The World Bank’s Board of Executive Directors has approved the World Bank’s role as interim secretariat host and trustee for the recently established fund for responding to loss and damage. The move constitutes a major step towards the fund’s full operationalization.

In 2022, the Sharm El-Sheikh Climate Change Conference agreed new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change in responding to loss and damage. The following year, the United Arab Emirates (UAE) Climate Change Conference operationalized the loss and damage fund as “an entity entrusted with the operation of the Financial Mechanism of the Convention,” which would also serve the Paris Agreement on climate change.

In their closing statements at the June 2024 Bonn Climate Change Conference, many parties emphasized the need to operationalize and ensure adequate capitalization of the loss and damage fund to help vulnerable countries respond to the impacts of climate change.

The World Bank announced the Board’s decision on 10 June 2024. According to a press release, the Fund Board is independent from the World Bank, has its own governance structure, and “will determine key priorities, including financing decisions, eligibility criteria, and risk management policies.” “The Fund is expected to be operationalized over the coming months,” it states.

The press release further notes that “[a]s Trustee, the World Bank will not play any role in fundraising, making funding allocation decisions or in the identification, preparation, appraisal, implementation or monitoring of projects financed by the Fund.” Accountability for the end use of funds will remain with implementing entities and direct access recipients.

The news from the World Bank broke days before the second meeting of the Global Biodiversity Framework Fund (GBFF) Council in Washington, D.C., US. Approved by the UN Biodiversity Conference in 2022 – the same year the UN Climate Change Conference agreed to funding arrangements for loss and damage, the GBFF is already operational. Global Environment Facility (GEF) Council Members adopted the GBFF’s first work program amounting to USD 37.82 million. [World Bank Press Release] [Fund for Responding to Loss and Damage]