Climate Lending Demonstration for Financial Service Providers

Project

Dominican Republic

Ecuador

El Salvador

International

To demonstrate that blended finance that reduces the cost and risk of climate lending enables FSPs to sustainably expand access to climate-resilient finance for vulnerable smallholder farmers and MSMEs.

Actions to reduce emissions in energy generation and supply.

Investment in electricity transmission and distribution systems capable of integrating renewable energy, supporting electrification and strengthening energy system resilience.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

An integrated system of hazard monitoring, forecasting and prediction, that enables individuals, communities, governments, businesses and others to take timely action to reduce disaster risks in advance of hazardous events.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Finance that is primarily directed towards climate change mitigation, including greenhouse gas emissions reduction and enhancing the sinks of greenhouse gases.

Dedicated pool of financial resources for climate-related projects.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

the fair distribution of risks and opportunities of climate change and the transition to a regenerative economy, cognisant in particular of disproportionate impacts on vulnerable communities and the working class

Procedural justice means ensuring that decision making is safe, transparent and inclusive, emphasizing the agency and influence of vulnerable groups and those most impacted.

Aligning the skills of the workforce with the requirements of the just transition.

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

Finance that is primarily directed towards climate change adaptation, including increasing resilience and robustness to actual or expected climate change and its effects.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

Actions or measures to adapt terrestrial systems to climate change.

Actions or measures to adapt freshwater systems to climate change.

Actions to adapt human health, healthcare systems and well-being to climate change.

Actions to adapt and increase the resilience of rural and urban infrastructure and settlements to climate change.

Coastal zone and marine-related actions and measures to adapt and increase resilience to climate change

Actions and measures to adapt and increase resilience of societies and the economy to climate change.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

People with different national or cultural traditions from the dominant population

Social and cultural groups that share collective ancestral ties to the lands and natural resources where they live, occupy or from which they have been displaced

woman and genders outside of the gender binary

Households employing domestic workers, for activities like cooking, cleaning and subsistence farming, for their own use.

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Activities that provide lodging, food, and entertainment services to guests, including hotels, restaurants, and resorts.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Activities that relate to the production of goods and services from forests.

Activities involving the catching, processing, and selling of fish for food, recreation, and industry.

This sector involves the distribution, treatment, and conservation of water resources.

Hot temperature extremes are daily maximum temperatures  that were exceeded on average once in a decade or once in 50 years, and includes heatwaves.

Risks to the ecosystem health of the marine environment, including ocean warming, ocean acidification, and ocean deoxygenation, harming biodiversity, species health, ecosystem services, and coastal community livelihoods.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

A drought is an extended period of unusually dry weather marked by a significant and sustained lack of precipitation, falling below a specific threshold over a large area for more than a month

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

Any substance with chemical properties that can cause physical harm to people or damage the environment, including ammonia, carbon monoxide, phosphine, chlorine, arsenic, cadmium, mercury, pesticides, dioxins, microplastics, benzene, asbestos, aflatoxins, fluoride, methanol, and toxins from marine sources.

Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Heavy precipitation refers to any form of weather where substances fall from the sky, including rain, snow, sleet, or hail.

The cryosphere is the frozen part of the Earth—it includes sea ice, glaciers, snow, and ice sheets. It helps regulate the climate and weather by reflecting sunlight. Rising temperatures are causing melting, leading to sea ice loss, glacier collapse, and glacier landslides and avalanches. This threatens the livelihoods of around 700 million people who rely on the cryosphere for food, water security, and cultural practices.

Geohazards are adverse geological phenomenon's that are capable of causing widespread damage or loss to property, life and the environment, such as earthquakes, volcano eruptions and tsunamis. Climate change can increase the frequency and severity of some geohazards, such as landslides, and soil erosion.

An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Area of the economy in which actors engage in identical or related activities.

The management and allocation of funds, assets and investments to meet various objectives

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Climate Lending Demonstration for Financial Service Providers

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