Overview

The context

Livelihoods comprise the capabilities, assets and activities required for living. A livelihood is sustainable when it can cope with and recover from stresses and shocks, and maintain or enhance its capabilities and assets, while not undermining the natural resource base. About 42 per cent of the world’s poorest depend on degraded lands for nutrition and income. The climate crisis has a disproportionate impact on vulnerable communities and their livelihoods, multiplying existing threats and creating new risks. People’s vulnerability to natural hazards and their capacity to cope, manage, and respond to the impacts of climate change depend on their social, economic, cultural, and political circumstances.

A growing number of people and assets are in areas prone to natural disasters, and thus the total fatalities and losses due to these disasters are increasing globally. The need to mainstream climate risks into national development policies to strengthen resilience to shocks affecting livelihoods and improve adaptation and disaster risk reduction programming has attracted rising attention.

GCF’s unique role

The Green Climate Fund’s (GCF) investments in this result area aim to strengthen resilience across multiple sectors by avoiding significant deterioration or restoring one’s livelihood quickly after a shock, particularly in the areas related to agriculture and food security, ecosystems and ecosystem services, forests and land use, water security, as well as climate information and early warning systems. GCF resources are also used for the following livelihood initiatives: livelihood diversification, food storage, communal pooling, market responses, and social safety nets. 

GCF’s unique financing model, based on the following four complementary pathways, is designed to unlock climate innovations and investments to strengthen the resilience of vulnerable people and communities: 

1. Transformational planning and programming – GCF engages with vulnerable communities and populations of developing countries through community action to integrate climate action planning and programming within national budget plans as well as COVID-19 recovery plans to reduce capital requirements in the long-term. This includes facilitating climate-informed advisory, risk management services and community action in the health and wellbeing sector. As well as supporting community engagement in designing and implementing forecast-based action at all levels, including indigenous knowledge in the climate information and early warning systems sector.
2. Catalysing climate innovation – GCF financing supports innovations in policy, institutions, business, technology, and finance through enabling policy and institutional environments and by enhancing the capacities of people, communities, and institutions to engage in co-design, co-production, and implementation of innovative policies and environments. This includes implementing and promoting well-managed mix and integration of Grey-Green Infrastructure to enhance the adaptability and resilience of coastal and upstream communities.
3. Mobilising funds at scale – GCF is able to mobilise national and global funds using multiple strategies, such as blended finance to further engage the private sector by mitigating risks, in order to strengthen markets and institutions to increase climate finance at sub-national levels and support access to climate finance for vulnerable populations. In addition, GCF also works to de-risk projects and private finance, measure ESG impact, and support various programmes including carbon credit initiatives and climate-resilient infrastructure investment, among others.
4. Coalitions and knowledge to scale up success – GCF collaborates with countries and various stakeholders to generate and share knowledge from the implementation of its projects and programmes to promote public awareness and capacity building for scale. GCF encourages bridging science and policymakers with indigenous and traditional knowledge to promote effective natural resource management practices to support sustainable livelihoods. GCF also helps to establish and utilise platforms to expand knowledge in areas such as suitable technologies, management practices and sustainable business models, as well as partners with agencies and networks to maximise knowledge feedback.