How It Works
As nations and businesses work to tackle both climate challenge and development goals, access to finance has emerged as a critical element. Private investors – often supported by public policy and finance – are already channeling significant amounts of money into the low-carbon economy in countries around the world, but much more investment is needed. This is particularly true for developing countries, which often face difficulties attracting private investment at the scale needed to reach their sustainable development and energy access goals.
The Lab network accelerates well-designed financial instruments that can unlock billions for energy efficiency, renewable energy, sustainable transport, climate smart agriculture, and curbing deforestation, while also reducing private investors’ risks and improving their financial returns. A public-private partnership, the Lab brings together and catalyzes broader government and private sector efforts to scale up climate finance.
How it Works
1. Call for Ideas
Open call for innovative sustainable investment solutions
2. Selection
Lab Members select the most promising ideas.
3. Development
Selected ideas for India, Brazil, and Global Labs benefit from analysis, stress-testing, and guidance from experts and investors. Fire Awards finalists prepare business pitches.
4. Endorsement & Launch
Lab Members vote to launch the ideas for piloting, based on their innovation, actionability, financial sustainability, and catalytic potential. Fire Awards winners are announced.
5. Implementation
The ideas move into action, fundraising to launch pilots, with continued support from the Lab network
Criteria
Successful ideas are selected by Lab Members and other experts based on the following criteria:
Actionable
Identifies (1) the type of entity(ies) that could implement it, (2) the pathway towards implementation, including the timeframe, activities, and key milestones, and (3) possible challenges to implementation and related management strategies.
Innovative
Demonstrates the ability to address, directly or indirectly, barriers to private climate finance that (1) have not yet been addressed or (2) that will be addressed more effectively compared to other instruments in the market.
Catalytic
Demonstrates potential to (1) mobilize private climate capital within a sizeable market, (2) be scaled up or replicated in other contexts and, (3) achieve socioeconomic, development, and environmental impacts.
Financially Sustainable
Identifies (1) a strategy to phase out public financial support, thereby achieving market viability and (2) possible challenges to achieving its intended objectives and related management strategies.
History
The Global Innovation Lab for Climate Finance was developed in 2014 by the UK, U.S. and Germany in partnership with major development finance institutions, key private sector actors, and several climate finance donor governments – Denmark, France, Japan, the Netherlands, Norway. The Global Lab was created to identify and develop innovative instruments that could drive private finance for climate mitigation and adaptation in development countries. Global Lab members, which have since grown to include philanthropic partners Bloomberg Philanthropies and the Rockefeller Foundation, as well as developing country government representatives like Rwanda, quickly recognized concentrated opportunities and investment needs in certain countries.
In 2015 a sister initiative, the India Innovation Lab for Green Finance, was launched in coordination with the Indian, US, and UK governments. The Brasil Lab was launched in 2016 under the auspices of the Brazil-U.S. Climate Change Working Group, led by the Brazilian Ministry of Foreign Affairs and the U.S. Department of State. In its first two cycles, the Fire Awards program, originally called Finance for Resilience, was managed by Bloomberg New Energy Finance (BNEF). Climate Policy Initiative has served as Secretariat and analytical provider for the Fire Awards since 2015. In 2017, each of the four founding Lab programs came together under one umbrella of “the Lab.”