Our key takeaway: The Glasgow Climate Pact that emerged from COP26 urged “nongovernmental organisations and private sources, to provide enhanced and additional support for activities addressing loss and damage associated with the adverse effects of climate change.” In practice, this relies on holistic actions by an interconnecting web of non-state actors—including companies, investors and insurance companies. Top imperatives for all actors including accelerating actions after climate impacts, continuing to pursue the 1.5°C goal and putting in place proactive measures that prevent impacts from intensifying or even occurring. To this last point, more financing is needed for climate adaptation (not just mitigation), in recognition of the many ways that the most vulnerable people are already suffering from climate impacts encompassing not only economic losses but also social, cultural, health and biodiversity losses. These are impacts that will not be easily remediated through financial compensation.
The UN Climate Change High-Level Champions published Actions After Impacts (November 2022), a discussion paper summing up the outcomes of dialogues with non-state actors on actions to address climate losses and damages:
- Three imperatives requiring a structural shift: The dialogues landed on three top priorities that need to be addressed to respond to the climate crisis: (1) “Accelerating actions after impacts to address the climate losses and damages that are happening”; (2) “Getting to net zero as soon as possible to stop the impacts of climate change getting worse and keep 1.5°C alive”; and (3) “Building resilience to adapt to the impacts of climate change and reduce the losses and damages from climate impacts”—in other words, taking action before impacts occur and intensify. The report acknowledges that these imperatives will necessitate a transformational shift of public and private financing to include more finance for adaptation, not only mitigation. This is a matter of both practicality and justice: "With the impacts of climate change increasing those who are suffering most, who have least caused them, are the ones bearing the cost of these losses. There is a need for a more holistic response from all countries and non-state actors to these losses and damages.”
- Loss and damage comes in many forms: Many discussions at COP27 centered around loss and damage and the realities of what this means in practice. There was one crucial thread that remained under-emphasised in the larger loss and damage conversations but has been raised repeatedly by indigenous peoples and other land-based communities: not all losses and damages are economic and not all of them can be remedied in the same way. The UN Climate Change High-Level Champions report acknowledges this essential fact, pointing out that actors need to “take action to address all losses and damages from extreme climate events and slow onset changes including damage to our economies, culture, heritage, health and ecosystems.” Specifically, “there is increasing recognition of the social, cultural, health and biodiversity losses and damages from climate change, and it will be hard to recover from these losses, especially for frontline communities in developing countries. All losses are important, non-economic losses have value both in economic and social terms. More is needed to take non-economic losses into account and prevent them when they occur.”
- The role for the private sector: The paper points out that the “climate crisis requires the whole society approach, and radical collaboration to increase action on addressing climate losses and damages and deliver change.” Of course, this includes the usual suspects: stakeholders across government, international organizations, civil society, and academia. But there is a particular role that the private sector—including businesses of all sizes, insurance and blended risk finance companies, and commercial banks and private investors—can play in collaboration with other stakeholders. The report includes a typology of different possible actions and combinations of actors to address climate losses and damages. For example, insurance and risk finance companies and businesses, can lead an intervention to improve access and coverage of insurance, alongside civil society organisations and local governments. Some sample interventions: “Creating and deploy[ing] insurance tools, such as accessible index-based insurance, parametric insurance”; and “Businesses insuring SMEs/smallholder farmers [in their supply chains] for future climate losses and damages to benefit them and the businesses supply chains.” Another example of cross-sector collaboration is strengthening business recovery and continuity, which can be co-led by businesses and investors, alongside trade unions and workers organisations. Interventions to support workers and communities could include: “Supporting employees with immediate losses and help to return to normality”; “Supporting emergency relief to the communities in which they work to address the losses and damages they have experienced”; and “Building back better (and reducing future losses) e.g. supporting farmers to use more flood resistant /drought-resistant varieties; investing in flood protection and restoration of degraded ecosystems; and, supporting employees through grants or loans to make their homes more resilient to climate impacts.”