The Fund for responding to Loss and Damage (FRLD), an operating entity under the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC), addresses the growing needs of vulnerable communities in developing countries facing the irreversible impacts of climate change. By financing recovery initiatives from climate-related losses and damage, the Fund empowers communities to rebuild and adapt. It strives for country-led locally driven solutions, ensuring interventions are aligned to country needs, priorities and contexts.
The FRLD integrates response to loss and damage as a core pillar of climate action, alongside mitigation and adaptation, acknowledging complementarities with existing systems and promoting coordination amongst actors. By providing resources directly to local actors in vulnerable developing countries through streamlined access processes, the FRLD drives for efficiency in response.
The Fund mobilizes financial resources through government contributions, private sector partnerships and innovative financing mechanisms, ensuring a robust and sustainable approach to addressing climate-induced loss and damage. A diverse coalition of stakeholders, including governments, civil society and the private sector, play a critical role in the shaping the Fund’s operations, working collaboratively to optimize its impact and efficiency to vulnerable developing nations.
Mandate
The Conference of the Parties (COP) and the COP serving as the Meeting of the Parties to the Paris Agreement (CMA), established the FRLD with a mandate to assist developing nations that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events.
Foundations & Establishment
Climate change disproportionately affects developing nations, leading to excessive losses and damage, undermining development progress, exacerbating poverty, displacing populations, and destabilizing livelihoods. A landmark agreement reached at COP27 in 2022 in Sharma El Sheikh, Egypt, led to the decision to establish a fund to consolidate global efforts to address climate-induced loss and damage. Subsequently, a transitional committee was formed in early 2024 to help design the Fund’s framework. During COP28 in 2023 in Dubai, the United Arab Emirates, the COP and CMA decided to operationalize the Fund as an as entity entrusted with the operation of the financial mechanism.
A Board of 26 members was constituted in 2023, and subsequently, the Philippines was selected as the host of the Board in 2024, while the World Bank was selected to host the Secretariat, and as the Fund Trustee. Early funding pledges were made at COP28.
An inaugural Executive Director was selected in September 2024 to lead the work of the Fund. In November 2024, an independent secretariat was established to implement its operational mechanisms and oversee the Fund’s work, fostering complementarity and coherence amongst actors.
