrete projects on the ground, pioneering Direct Access modality that builds country ownership in adaptation, and additional grant pathways that are helping countries build resilience to climate change as well as environmental, health and economic risks that are even more profound in the context of the COVID-19 pandemic,” said Mr. Ibila Djibril, Chair of the Adaptation Fund Board.

Since its creation in 2001 and launch in 2007 the Adaptation Fund has been delivering effective adaptation projects and programs to the most vulnerable to climate change while building an essential role in the international climate finance landscape.

It has pioneered innovative climate finance modalities such as Direct Access and Enhanced Direct Access that build national adaptive capacities and has accredited 32 national implementing entities (NIEs) to date, half of which are in small island developing states or least developed countries. Several were accredited under the Fund’s streamlined accreditation process for smaller entities, which opens doors to nations that otherwise may not have been able to access needed climate finance.

In all, the Fund has accredited 52 implementing entities with the capability to identify and implement crucial adaptation projects across the globe. Its readiness programme organizes workshops, webinars, technical assistance and south-south cooperation grants to help guide entities through the accreditation process, as well as share project experiences to further effective adaptation practices on the ground.

The Fund has grown rapidly to nearly 115 concrete adaptation projects and nearly US$ 800 million committed to:

  • Serving 27 million total beneficiaries (including over 9 million direct beneficiaries);
  • Training 458,000 people in climate resilience;
  • Preserving 407,000 ha of natural habitat;
  • Protecting 162,000 meters of coastlines, and;
  • Establishing 408 Early Warning Systems, among other adaptation measures.

In addition to its concrete projects, it is implementing the new tools and grants through its five-year Medium-Term Strategy begun in 2018. These include action grants that are scaling up effective projects; small and large innovation grants through AF’s Innovation Facility that are fostering and accelerating innovation by testing new adaptation tools and technologies and building an effective scalable base; and learning grants that are disseminating knowledge in adaptation – all with the aim to enable transformational impact.

These small grants (up to US$ 250,000 each) are currently available to NIEs, with several scale-up, innovation and learning grants having already been awarded and underway. Another US$ 10 million in innovation grants were also recently launched through the Adaptation Fund Climate Innovation Accelerator — funded by AF and implemented by UNDP and UNEP/CTCN — and are available to a wider range of stakeholders, including governments, community groups, entrepreneurs, civil society, young innovators, and others.

In late October 2020, the Fund’s Board further approved a window for large innovation grants up to US$ 5 million each and a dedicated funding window for Enhanced Direct Access (EDA), which builds on Direct Access by empowering NIEs to directly identify and fund local adaptation projects. It will build on pioneering AF-funded EDA projects in South Africa, Costa Rica, Federated States of Micronesia and Antigua and Barbuda.

Similar to the Fund’s window for regional project funding, all of these new funding windows are offered to countries on top of regular country project funding.

The Adaptation Fund serving under the Paris Agreement increases opportunities for communities to adapt to the adverse effects of climate change. With this development, the Adaptation Fund can build on its enviable track record of delivering innovative finance for concrete action on the ground. We must continue to strengthen these efforts and enable the Fund to provide greater access of needed adaptation finance to developing countries,” said Mr. Daniele Violetti, Director, Means of Implementation, UNFCCC.

All the while the Fund continues to empower the most vulnerable groups, including women, youth, indigenous groups and others, while promoting human rights, biodiversity, inclusion and transparency through all its programmes.

Breaking Ground in AdaptationIts projects are often the first on the ground in many vulnerable places throughout the world and are creating valuable models that have been scaled up and replicated with financing from other climate funds. This has happened in several instances, with Fund projects in Senegal, India, Rwanda, Colombia, Georgia, Maldives, Pakistan, Ethiopia and others later being later scaled up or replicated by other funds.

Many AF-funded projects have also been adapting to help directly with Covid-19. In India, women’s self-help groups stitched thousands of needed masks for isolated Himalayan communities, while in Sri Lanka local seamstresses working in garment factories produced needed protective equipment for hospitals. Self-sustaining greenhouses helped thousands of family members in Uzbekistan under quarantine, while project farmers contributed to food security in Ghana, and family brigades in Honduras safely planted trees and restored ecosystem resources.
Other projects are helping to build broader resilience to climate change and the pandemic at the same time through their inherent adaptation measures. In Costa Rica, an AF-funded project is empowering farmers to diversify production for their own supplies and to sell in local markets, while clean water facilities have been established to provide on-site access to villagers in Lao PDR who were previously accustomed to walking long distances for water.

The Fund also adapted early on in the pandemic to arrange virtual meetings and project visits, knowledge products and project flexibility.

“The Adaptation Fund continues to receive high demand for projects and support, and has been very adaptive and responsive to countries’ needs as we continue to effectively serve the Paris Agreement on the eve of its 5th anniversary, through the Fund’s tangible actions on the ground, growing strategic pillars of Action, Innovation and Learning, and empowering country ownership in adaptation,” said Mr. Mikko Ollikainen, Manager of the Adaptation Fund.

The Board received record highs in new proposals for its March 2019 Board meeting as well as its June 2020 intersessional review period, and has an active project pipeline of about US$ 280 million. It also approved a record US$ 188 million in new projects last year. This led to the Board deciding recently to increase its resource mobilization target for 2020 by a third to US$ 120 million, while noting more would be welcome and needed for projects in the pipeline.

Since it began formally serving the Paris Agreement nearly two years ago, the Fund solidified its institutional arrangements and received a record 11 contributions from national and regional governments in 2019 — including the first multi-year commitment to the Fund. In conjunction with the 5-year anniversary of the Paris Agreement, the Fund will convene a virtual Adaptation Fund Contributor Dialogue for Ambition in Adaptation Finance Dec. 14, where governments are expected to speak about new contributions for the Fund.


This press release was originally published on the Adaptation Fund website.
Cover photo by Leona Keyl.
Switzerland And The Pacific Islands Region Cooperate On Climate Change And Migration

Switzerland And The Pacific Islands Region Cooperate On Climate Change And Migration

The Swiss Federal Department of Foreign Affairs and the Secretariat of the Pacific Environment Programme (SPREP) are pleased to announce Switzerland is contributing USD100,000 to build capacity on climate change and disaster related migration, displacement and planned relocation for resilient development in the Pacific.

Project partners, including the Pacific Islands Forum Secretariat, are working under the Framework for Resilient Development in the Pacific, endorsed by the Leaders of the Pacific Islands Forum PIF in 2016. Project funds are provided as co-financing under the EU-funded Intra-ACP GCCA+ Pacific Adaptation to Climate Change and Resilience Building (PACRES) which aims to deliver better regional and national responses to climate change challenges faced by Pacific ACP countries. PACRES is being implemented jointly by SPREP, the Pacific Islands Forum Secretariat (PIFS), the Pacific Community and the University of the South Pacific.

The challenge of human mobility for Pacific Island countries was noted in the 2008 Niue Declaration on Climate Change, which recognised “the importance of retaining the Pacific’s social and cultural identity, and the desire of Pacific peoples to continue to live in their own countries, where possible”.

This new funding builds on a number of earlier Swiss investments that began under the Nansen Initiative Pacific Regional Consultation in 2013 and has continued under the Platform for Disaster Displacement. Switzerland’s Special Envoy for the Pacific Region Ambassador Yasmine Chatila Zwahlen said “The Pacific Islands Region is not only very exposed to Climate Change with its adverse effects on all aspects of Human Security, but it also harbours knowledge, tradition, solutions and best practices which the Blue Continent can share with the international community. I am proud that Switzerland can support the leadership in the Pacific Islands Region in this area of growing importance for the world.”

Project activities will include research to fill knowledge gaps to support policy development and enhancing coordination and communication to support the delivery of human mobility related programmes and policy development. Activities will be implemented by PIFS in the context of strengthening regional coordination in climate change and disaster resilience through the multi-stakeholder Pacific Resilience Partnership (PRP) for supporting resilience-building as guided by the Framework for Resilient Development in the Pacific (FRDP). To that end PIFS will deliver the activities in close collaboration with the PRP Technical Working Group on Human Mobility.


This press release was originally posted on ReliefWeb.
Cover photo by Daniela Turcanu on Unsplash.
New UNEP programme to support climate resilience in Pacific Islands through early warning systems

New UNEP programme to support climate resilience in Pacific Islands through early warning systems

A transformative new programme initiated by the UN Environment Programme (UNEP) aims to establish climate and ocean information services and multi-hazard early warning systemsin Pacific Small Island Developing States, which are among the most vulnerable in the world when it comes to climate change, natural disasters and increasingly frequent or intense extreme climate events such as tropical cyclones, flooding and drought.

At its 27^th^ Board meeting on 10 November 2020, the Green Climate Fund (GCF) approved the submission of a US$49.9 million programme — of which USD 47.4 million represents the GCF grant — on Enhancing Climate Information and Knowledge Services for resilience in 5 island countries of the Pacific Ocean. This is UNEP’s first multi-country programmatic initiative in the GCF, and will cover the Cook Islands, Niue, Palau, the Republic of the Marshall Islands and Tuvalu, countries with some of the world’s smallest and most dispersed populations surrounded by vast ocean areas.

Strengthening the resilience and capacity of Pacific Small Island Developing States to adapt to climate change cannot be achieved without scientific knowledge and data on climate and its impacts. The new programme aims to develop climate science and information services that are essential for sustainable development, environmental management, disaster risk reduction, food security, health services, water resource management and energy efficiency. Early warning systems facilitate effective disaster risk reduction and climate change adaptation, empowering populations at risk to initiate timely and appropriate actions to reduce the impact of climate-related hazards and extreme weather events.

“Climate services and early warning systems address an urgent need to provide an evidence base for planning, decision-making and responses that have the potential to save lives and livelihoods. Improved capacity to observe and predict the impacts of a changing climate will contribute to more effective environmental management, disaster risk reduction and food security in Pacific Small Island Developing States,” said Inger Andersen, Executive Director of UNEP. “The Green Climate Fund Board’s decision to invest in climate information and knowledge services in some of the countries most vulnerable to climate change is an important contribution to adaptation planning and science.”

The new UNEP programme will ensure reliable, real-time access to essential climate observation data, including the installation of a meteorological observation point on each inhabited island of the five countries, and deliver innovative approaches to disaster risk management through impact-based forecasting and forecast-based financing.

“I am pleased the GCF Board’s approval of USD 47.4 million will strengthen our partnership with UNEP to enhance climate information and knowledge services for resilience in Pacific Ocean countries. As a partnership organization, GCF operates through a network of accredited entities that work directly with developing countries to foster a paradigm shift towards low-emission and climate resilient pathways. This programme will do this by improving capacities to monitor, model and predict climate impacts in the Cook Islands, Niue, Palau, Marshall Islands and Tuvalu,” said Yannick Glemarec, Executive Director of the Green Climate Fund

At least 80 per cent of the islands’ populations will directly benefit from the programme through the promotion of diversified, climate-resilient livelihood practices informed by improved climate observation data and risk knowledge. In addition, the programme aims to achieve a 15-30 per cent reduction in economic damage and losses incurred due to climate-related hazards, and to enhance the productivity of climate risk-informed sectors. Strengthened ocean services will support sustainable marine ecosystems management.

“Niue is highly vulnerable to climate-related hazards and extreme climate events. This GCF-funded programme will empower our island populations to initiate timely and appropriate actions to reduce the Impact of hazards and extreme events by using improved climate information, early warning and risk knowledge. I applaud the efforts by everyone and the hard work towards the successful outcome of the approved programme Enhancing Climate Information and Knowledge Services for Resilience,” said Hon. Dalton Tagelagi, Premier of Niue. “The benefits of this programme will impact greatly on the continued efforts of the Niue people to building a safer, more resilient Niue to impacts of Climate Change and towards achieving sustainable livelihoods for the Pacific.”

The programme is part of UNEP’s commitment as a founding member of the Alliance for Hydromet Development, launched in 2019 to ramp up action that strengthens the capacity of developing countries to deliver high-quality weather forecasts, early warning systems, water, hydrological and climate services. Since its launch, significant progress has been made by the Alliance Members convened by the World Meteorological Organization (WMO) in designing the Systematic Observations Financing Facility (SOFF) to support countries to generate and exchange basic observational data critical for improved weather forecasts and climate services. This is will be important for the longer-term sustainability of the programme’s results.

“The GCF-funded UNEP programme will provide a major boost for the observational networks run by the national meteorological and hydrological services in the five Pacific Small Island Developing States, filling data gaps that are of national, regional and global significance. For the longer-term sustainability of these efforts, the creation of the Systematic Observations Financing Facility (SOFF) is critical. The SOFF will support Small Island Development States and developing countries in new ways to substantially increase sustained generation and international exchange of basic observational data,” said Petteri Taalas, WMO Secretary-General.

“As the GCF Nationally Designated Authority (NDA) for Tuvalu, I take this opportunity to acknowledge and appreciate all the work that UNEP has done that has enabled this programme to be considered by the GCF Board. The support and efforts put forth by the national team from the Tuvalu Meteorological Service and the Climate Change Department in the formulation of this project proposal is highly commended. At this opportune time I sincerely thank the GCF Board and its Secretariat for their intense work. We look forward to the timely implementation of the programme at the 5 Pacific Island Countries. The programme is envisaged to strengthen the provision of reliable, delivery of climate information to aid decision making for resilience building,” said Seve Paeniu, Tuvalu’s Minister for Finance and Climate Change.

“Pacific Small Island Developing States are highly vulnerable to climate-related hazards and extreme climate events, such as tropical cyclones, flooding and drought. This Programme will empower island populations to initiate timely and appropriate actions to reduce the impact of hazards and extreme events by using improved climate information, early warning and risk knowledge,” said Kosi Latu, Director General of the Secretariat of the Pacific Regional Environment Programme. “This is particularly timely as Pacific Island Countries face the double-edged challenge of climate change and a global pandemic. As secretariat of the Pacific Meteorological Council and host of the Pacific Climate Change Centre, we welcome this project to assist with addressing strategic priorities in the 5 countries and we look forward to supporting its implementation.”


About the UN Environment Programme

UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations.

About the Alliance for Hydromet Development

UNEP is a founding member of the Alliance for Hydromet Development, which brings together major international development, humanitarian and climate finance institutions, collectively committed to scale up and unite efforts to close the hydromet capacity gap.

For more information, please contact:

Keishamaza Rukikaire, Head of News & Media, UN Environment Programme


Cover photo by Bora Bora Photos, 2015
Climate change: New report shows global response is failing people in greatest need

Climate change: New report shows global response is failing people in greatest need

Global efforts to tackle climate change are currently failing to protect the people who are most at risk, according to new analysis by the International Federation of Red Cross and Red Crescent Societies (IFRC).

IFRC’s World Disasters Report 2020: Come Heat or High Water shows that the countries most affected by climate-related disasters receive only a fraction of the funding that is available for climate change adaptation and thus struggle to protect people from the aggravating effects of climate change.

IFRC’s Secretary General Jagan Chapagain said:

“Our first responsibility is to protect communities that are most exposed and vulnerable to climate risks.

“However, our research demonstrates that the world is collectively failing to do this. There is a clear disconnection between where the climate risk is greatest and where climate adaptation funding goes. This disconnection could very well cost lives.”

The failure to protect the people most vulnerable to climate change is especially alarming given the steady increase in the number of climate and weather-related disasters. According to the World Disasters Report, the average number of climate and weather-related disasters per decade has increased nearly 35 per cent since the 1990s.

Over the past decade, 83 per cent of all disasters were caused by extreme weather and climate-related events such as floods, storms, and heatwaves. Together, these disasters killed more than 410,000 people and affected a staggering 1.7 billion people.

The World Disasters Report also argues that the massive stimulus packages that are currently being developed around the world in response to the COVID-19 pandemic are an opportunity to address and reduce climate vulnerability. A recovery that protects people and the planet would not only help to reduce today’s risks but would also make communities safer and more resilient to future disasters.

Smart financing – with a focus on early warning and anticipatory action to reduce risks and prevent disasters before they happen – and risk reduction measures would both play a major role in protecting the most exposed communities.

Mr Chapagain said: Climate adaptation work can’t take a back seat while the world is preoccupied with the pandemic: the two crises have to be tackled together.

“These disasters are already on the doorstep in every country around the world. We must significantly scale up investment in climate smart actions that strengthens risk reduction and preparedness, alongside climate-smart laws and policies.

“With challenges like these, international solidarity is not only a moral responsibility, but also the smart thing to do. Investing in resilience in the most vulnerable places is more cost-effective than to accept continued increases in the cost of humanitarian response, and contributes to a safer, more prosperous and sustainable world for everyone.”

The World Disasters Report 2020: Come Heat or High Water can be downloaded here.


Cover image by Assam state, India, 2020/Indian Red Cross Society
Supporting countries in improving their forecasting: A new brief on how the Systematic Observations Financing Facility works

Supporting countries in improving their forecasting: A new brief on how the Systematic Observations Financing Facility works

Set up by the World Meteorological Organization (WMO), the Systematic Observations Financing Facility (SOFF) provides a new way to upgrade our global weather and climate forecasting systems for a fraction of the cost compared to current investment plans. This new information brief outlines how the SOFF will work and describes the process by which this new way of investing benefits all of the global community.

Many countries lack the resource and capacity to produce regular and detailed observations, and to share them with the global community. This significantly limits the accuracy of weather and climate forecasts made for their local areas, and therefore limits the plans they can put in place to adapt and become more resilient to climate change and extreme weather events. This is because weather prediction models’ outputs are reliant upon the quality of data input – if you have low quality or infrequent observational data for an area, then the outputs are likely to be limited.

Whilst improvements have been made to other types of earth observation methods, such as from satellites, surface-based observational coverage is not consistent across the globe and has not received as much investment. This has spurred the creation of the Global Basic Observing Network (GBON). GBON sets out the standard for observations, ensuring that data are of acceptable frequency and coverage, and shared in a timely and consistent way across the global community. However, not all countries are able to meet this basic standard – or if they can, they may struggle to sustain it due to the resource and capacity needs for making surface-based observations.

This brief describes how SOFF will act as the mechanism by which countries – in particular, 68 SIDs and LEDCs – can be supported in covering their ‘GBON gap’ and in sustaining compliance with the GBON requirements. This includes both financial and technical assistance, delivered in new ways. Internationally agreed metrics guide investments (GBON), and data exchange is used as a measure of success, which also create local benefits and provide a global public good.

SOFF will only cost $400 million in its first 5 years – a fraction of the $2.5 billion currently invested just in the Alliance for Hydromet Development member’s projects. Yet SOFF is predicted to result in a 10-fold increase in radiosonde observations (observations that are taken by suspending measuring equipment under a large balloon that will ascend to high altitudes) and a 20-fold increase from weather stations.

The mechanism of SOFF’s financial and technical assistance has been carefully designed so as to ensure investments are made wisely, and that success is measured by how well data is being shared – the crucial element of improving global forecasts. This design also ensures that countries’ contributions are sustained and increase the benefits for the entire global community.

Image: A diagram of the SOFF outcomes, phases, and operational partners. 


This information brief is one of several produced by the World Meteorological Organization in collaboration with Acclimatise. They are based on the work of the SOFF working groups that brought together 30 international partners to jointly develop the SOFF concept and design.

You can learn more about SOFF and read the other briefs here.


Acclimatise acquired by Willis Towers Watson creating global powerhouse for climate resilience services

Acclimatise acquired by Willis Towers Watson creating global powerhouse for climate resilience services

Acclimatise has been acquired by leading global advisory, broking and solutions company, Willis Towers Watson. The move sees the Acclimatise team combine with Willis Towers Watson’s Climate and Resilience Hub (CRH), creating a market-leading centre of climate adaptation expertise with over fifty technical staff. The combination significantly expands the capacity of the CRH to meet growing demands for climate resilience services.

The CRH is the focal point for WTW’s work on climate risk and resilience, helping its clients to address the challenges associated with climate change across physical, transition and legal liability risks.  Acclimatise and the CRH have complementary capabilities in financial services, climate risk and vulnerability assessment, resilience planning and climate data analysis and risk modelling.

“Climate change risk is fast becoming a central part of government, corporate and financial decision making and planning. Meeting growing client demand will require increasingly sophisticated approaches to climate risk assessment and management.” Said Acclimatise CEO, John Firth. “This is why I’m hugely excited by the potential that Willis Towers Watsons’ acquisition of Acclimatise brings. I am very proud of Acclimatise’s achievements and our staff over its sixteen-year history – from kitchen table to a market leader – and am confident that combining with the Climate and Resilience Hub is the right move to ensure we can amplify the impact of our work.”

Welcoming the deal, Rowan Douglas, Head of the CRH, said, “By combining Acclimatise’s market-leading climate modelling and adaptation capabilities with Willis Towers Watsons’s deep experience in natural catastrophe modelling, risk management, re/insurance and investment markets we have a unique range of expertise to help clients manage climate exposures, seize adaptation opportunities and build more resilient societies and economies.”

The two companies have collaborated in the past and have enjoyed a strong working relationship. “We have long admired Acclimatise and what John Firth and Dr Richenda Connell have built as visionary leaders since 2004.” Said Douglas, “Our earlier collaboration via the Willis Research Network illustrated a shared market ambition, culture and complementary experience and relationships.  This feels like a very natural step for both teams. We are all excited about meeting the resilience challenges for corporates, Governments and financial institutions in the years ahead.”

The deal comes at a time where there is significant momentum behind climate risk services for corporates, Governments and the financial services sector. In recent years, WTW has increasingly mainstreamed climate risk across its business segments. John Haley, CEO Willis Towers Watson, said that the acquisition “is very much in line with our ambition to help clients navigate an increasingly complex world and to achieve climate resilience through the provision of market-leading solutions. Acclimatise’s capabilities and proven success in the area of climate risk, provide significant opportunities for us going forward. I am excited about what this means for Willis Towers Watson.”

The value of surface-based meteorological observation data: a new brief on the costs and benefits of the Global Basic Observing Network (GBON)

The value of surface-based meteorological observation data: a new brief on the costs and benefits of the Global Basic Observing Network (GBON)

Spearheaded by the World Meteorological Organisation (WMO), the Systematic Observations Financing Facility (SOFF) provides a new way to upgrade our global weather and climate forecasting systems for a fraction of the cost compared to current investment plans. SOFF applies internationally agreed metrics – the requirements of the Global Basic Observing Network (GBON) – to guide investments and create local benefits while delivering on a global public good.

This new information brief explains how the world can benefit from improved surface-based observations and shows how targeted investments can yield the highest level of improvement in weather prediction and climate analysis.

Improved surface-based observations deliver economic, environmental, and social benefits. Alongside the provision of timely warnings about extreme weather events, investments in weather and climate services yield a strong positive cost-benefit ratio that will positively impact a wide range of sectors. However, these benefits will only be realised if systems are in place to translate them into useful information through improved forecasting.

Numerical Weather Predictions (NWPs) use computer-encoded versions of predictive equations of atmospheric behaviour to understand how climate has changed in the past, and how it may be evolving in the future. While global NWP is useful, there is significant scope for improvement in NWP accuracy. In fact, full implementation of GBON will roughly double the amount of surface-based data available to global NWP.

The monetary benefits of implementing GBON will fall mainly to regions with a high share of global GDP. However, there are massive cost savings to be had by all. Currently, the world’s global observation system is estimated to cost US$ 10 billion a year whereas the estimated funding to supports Small Island Development States (SIDS) and Least Developed Countries (LDCs) in achieving GBON compliance for an initial five-year period corresponds to USD 400 million.

This information brief is one of several produced by the World Meteorological Organization in collaboration with Acclimatise. They are based on the work of the SOFF working groups that brought together 30 international partners to jointly develop the SOFF concept and design.

You can learn more about SOFF and read the other briefs here.


Landmark legal case sees Australia’s biggest superannuation fund commit to strong action on climate change after 25-year old Brisbane man sues

Landmark legal case sees Australia’s biggest superannuation fund commit to strong action on climate change after 25-year old Brisbane man sues

By Will Bugler

Australia’s largest super fund, Rest, has agreed to test its investment strategies against various climate change scenarios and commit to net-zero emissions for its investments by 2050, after a legal case brought by a 25-year-old man from Brisbane. Mark McVeigh sued Rest in 2018 for failing to provide details on how it will minimise the risk of climate change. The landmark case represents the first time a superannuation fund has been sued for failing to consider climate change.

Mr McVeigh alleged Rest had breached Australia’s Superannuation Industry Act and the Corporations Act, after it failed to provide him with information on how it was managing the risks of climate change. These risks include physical climate risks that threaten Rest’s investments, and also transition risks which arise from the decarbonisation of the global economy.

Climate change is a ‘material, direct and current financial risk’

Australian law requires trustees of super funds to act with “care, sill and diligence to act in the best interest of members – including managing material risks to its investment portfolio”. In its settlement Rest agreed that its trustees have a duty to manage the financial risks of climate change.

In Rest’s statement about the settlement it said: “The superannuation industry is a cornerstone of the Australian economy — an economy that is exposed to the financial, physical and transition impacts associated with climate change.” and went on to emphasise that “climate change is a material, direct and current financial risk to the superannuation fund”.

Rest also agreed to take immediate action by testing its investment strategies against various climate change scenarios, publicly disclose all its holdings, and advocate for companies it invests in to comply with the goals of the Paris Agreement.

Mr McVeigh’s lawyer, David Barnden, head of Equity Generation Lawyers, said the case still sets an important precedent globally. “This outcome should represent a significant shift in the market’s willingness to tackle climate risk—a shift which should set a clear precedent for the industry in Australia, and also pension funds around the world,” he said. Mr Barnden is also representing 23-year-old Katta O’Donnell, who is suing the Australian Government for failing to disclose the risks that climate change could have on government bonds.

Growing momentum behind regulation

The latest cases in Australia are part of a global movement towards stricter regulation governing the financial risks posed by climate change (see Acclimatise’s timeline charting the rise of climate law). In 2015, for example, France introduced laws mandating climate disclosure for institutional investors and asset managers and in 2017 the Financial Stability Board’s Taskforce on Climate-related Financial Disclosure published recommendations for corporate climate disclosures. In 2019, National Instrument 51-102 Continuous Disclosure Obligations set out new requirements for firms reporting in Canada to disclose material risks in their Annual Information Form.

The implication of landmark cases such as the Rest settlement, is that super funds, pension funds, banks and other investors will increasingly require companies to understand and manage their climate risks. Earlier this year, Acclimatise worked Working with Asia-Pacific’s largest law firm, MinterEllison to produce a primer on physical climate risk aimed at Non-Executive Directors. The primer was published by Chapter Zero a global voluntary programme that connects and supports Non-Executive Directors to improve oversight and action on the issue of climate change.

Download the primer here.


Cover photo by Sippakorn, on Pixabay.