On November 16th, 2023, the Centre for Disaster Protection published its State of Pre-arranged Financing 2023 report, which sheds light on the current landscape of pre-arranged financing for disasters. The report provides a comprehensive analysis of international crisis financing, revealing that a mere 2.7% of the USD71 billion international crisis financing in 2021 was earmarked for pre-arranged finance. This signals a significant gap in the allocation of resources toward anticipatory action and crisis response planning. Anticipatory action is a critical component of risk-informed action, as it ensures that life-saving assistance can reach vulnerable populations quickly and reliably. In addition, these economic interventions can lessen the severity of disaster impacts, protect lives, and preserve livelihoods. Anticipatory action is proven to be cost-effective, with upfront investments in preparedness leading to long-term savings compared to reactive responses. Despite this fact, only 0.2% of humanitarian funding reported to the OECD DAC in 2021 was directed towards anticipatory action. The Centre for Disaster Protection’s research also found that low-income countries – the nations and people most at risk from climate impacts – are receiving just 3.7% of international development financing for pre-arranged finance, with the majority going to high-income and upper-middle-income countries (42.6%) and lower-middle-income countries (38.2%).
The State of Pre-arranged Financing’s call for collaboration and a reinvigorated commitment to adequate pre-arranged financing resonates as a crucial step toward building resilience and protecting communities in the face of growing climate-related challenges.
The ‘Getting Ahead of Disasters’ Charter
Getting Ahead of Disasters: A Charter on Finance for Managing Risks in an initiative of the UAE COP28 Presidency, which sets the stage for a more resilient future by laying out five principles to enhance the use of finance to mitigate risks and protect the most vulnerable from climate-related disasters. The Charter is a visionary initiative by governments, international organisations, and entities across climate, development, humanitarian, and private sectors, which aims to transform the current state of pre-arranged financing. Through cross-sectoral and international commitment to principles such as shifting to proactive action, coordinating finance across sectors, and prioritising locally led approaches, the charter can bridge the existing funding gaps so clearly highlighted in the State of Pre-arranged Financing report.
From Evidence to Informed Early-Action: Leveraging Data for Better Decision-Making
The data presented urge all decision-makers and stakeholders involved in providing and allocating finance for disasters, to act earlier. The 'Getting Ahead of Disasters' Charter serves as a pivotal complement to the State of Pre-arranged Financing report by providing a structured framework for translating the report's data-driven insights into actionable strategies. The report's advocacy for improving pre-arranged financing aligns seamlessly with the Charter's commitment to maximising efforts to advance finance for disasters, offering a clear pathway to foster a more resilient and proactive disaster financing landscape for the most vulnerable.
Both the report and the charter emphasise the critical need for global collaboration in the pursuit of 'getting ahead of disasters'. The Charter will support the operationalisation of the insights garnered from the report and amplify the urgency of the call to action by showcasing the potential impact of coordinated efforts to advance finance for disasters.
The ‘Getting Ahead of Disasters’ Charter will be launched by the UAE COP28 Presidency, the Government of Samoa and the UK Government on 3rd December on the Relief, Recovery and Peace Day of COP28. Endorsement of the Charter and the development of concrete commitments towards implementation of its principles can now begin.
Further information and links:
Find more information on Getting Ahead of Disasters and links to the Charter and endorsement forms on the REAP website here.
Download the Centre for Disaster Protection State of Pre-arranged Financing 2023 report here and review the report’s key messages here.