Frequently Asked Questions
Individual entrepreneurs, public institutions, development finance institutions, private sector, and civil society (NGOs, think tanks, academics) are all welcome to submit ideas. Successful past proponents have included large institutions from the public and private sectors, as well as start-ups, entrepreneurs, boutique fund managers, and NGOs. The Lab’s call for ideas is open to all innovators in the sustainable finance space.
The Lab typically seeks relatively well-defined concepts that are in a pre-pilot or early pilot stage, and which could benefit from instrument design and technical support. Successful ideas typically have some evidence of likelihood of success in practice, but the maturity of instrument structure, pathway to market, and financial modeling varies.
The idea must be a financial instrument (description below) that targets climate-relevant sectors in developing countries and must not require legislative or regulatory change to be implemented. In addition, applicants should be able to show that the idea meets the Lab’s four criteria: innovation, actionability, catalytic potential, and financial sustainability. For more on these criteria, see the Lab Guidelines. HERE or on the Lab’s site HERE.
In the context of the Lab, a financial instrument is a tool, structure, or approach to investment which has the potential to mobilize private capital. The Lab does not support ideas for individual projects, or the deployment of new technologies (unless there is an innovative financial product associated with these projects or technologies). Instruments that have been selected by the Lab include debt and equity funds, bonds, insurance products, guarantees, investment data tools and platforms, pay-per-service models, and securitization structures among others. To get an idea of what we are looking for, take a look at some of the past instruments HERE.
Yes, we welcome other innovative ideas, even if it may not fit into one of this year’s priority regions or themes. Priority regions represent dedicated chapters of the Lab, which have a fixed number of ideas per year – each year the Lab takes forward several ideas that focus on other developing countries. In addition, the Lab reserves slots for high-quality ideas that do not fit into either thematic or regional categories, but display especially high potential according to Lab criteria.
Submissions should provide a short description of the idea, its purpose, and how it works. They should also show that the idea fits the Lab’s criteria, outline the main barriers it addresses, and present the envisioned timeline for implementation. Some details can be under development at the time of submission so long as that uncertainty is clearly conveyed in the application. For example, while it is helpful to have a sense of the types of finance needed for idea implementation, part of the Lab process is further developing and define the finance needed for implementation. Some level of development is useful but the ability to describe every detail of the flow of finance is not required.
Past proponent teams have typically dedicated a combined at least 2-3 days per week to the Lab process, in a period over seventh months (from March to September). This time is often split across multiple team members from the proponent side. We suggest that successful proponents dedicate one or two individuals to work as Lab focal points throughout the process. CPI dedicates two staff members from our team to each instrument, at roughly ~60% full-time, and we expect that our proponents apply a similar level of prioritization during the core Lab cycle. Moreover, following conclusion of the Lab cycle, it is the responsibility of the proponent to launch and implement the idea. Successful applicants therefore must demonstrate a degree of long-term commitment to the idea which extends beyond the Lab process.
After being selected at the end of February, successful proponents will work for seven months to advance the instrument and identify its implementation pathway. After this time, the instrument will receive light-touch assistance over a 12-month period, including bespoke launch support to get the idea off the ground.
Yes, you can submit more than one idea. We do suggest though that you confirm that the ideas meet the Lab’s eligibility criteria to make sure your ideas are a right fit for the Lab before filling out the questionnaire.
Typically, 2-way NDAs are signed between selected proponents and CPI at the beginning of the Lab process to ensure that proprietary and/or commercially sensitive information remains confidential. However, a critical output of the Lab process is the distribution of outcomes of our research with the broader climate finance community. Therefore, proponents should be comfortable with key learnings from the Lab process, including the instrument design, implementation pathway, and potential for impact being made publicly available at the conclusion of the Lab process.
The idea must be targeted at one (or more) developing (ODA-eligible) countries (you can find a list of these countries here. While the idea must be targeted at ODA-eligible country(ies), the proponents and sources of capital can be based out of any countries.
The Lab does not offer funding or seed capital as a part of the program. Proponents are provided with in-kind support equivalent to USD 200,000 from CPI. Though not a guarantee, approximately half of Lab proponents have secured some form of investment within one year of their participation in the Lab process.
We recommend that you choose the priority stream that you deem is the best fit for your idea and then include in longer written responses as applicable where you see intersection between the two streams. If there is overlap in the two streams, the selection team will then holistically evaluate your submission and determine which stream the idea should be considered in.
No – if your idea is not primarily focused on climate adaptation or gender equality, we recommend that you do not select one of the streams. Both the climate adaptation and gender equality streams are seeking ideas where the central focus is that theme.
Examples include Climate Resilience and Adaptation Finance & Technology Transfer Facility (CRAFT) (details HERE), Climate Adaptation Notes (details HERE), and Climate Insurance Linked Resilient Infrastructure Financing details HERE).
This evaluation will be made on a case-by-case basis, dependent on the context in which the financial instrument is being designed and operated. At a minimum:
- Gender considerations must be integrated across the design, operations, and implementation of the financial instrument (for an explanation of how to apply a gender lens to different sectors and themes refer to the 2X Gender & Climate Notes)
- Ideas must have a direct impact on, and specific outcomes for, gender equality and women empowerment. This could include (but is not limited to) financial instruments that:
- Facilitate access to finance for women entrepreneurs, producers, or women-led SMEs delivering climate solutions
- Promote diverse leadership and inclusive employment practices in climate mitigation and adaptation investments
- Promote the design and uptake of goods and services targeted to the needs and disproportionate climate risks faced by women, such as insurance tools
- Target women as end users, consumers, and borrowers, for example, in climate-resilient infrastructure investments
Are founded on strong gender analysis and use this to identify a project pipeline and mainstream gender equality in investment processes
Women do not need to be the sole target of a financial instrument to be eligible for this
stream. Please refer to examples of gender-responsive climate finance instruments below.
• The InsuResilience Investment Fund, managed by impact investment manager BlueOrchard, works with microfinance institutions to expand access to and use of climate disaster insurance to reduce the vulnerability of micro, small, and medium enterprises, as well as low-income households. It has two sub-funds: the equity sub-und: invests in insures and brokers actively building the market for climate insurance; and the debt sub-fund: lends to financial institutions and aggregators in return for participation in the development and distribution of climate insurance. The debt subfund is gender-responsive because it specifically targets women as end-users, encourages insurance providers to collect gender-disaggregated data, and provide plans that recognize men and women’s differentiated risks.
• Root Capital provides credit and capacity building to small, sustainable agricultural businesses in developing economies, focusing on increased access to finance andtailored loans to gender-inclusive and women-led businesses. Each financial instrument is tailor-made to address the particular needs of the agricultural business and community, including options for impact-linked financing and microloans. This is a great example of tailoring financial services products to target women as end-users.
• Water Equity is an asset manager with an exclusive focus on investment opportunities in the water and sanitation sector, particularly affordable financing for household-level solutions and climate-resilient infrastructure. It is a particularly good example of addressing the disproportionate climate impacts faced by women, as 97% of individuals directly supported by the investments are women and the fund has a unique understanding of the compound issues of gender impacts and climate adaptation and resilience.
• The Clean Cooking Fund is a blended finance vehicle, part of the World Bank’s Energy Sector Management Assistance Program, that focuses on results-based financing mechanisms to incentivize supply-chain actors, spur market development, and pay for the public co-benefits of health, gender equality, and climate. The thesis of the fund is that eradicating cooking poverty would be a triple-win for public health, women’s empowerment, and the environment/climate. The fund’s diverse impacts make it unique – universal access to clean cooking results in emissions mitigation, from the move away from traditional cooking fires, the reduction of health risks from smoke inhalation, and the gains to women’s productivity and equality.
• The Brazilian paper and pulp company Suzano recently issued a sustainability-linked bond with an interest rate penalty if it fails to meet its stated sustainability targets. There is a required KPI for both gender and climate, with a target of 30% or more leadership positions filled by women, and a target for reducing water withdrawal intensity; the penalty of a step-up applies if either KPI is not met. This is an example of a financial instrument where achievement of climate goals and gender diversity goals are both core objectives.
What are examples of climate finance instruments that would NOT be considered gender-responsive climate finance instruments for this stream? Given below are theoretical examples of financial products that would not be considered eligible as gender-responsive climate finance instruments for the Lab’s Gender Equality stream.
• Existing off-grid solar company that wants to focus on marketing its products to women.
In this case, gender considerations are only included as an add-on to an existing product/distribution system, rather than centering gender equality in the development and implementation of the financial product.
• A consulting or technical facility targeting learning and capacity building for gender diverse entrepreneurs
If a consulting/ technical facility lacks a corresponding financial instrument with expected returns, it is not eligible for Lab support. While technical assistance can be a part of increasing access to finance, to qualify for this Lab stream, here must be a financial instrument that is also aligned to climate change mitigation or adaptation in addition to advancing gender equality.
• A renewable energy development platform collects gender-disaggregated data on energy use by end-consumers
Collection of gender-disaggregated data alone is insufficient to make a climate-finance instrument gender-responsive. Gender must be integrated in the design and implementation of the climate finance instrument.
• A climate fund aims to assess on-the-ground climate needs to identify financing gaps, but uses only on aggregated, community-level data for this.
In this case, the fund fails to adequately assess the different climate impacts faced by different genders. A key part of this Lab stream is to address the disproportionate climate impacts faced by women and gender-diverse communities. Failing to account for these would lead to a pipeline of projects that does not fully incorporate gender considerations.
The Lab adopts a non-binary and intersectional understanding of gender equality, which includes women, LGBTQ+ persons, and other gender-diverse groups.
To submit an idea for this stream, proponents must submit their idea through the general Lab application, available here. Once the proponent selects the gender equality stream as the applicable stream, the proponent will be prompted to respond to questions specific to this stream. There are no additional steps to be followed. Please note that the idea should also meet the Lab’s overall, general criteria.
Conducting a gender analysis or having a gender specialist on-board is NOT a prerequisite to apply to this stream. However, advancement of gender equality must be a core objective of the financial instrument. The Lab does welcome instruments at different stages of development; evaluation of the progress made on integrating gender considerations in the financial instrument would be done in context of the overall stage of development of the instrument.
A track record in gender-responsive climate finance is not a prerequisite. The Lab welcomes applications from climate finance practitioners that are moving towards applying a gender lens and gender equality practitioners that are moving towards applying a climate lens for their financial instruments. In the past, the Lab has supported first time fund managers, NGOs developing first-of-a-kind financial instruments, and other new innovations.
Here are some resources to get you started:
• 2X Climate Finance Task Force Toolkit (A toolkit enabling investors to identify opportunities and mitigate risks in gender and climate finance)
• Mainstreaming Gender in Green Climate Fund Projects (A practical manual to support the integration of gender equality in climate finance)
• Gender & Climate Investment: A Strategy for Unlocking a Sustainable Future (A report that supports growth of the field by raising awareness of an integrated gender and climate lens and building the business case for mainstreaming gender-smart climate finance)
For additional resources, refer to the GenderSmart Resources Library