International Development Committee Inquiry: The UK’s International Climate Finance
The Wildlife Trusts (www.wildlifetrusts.org) are a federation of 47 nature conservation charities spanning the UK, Isle of Man and Alderney. We are conservation and restoring nature across the UK, including Nature-based solutions funded by corporate businesses. The project with Aviva to restore temperate rainforest across the UK is one example of this (www.wildlifetrusts.org/temperate-rainforest-restoration). The Wildlife Trusts are acutely conscious of working in a local to global, and global to local way and believe that International Climate Finance has a crucially important role to play for the world.
Our summary recommendations are as follows:
- The pledge to spend £3bn of the £11.6bn International Climate Finance 3 (ICF3) budget on nature-based solutions has been transformational. This precedent must be built on, with at least a third of ICF4 being earmarked for nature-based solutions to climate change. This funding supports vital programmes, from the Biodiversity Challenge Funds (such as Darwin and Darwin Plus) to innovative programming supporting Indigenous Peoples & Local Communities secure tenure and improved management of their forests.
- Not all nature-based solutions can be monetised, and the private sector cannot readily fund nature in the poorest locations with unbanked populations and subsistence economies. ICF public funding on nature should therefore prioritise grant finance as its most valuable contribution to the overall funding ecosystem. It should also reduce allocations to multilateral institutions which do not primarily deliver grant finance.
- The transparency of ICF4 needs to be radically improved. An itemised list of all UK ICF spending should be published within six months of every calendar and financial year-end in a publicly interrogatable spreadsheet format. This will improve the unjustifiably opaque current situation where the public can have to wait up to three years to learn of ICF spending in a given year, and even then cannot readily ascertain what exact climate and nature spending has taken place in which countries and for what environmental outcomes.
ICF for Nature-Based Solutions
Over half of the global economy is highly or moderately dependent on nature,[1] but human development and wellbeing is now deeply imperilled by record-breaking floods, droughts, heatwaves, and wildfires. The climate and nature crisis impacts the poorest and most vulnerable first and hardest, exacerbates inequality, and intersects with many other development issues: agriculture, economic development, gender (women and girls often being worst affected), water, food, health, migration, security and conflict. Unless there is a stronger response to the climate and nature crisis, development progress will be reversed, particularly in the Global South, with the destruction of life, livelihoods, and local economies. For UK aid and taxpayer money to continue to make progress on reducing poverty and improving the wellbeing of the world’s most vulnerable, investment in addressing the joint crises of climate and nature is essential.
The decision to earmark £3bn of ICF3 for nature-based solutions between 2021-26 has been transformational. Despite all the aid cuts, it is highly laudable that the Government is still on track to deliver on this pledge by March 2026. ICF3 has produced some impressive results for climate and nature, demonstrating the impact that UK Government spending on international climate and nature can have.
As the ICF3 pledge expires in March, advanced discussions are underway within Whitehall on the scale and modalities of funding for the successor ‘ICF4’, which is expected to run from 2026–2031. If the June 2025 Spending Review prioritisation of ‘climate and nature’ as one of the top three priorities for UK ODA is to be realised, it is essential that ICF4 maintains an explicit sub-commitment for nature-based solutions. We are therefore calling for one third of ICF4 to be dedicated to nature.
The sub-pledge has been instrumental in focusing ODA on delivering multiple co-benefits for people, nature, and climate, and has influenced other countries to follow suit. Not renewing the sub-pledge would send the wrong signal about the UK’s priorities and leadership.
We note there are clear nature success stories on this within the Government’s ODA portfolio. For instance, the Biodiversity Challenge Funds (BCFs), including the Darwin Initiative, Darwin Plus, and Illegal Wildlife Trade Challenge Fund, deliver significant impacts beyond their scale of investment (<0.05 % of total ODA) and have an impressive legacy. The BCFs have had a critical and proven impact on iconic terrestrial and marine ecosystems, strengthening resilience and poverty reduction, supporting improved livelihoods (including for women and girls) and in promoting the UK’s reputation for being at the forefront of science and sustainable development. They exemplify a truly integrated approach to advancing environmental, social, and economic goals simultaneously with their strong links to poverty and climate outcomes.
The Need to Prioritise Grant Finance
It is clear that major financing from both the public and private sectors will be needed to address the climate and nature crisis. However, large-scale private sector investments can only flow to communities and ecosystems where there is a functioning market and returns are possible. Many of the world’s sites richest in biodiversity are remote, with very poor local populations unbanked and operating subsistence economies. It is not possible for return-seeking capital to readily invest here. The only source of finance is public sector grant finance, and this must be prioritised in future ICF spending if we are to fund the areas of highest need from the appropriate sources of potential capital.
Transparency
There is a major need to significantly improve the transparency of ICF spending. At present the Government cannot give a clear year-by-year and country-by-country breakdown of its climate and nature programming, partly as so much has been contributed into multilateral institutions with slow and unclear disbursements. More crucially, it is now the approach to only publish ICF spending biannually, and normally even then with a 12-month lag from the previous years spending. This means that taxpayers will not formally get to understand how the UK Government spent its 2023 ICF until the end of 2026, making any reasonable level of scrutiny and accountability impossible. A very specific transparency recommendation is needed from the Committee that calls on the Government to publish its detailed ICF spending in an interrogatable spreadsheet format within six months of the calendar and financial year-end.