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GCF Board adopts policy to assess results of its investments

2021-07-12, 2:46pm Climate

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Kathmandu, 12 July (Indrajit Bose and Prerna Bomzan)- At the recently concluded 29th meeting of the UNFCCC’s Green Climate Fund (GCF) Board held virtually from 28 June to 1 July, the Board adopted the Integrated Results Management Framework (IRMF) policy after intense exchanges, from the time it was first presented to the Board at its’ last meeting held in March this year.
According to the policy adopted, the IRMF sets out the approach of the GCF “to assess how its investments deliver climate results and how its results contribute to the overall objectives” of the Fund “to promote paradigm shift towards low-emission and climate-resilient development pathways in the context of sustainable development and make a significant and ambitious contribution to the global efforts towards attaining the goals set by the international community to combat climate change.”
The IRMF policy also states that it is designed to be aligned with two key investment criteria, (viz. ‘paradigm shift’ and ‘impact potential’) of the initial investment framework, which define the project/programme eligibility and selection criteria. “The initial investment framework assesses ex-ante results of GCF investments, while the IRMF enables the assessment, reporting and analysis of actual results (ex-post) of GCF investments that lead to promoting paradigm shift in the context of sustainable development (see highlights of IRMF policy below).
Contentious issues among Board members on the IRMF included the framework’s approach on whether it was aligned with the GCF’s Governing Instrument (GI), how ‘paradigm shift’ was reflected in the policy; what references to ‘systemic change/enabling environment’ alluded to; and reference to Article 2.1(c) of the Paris Agreement (which refers to ‘making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development’); the impact of the IRMF’s implementation on the Funds’ accredited entities (AE); the kind of support AEs would need to implement the framework; contents of the IRMF handbook and whether the handbook should come to the Board for approval or not; and how the IRMF was to be applied vis-à-vis the GCF’s pre-selected projects and programmes.
These issues were ironed out after lengthy and intense consultations among Board members that were closed to observers. There was much procedural confusion and wrangling prior to agreement on the policy, with developed country Board members pushing for a vote on the policy (given the divergences of views over the policy between developed and developing countries), and over the Co-Chairs determination of whether efforts to reach consensus had been exhausted or not (see related TWN Update).
Following the consultations, the GCF Secretariat reported that consensus had been reached on the following issues –
— On dimensions of ‘paradigm shift’ and ‘sustainable development’ with a view to aligning it with the GI, there was consensus to replace ‘paradigm shift and sustainable development potential’ with ‘paradigm shift in the context of sustainable development’.
— There was agreement on the three assessment dimensions of paradigm shift potential: scale, replicability, sustainability. In the policy adopted, ‘scale’ is defined as the “degree to which there has been a significant increase in quantifiable results within and beyond the scope of the intervention”; ‘replicability’ is defined as the “degree to which the GCF investments exported key structural elements of the proposed programme or project elsewhere within the same sector as well as to other sectors, regions or countries; ‘sustainability’ is defined as the “degree to which the outcomes and results of GCF investments are sustained beyond completion through the creation of a structural and financial base as well as climate resilient practices.”
— Further, it was also agreed that the issue of ‘co-benefits’ would be removed from the ‘paradigm shift’ level and treated separately at the ‘project/programme’ level. ‘Co-benefits’ are defined as the “degree to which the GCF investments promoted positive co-benefits in environmental, social, economic and gender-related aspects”.
— On ‘enabling environment’, it was agreed that indicators (relating to ‘enabling environment’, ‘mitigation and adaptation’) would remain at the same result level and that the choice would be driven by the nature of the projects and relevance to the results areas.
— On reference to Article 2(1)(c) of the Paris Agreement, there was agreement on the following language: “By annually collecting project and programme results, GCF will aggregate, track and analyze its portfolio-level results, which will inform on GCF contributions to the global efforts to achieve the goals put forward by the UNFCCC and the Paris Agreement including, as appropriate, information on support provided for activities related to a wider alignment of financial flows with countries’ climate plans and strategies.”
— On the results handbook, it was agreed that the handbook would be brought back to the Board for consideration and approval.
— On consistency of language with the GI and investment framework, changes had been made in the text accordingly.
— On support to the direct access entities (DAEs), the consensus remained that support would be provided as well as how the figure of USD 12.4 million was arrived at was clarified.
— There was agreement to retain all the supplementary indicators that had been included in the published document.
The decision adopted reflects the consensus.
Highlights of decision adopted
In the decision adopted, the Board confirmed that the “new integrated results management framework indicators do not replace the eight GCF results areas, nor are they to be used in deciding the eligibility of projects and/or programmes submitted to GCF”.
(The results areas are: Mitigation – Reduced emissions from Energy generation and access; Low-emission transport; Buildings, cities, industries and appliances; and Forestry and land use; and Adaptation—increased resilience of Most vulnerable people and communities; Health and well-being, and food and water security; Infrastructure and built environment; and Ecosystems and ecosystem services).
The Board also reaffirmed that the “resource allocation parameters agreed in the Updated Strategic Plan for the Green Climate Fund: 2020–2023 remain unchanged”.
The Board confirmed “that ex-post results to be collected via the implementation of the integrated results management framework will not be used differently from the current results management and performance measurement frameworks for ex-ante assessment of funding proposals by the Secretariat, the independent Technical Advisory Panel and the Board”.
The Board requested “the Secretariat to develop and present to the Board for approval an accompanying results handbook, taking into account feedback received from accredited entities, nationally designated authorities and focal points, and other GCF stakeholders, on the application of the integrated results management framework”.
The Board also requested “the Secretariat to implement capacity-building initiatives on results management, measurement and reporting systems for accredited entities and other relevant stakeholders to enable effective implementation of the integrated results management framework”.
The Board decided “to allocate an additional amount of up to USD 12.4 million under the Readiness and Preparatory Support Programme as a new dedicated support component to be provided directly to direct access entities, including regional direct access entities, to support the implementation of the integrated results management framework” and requested the Secretariat “to operationalize this funding window to allow direct access entities to request such funds directly”.
It also decided that “readiness commitments through the dedicated funding window…are not included in and do not form part of the existing USD 1 million caps per country per year under the Readiness and Preparatory Support Programme”.
The Board further requested “the Secretariat to review the integrated results management framework on an ongoing basis, in consultation with accredited entities, national designated authorities and focal points, and other relevant stakeholders, and, if action by the Board is required as a result of the review, to present recommendations to the Board for its consideration and approval.”
Highlights of IRMF Policy adopted
The IRMF seeks to track and monitor results at the following three levels:
GCF impact level – paradigm shift potential: It does this by supporting projects/programmes in reporting how and to what extent projects/programmes have promoted paradigm shift potential through interventions that reduce emissions and/or increase resilience (climate impacts); and aggregating the information gathered via projects/programmes at the impact results level of the IRMF architecture through the application of three assessment dimensions (scale, replicability and sustainability).
GCF outcome level: aims to measure observable results of GCF-funded projects/programmes across the layers of reduced greenhouse gas emissions and increased resilience and enabling environment which aims to inform how GCF projects/programmes have contributed to creating enabling conditions and environments for paradigm shift in a country-driven manner and in line with the coverage area and activity-specific sub-criteria of paradigm shift potential of the initial investment framework.
Project/programme-level outcomes and outputs: an accredited entity will have project/programme-level indicators in its log frame to monitor and assess the project/programme’s specific progress results.
The policy also comprises core and supplementary indicators, measurement and reporting approaches to be applied during the IRMF implementation. The Policy also notes that paradigm shift can take place beyond the lifetime of a project/programme, and therefore the assessment frequency is set at a maximum of twice during project/programme lifetime.
Examples of core indicators include greenhouse gas (GHG) emissions reduced, avoided or removed/sequestered; direct and indirect beneficiaries reached; value of physical assets made more resilient to the effects of climate change and/or more able to reduce GHG emissions; hectares of natural resource areas brought under improved low-emission and/or climate-resilient management practices.
Examples of supplementary indicators include annual energy savings; installed energy storage capacity, beneficiaries (female/male) adopting improved and/or new climate-resilient livelihood options; beneficiaries (female/male) with improved food security; change in expected losses of economic assets due to the impact of extreme climate-related disasters in the geographic area of the GCF intervention; hectares of terrestrial forest, terrestrial non-forest, freshwater and coastal marine areas brought under restoration and/or improved ecosystems.
Similarly, core indicators to track progress at the level of enabling environment include for instance degree to which GCF investments contribute to strengthening institutional and regulatory frameworks for low-emission climate-resilient development pathways in a country-driven manner. During the funding proposal development stage, the AEs would have to identify at least two indicators for an enabling environment.
A project/programme is also expected to complete a three-point scale scorecard template (to be developed by the Secretariat) to assess how it promoted paradigm shift as part of its interim and final evaluations.
During the funding proposal development stage, AEs would be expected to outline how proposed outcomes contribute to a core indicator in the funding proposal template. AEs would also be expected to select other core and supplementary indicators if relevant to their projects/programmes. Specifically, the changes will include alignment to the IRMF indicators and results levels. The policy states that the updated template does not change the eligibility criteria for projects/programmes. This template must be used by all AEs for new funding proposals submitted for Board consideration at B.32 (32nd Board meeting) and beyond.
The IRMF applies to projects/programmes submitted to the Board starting on and from the B.32. Accordingly, all existing pipeline funding proposals, including resubmissions for Board consideration at or after B.32, are required to use the updated funding proposal template issued by the Secretariat to ensure alignment with the IRMF. The IRMF will not be mandatory for funding proposals approved prior to B.32.
-    Third World Network