The Indigenous World 2026: Green Climate Fund (GCF) and the Fund for Responding to Loss and Damage (FRLD)

Written on 22 April 2026. Posted in The Green Climate Fund (GCF)

The UN Framework Convention on Climate Change (UNFCCC) has established several funds commonly known as climate funds to support so-called developing countries to mitigate climate change, adapt to its effects, and transition to low-carbon, climate-resilient economies. Despite these objectives, Indigenous Peoples often experience negative impact from the projects and encounter many barriers to accessing those funds. They therefore advocate to ensure direct access and better implementation of the projects.

The Green Climate Fund (GCF), established under the UNFCCC in 2010 and operational since 2015, is the world's largest climate fund. It supports developing countries to achieve their Nationally Determined Contributions (NDCs) and pursue low-emission climate-resilient pathways.^[1] The GCF's primary mandate is supporting the Paris Agreement's 1.5°C temperature goal. The GCF receives financial contributions from so-called developed countries (UNFCCC Annex-1) as well as from public, non-public and alternative sources.^[2]

The GCF's Initial Resource Mobilization (2014) raised USD 10.3 billion in pledges, with USD 7.2 billion available for commitments. The first replenishment (GCF-1, 2020-2023) raised USD 10 billion, with USD 9.9 billion received and invested across 100+ countries.^[3] The second replenishment (GCF-2, 2024-2027), launched in July 2022, had received USD 10.64 billion in pledges as of December 2025.^[4]

The GCF operates through a network of over 200 Accredited Entities (AE) and delivery partners to deliver funding to developing countries for project design and implementation. Its Board consists of 24 members equally representing Annex-1 and Non-Annex 1 Countries, with four Active Observers (AOs) from civil society and private sector organizations (PSOs) serving two-year terms (maximum two consecutive terms).

Regardless of consistent advocacy, the GCF does not have an AO seat for Indigenous Peoples despite this being an established UNFCCC practice. Nonetheless, the Indigenous Peoples’ Policy adopted in 2018 and the Indigenous Peoples’ Advisory Group (IPAG) established by the Policy in 2022 are remarkable achievements of Indigenous Peoples and their allies in the GCF. Besides engaging in the CSO Network, Indigenous Peoples advocate through the Indigenous Peoples’ Advocacy Team (IPAT).

The Fund for Responding to Loss and Damage (FRLD) was formally launched at the 27^th Conference of the Parties (COP27) to the UNFCCC in 2022 and further operationalized at COP28 in 2023. It aims to support developing countries to address the irreversible impacts of climate change, particularly those that exceed the scope of adaptation efforts, such as extreme weather events, desertification, and rising sea levels.

While the FRLD marks a significant milestone in global climate finance, ensuring direct access for Indigenous Peoples remains a major challenge. The FRLD Board has adopted the “access modality” “decision-making structure” and conducts discussions about its policies. It is no different from existing climate funds, which have complex eligibility requirements and government-controlled funding channels. The FRLD provides financial support through grants and concessional financing, with the World Bank serving as its interim Secretariat and host for the first four years. Indigenous Peoples and many other actors are, however, advocating for a fully independent secretariat and governance structure to ensure equitable and effective fund distribution.

The FRLD is still establishing its full Secretariat and operational structures. However, it has yet to develop its comprehensive social and environmental policies and long-term fund mobilization strategies. The projected economic cost of loss and damage by 2030 alone has been estimated at between USD 290 and 580 billion^[5] just in developing countries. By 2050, the economic cost of loss and damage in developing countries is estimated to be between USD 1 to 1.8 trillion.^[6] This data shows the urgent need for increased funding commitments and clearer implementation frameworks. According to its report ‘Status of Resources-2025’,^[7] the FRLD had received pledges and contributions totalling USD 788.68 million from 27 contributors.

This article is part of the 40^th edition of The Indigenous World, a yearly overview produced by IWGIA that serves to document and report on the developments Indigenous Peoples have experienced. Find The Indigenous World 2026 in full here

Overview

As of 31 December 2025, the GCF Board had approved a total of 336 projects, with project investment commitments amounting to USD 19.3 billion and projects under implementation of USD 16.7 billion. Projects are considered under implementation once the Funded Activity Agreement (FAA) with the Accredited Entity (AE) becomes effective. It has disbursed USD 6.3 billion and estimates that these projects will help 1.6 billion people and will contribute to preventing the emission of 3.2 billion tonnes of CO₂ equivalent.^[8]

In terms of project scales, micro- and small-scale projects constitute less than half of the portfolio (10% and 37%), while medium and large-scale projects account for 35% and 18%, respectively. Notably, the micro-scale projects decreased by 1% from 2024-2025 and the large-scale projects remain in the same percentage of the projects’ portfolio. The size of a project is important, given that larger projects pose a higher risk of negative impacts on nature and human rights.

In terms of financial instruments, the project investment amount comprises 45% grants, 38% loans, 12% equity, 3% results-based payment, and 2% guarantees.^[9] Between 2024 and 2025, grants and equity increased by 3% and 1% respectively, while loans still hold a significant portion of the portfolio. The high proportion of loan-based investments in the GCF portfolio raises concerns, as it contradicts Paragraph 9.4 of the Paris Agreement,^[10] which emphasizes the need for scaled-up financial resources that are primarily grant-based, for developing countries.

A significant amount is being invested in the “livelihood of people and communities”. However, there is no data available on how these investments benefited Indigenous Peoples. This is followed by investments in “health, food and water security”, “ecosystem and ecosystem services”, “infrastructure and built environment”, “energy generation and access”, and “forest and land use”. Notably, most interventions on forest and land use, as well as energy generation across the world, have had negative impacts on Indigenous Peoples. Among the eight GCF result areas, the lowest investment is directed to “transport” and “building, cities, industries and appliances”.^[11]

By investment theme, 59% of funding goes towards adaptation and 41% towards mitigation in grant-equivalent terms. In nominal terms, adaptation constitutes 50% and mitigation 50% of the portfolio. Between 2024 and 2025, the GCF have had a better balance between mitigation and adaptation funding by increasing the adaptation portfolio by 4% in nominal terms. In terms of access modality, 74% of funds are still accessed by international AEs, 16% by national Direct Access Entities (DAEs), and 10% by regional DAEs. This data indicates a 1% increase in both national and regional DAEs between 2024-2025.^[12]

These figures show the GCF’s emphasis on quantifiable project impacts, primarily measured in terms of tonnes of CO₂ equivalent mitigated and the number of people increasing their resilience. The data also shows the Fund remains heavily accessed by international AEs, limiting opportunities for direct access by national and regional entities. A 1% increase was recorded in the access of both national DAEs and regional DAEs between 2024-2025. Beyond these quantitative metrics, it is equally important to enhance direct access and ensure available data on the projects’ social, cultural, economic, and ecological impacts, with special emphasis on the well-being of Indigenous Peoples and communities. The Strategic Plan for the GCF (2024-2027) provides a foundation for maximizing positive social and cultural outcomes, including for Indigenous Peoples. In addition, the REDD+ policy approved in 2024 provides some provisions for safeguarding Indigenous Peoples’ rights in REDD+ result-based payments funded by the GCF. Those elements need to be strengthened in the Fund’s activities.

Independent Evaluation of the GCF’s Approach to Indigenous Peoples

Following the Board’s decision, the GCF’s Independent Evaluation Unit (IEU) carried out an evaluation of “The GCF’s Approach to Indigenous Peoples”.^[13] By applying mixed methods of data-collection, including literature review, the evaluation team conducted interviews with more than 300 stakeholders, and five case studies came up with key findings,^[14] which can be summarized as follows.

1. The GCF’s approach towards Indigenous Peoples is defined primarily by the Indigenous Peoples’ Policy.
2. The Policy is consistent with the UNFCCC’s guidance to the GCF but needs better alignment with operational details.
3. Some inconsistent terms and concepts, and also the gap in integrating the Indigenous Peoples’ Policy with the safeguarding policies, may lead to inconsistent application.
4. The IPAG holds promise for implementing the Policy effectively although it is still establishing its institutional linkages and resources.
5. GCF lacks a clearly defined commitment to providing Indigenous Peoples with specific access to resources or benefits.
6. GCF represents a systematic challenge to Indigenous Peoples in accessing GCF resources directly.
7. GCF is the only major multilateral climate fund without a specific mechanism to support Indigenous Peoples.
8. The GCF’s approach to Indigenous Peoples is perceived primarily as a compliance exercise rather than an opportunity to harness the contribution of Indigenous Peoples in implementing climate actions and achieving meaningful results.
9. Alternative access modalities such as the simplified approval process (SAP) and project specific assessment approach (PSAA), and technical assistance modalities such as the Project Preparation Facility (PPF), have not sufficiently incorporated Indigenous Peoples’ considerations.
10. The Readiness and Preparatory Support Programme (RPSP) can be a crucial modality for integrating Indigenous Peoples’ considerations into GCF programming.
11. Promotion of the knowledge of Indigenous Peoples into projects remains conditional upon availability of time and resources.
12. The GCF lacks portfolio-level commitments focusing on Indigenous Peoples and its monitoring and results measurement systems do not thus track specific Indigenous Peoples-related indicators, making it impossible to assess Fund-wide results regarding Indigenous Peoples.
13. The GCF's monitoring framework does not mandate tracking or reporting co-benefits related to Indigenous Peoples.
14. Indigenous Peoples face general issues in accessing redress using the GCF’s architecture.
15. There is mixed evidence on the effectiveness of grievance redress mechanisms (GRMs) at the project level. In some cases, the GCF’s Independent Redress Mechanism (IRM) has addressed grievances, including those related to project closure.
16. The GCF does not play a proactive role in implementing the Indigenous Peoples’ Policy, and the Policy’s implementation is highly variable and falls outside of the GCF’s direct sphere of influence.

Based on these findings, the IEU has made following recommendations.

1. In the short term, the GCF should continue to reinforce the Indigenous Peoples’ Policy and Operational Guidelines while calibrating its operational tools to fully implement the intended objectives of the Policy.
2. In the short to medium term, the GCF Secretariat should establish mechanisms and provide resources, including technical and financial support, for the effective implementation of the Indigenous Peoples’ Policy, in line with its aspirations.
3. The GCF should urgently address the limitations in its planned oversight of compliance, ensuring sufficient flexibility to adapt the Indigenous Peoples’ Policy to a diversity of contexts and non-compliance risks.
4. In the medium to long-term, the GCF must address fundamental systemic barriers within the business model that limit the extent to which Indigenous Peoples can access the GCF. The GCF should consider an Indigenous Peoples-specific window or program.
5. The GCF must further clarify its strategic position on Indigenous Peoples beyond seeking inputs before projects. As the GCF articulates its position/stance through ongoing restructuring and strategic decisions, providing clear direction on its approach to Indigenous Peoples is essential.

The evaluation report was presented to the Board at its 41^st meeting, where the IPAG addressed the Board in support of the conclusions of the report and reiterated the need to operationalize an Indigenous Peoples-specific window, developing targets, indicators and monitoring systems, disaggregated data and promoting Indigenous Peoples’ knowledge, among other points.

GCF Independent Redress Mechanism (IRM)

The Independent Redress Mechanism (IRM) is one of the three independent integrity units independent of the Secretariat, which reports directly to the Board. IRM plays an important role in overseeing the Fund's investments and management. It addresses complaints by people who believe they are negatively affected or may be affected by the GCF projects or programs.

As of December 2025, 17 cases had been registered with the IRM.^[15] Of those 17 cases, 11 have been closed and the rest are in different stages of compliance investigation, problem solving and monitoring. The first GCF-funded project, FP001 in Peru,^[16] had to go through the recourse after an IRM self-initiated investigation in 2019. If the IRM receives information from a credible source that a GCF project or program has or may negatively impact a community or person, it may initiate investigation. The key harms raised of FP001 were related to land ownership and land possession, Indigenous Peoples’ rights including Free, Prior, and Informed Consent (FPIC), project due diligence, environmental and social impact assessment, and project categorization. When the case was registered, the Secretariat agreed to provide remedial actions to those risks. Such actions included: i) FPIC, ii) risk categorization vis-a-vis involving Indigenous Peoples, iii) completion of a legal assessment/opinion examining the potential impacts of the creation of the Áreas de Conservación Ambiental (ACA) on the collective land rights of Indigenous Peoples, and iv) consent documentation submitted by Profonanpe (Accredited Entity - AE). IRM monitored the implementation of those remedial actions provided by the Secretariat. Upon receipt of the final progress report from the Secretariat stating that AE’s actions were compliant with the guidance, the IRM decided not to initiate proceedings and to close the case in January 2023.^[17] In this case, significant institutional and project-level improvements were made based on the recommendations of the IRM.

A complaint to FP146 Nicaragua was received in June 2021 alleging the harming of Indigenous Peoples and Afro-descendant communities, increased environmental degradation and attacks by armed non-indigenous settlers, and the non-compliance or inability of the AE and Executing Entity to comply with GCF Policies and Procedures and the Conditions placed by the Board during approval of this project. After concluding its investigation, the IRM submitted the final compliance report to the Board in 2022. The Board considered the IRM Compliance Review Report during its meetings held in October 2022 (B.34), March 2023 (B.35), and July 2023 (B.36). The Secretariat released a summary of the final Board decision on C-0006 Nicaragua, the reasons for the decision and the management response to the report, and FP146 was terminated in July 2023.^[18] In 2025, the IRM had six registered cases.

Fund for Responding to Loss and Damage (FRLD)

Overview

The FRLD is accountable to and functions under the guidance of both the UNFCCC COP and the CMA.^[19] For key decision-making, the FRLD has a Board of 26 members comprising 12 from UNFCCC Annex-1 Countries and another 14 from Non-Annex Countries.^[20] In 2025, it held three board meeting (B.5, April 8-10 in Bridgetown, Barbados. B.6, July 9-11 in Cebu, Philippines. B.7, October 7-9 in Manila, Philippines).^[21]

The B.5 adopted a decision to establish the “Barbados Implementation Modalities (BIM)” as the start-up phase of the Fund, “consisting of a first set of interventions, for the calendar years of 2025 and 2026 for an amount of USD 250 million”.^[22] The BIM decision took time to discuss two key issues: the “scale” and the “minimum allocation floor” for the Small Island Developing States (SIDS) and the Least Developed Countries (LDCs). The B.5 also decided the following principles of BIM:

1. Support bottom-up, country-led and country-owned approaches.
2. Implement in parallel with the development of the longer-term operational policies and procedures of the Fund.
3. Finance a set of activities, projects and programs that is representative of the full scope of the Fund.
4. Explore engagement with the private sector, where relevant.
5. Finance the BIM through grants.

The B5 decided that “an amount in the range of USD 5-20 million may be allocated to each of the activities, projects and programs to be approved during the start-up phase, subject to funding criteria to be approved by the Board”.

The B.6 focused on advancing key elements of operationalizing the BIM, including funding criteria, project cycle, and interim guidance on the role of National Designated Authority (NDA). The Board reinforced its decision to consider “blanket” accreditation of observers for an interim period, under which observer organizations already accredited to the UNFCCC may ask to be considered as an accredited observer organization of the Fund.

Building on B.6 discussions, the B.7 concluded with the operationalization of the BIM with decisions on the following elements:

1. Funding criteria.
2. Funding cycle.
3. Access modalities.
4. List of implementing entities that are accredited to the GCF, Global Environment Facility (GEF) and Adaptation Fund (AF) based on the modalities agreed under the decision on access. These implementing entities will be eligible to implement projects and programs for countries and enable direct budget support.

Following adoption of these key decisions, the Secretariat of the FRLD is mandated to develop the guidebook, Terms of Reference (ToR) and template for the call for proposals for the BIM. Civil society called for the BIM to demonstrate small grants and direct access to communities, including of Indigenous Peoples. The long-term resource mobilization strategy for the FRLD still has divergent views between developing countries, who have sought to fill the Fund in line with the scale of their needs, and developed countries, who wish to expand sources in order to diminish their responsibility for filling the Fund. The concerns of CSOs and Indigenous Peoples about the World Bank as a trustee and the host of the Secretariat are growing as it is increasingly clear that World Bank policies and processes are impeding the potential for the FRLD to be an innovative and different Fund that can ensure equitable and effective distribution of funds.

Going forward

Establishing dedicated arrangements for Indigenous Peoples’ access and their organizations is crucial in both funds as steps forward, and efforts to achieve this are already underway. For the past few years, the Nepal Federation of Indigenous Nationalities (NEFIN), in partnership with the International Work Group for Indigenous Affairs (IWGIA), the Indigenous Peoples’ International Centre for Policy Research and Education (Tebtebba Foundation), the Centre for the Autonomy and Development of Indigenous Peoples (CADPI), the Pastoralists Indigenous Non-Governmental Organizations’ Forum (PINGO’s Forum), IPAG and the GCF CSO Network, has consistently advocated for placing human rights and Indigenous Peoples’ rights at the heart of GCF policies and operations. Maintaining this momentum is key as the GCF embarks on its 2024-2027 strategic plan.

In the context of the FRLD, NEFIN and other Indigenous Peoples’ organizations, as well as IWGIA and other NGOs, have long advocated for placing Indigenous rights at the heart of climate finance, including within the FRLD, even before its establishment. Their efforts have been fundamental in promoting a more inclusive and equitable approach to climate finance, ensuring that Indigenous Peoples – who suffer irreversible tangible and intangible losses and damages – have direct access to funding and decision-making processes. As the FRLD moves towards full operationalization in the coming years, continued advocacy is essential in shaping its governance, ensuring a dedicated seat as an active observer, full and effective participation in Board meetings and related proceedings, development of an Indigenous Peoples’ Policy and other safeguard measures, and broader participation in activities on the ground.

Sustained advocacy, strong partnerships, and active engagement, alongside the effective implementation of Indigenous Peoples’ policies and safeguards, are essential to ensure that funding is distributed fairly and appropriately. Without these efforts, these climate funds risk replicating existing barriers in climate finance, limiting Indigenous participation and, therefore, failing to meet their objectives.

Tunga Bhadra Rai belongs to the Rai Indigenous Nationality of Nepal. He is an Indigenous researcher and anthropologist currently working as the Director of the Climate Change Program of the Nepal Federation of Indigenous Nationalities (NEFIN). He engages at the UNFCCC, GCF, FRLD and in other national and international fora. Mr. Rai has published articles on Indigenous Peoples. Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

This article is part of the 40^th edition of The Indigenous World, a yearly overview produced by IWGIA that serves to document and report on the developments Indigenous Peoples have experienced. Find The Indigenous World 2026 in full here

Notes and references

^[1] Green Climate Fund. (n.d.). “Overview. About GCF.” Accessed 3 January 2026.

https://www.greenclimate.fund/about

^[2] Green Climate Fund. (n.d.) “Governing Instrument of the Green Climate Found.” Accessed 4 January 2026. https://www.greenclimate.fund/sites/default/files/document/governing-instrument.pdf

^[3] Green Climate Fund. (n.d.). “Resource Mobilization.” Accessed 9 January 2026.

https://www.greenclimate.fund/about/resource-mobilisation

^[4] Green Climate Fund. (2025). “Status of Pledges”. Accessed 23 January 2026.

Status of Pledges (2016.9.10)

^[5] Mechler, Reinhard; Bouwer, Laurens M.; Schinko, Thomas; Surminski, Swenja; and Linnerooth-Bayer, JoAnne. (2019). Loss and Damage from Climate Change: Concepts, Methods and Policy Options. Cham: Switzerland. https://link.springer.com/book/10.1007/978-3-319-72026-5

^[6] Heinrich Boll Stiftung. (n.d.). Unpacking finance for Loss and Damage. Accessed 2 February 2026. https://us.boell.org/en/unpacking-finance-loss-and-damage

^[7] Fund for Responding Loss and Damage. (2025). Status of Resources: Report of the Trustee. Accessed January 26, 2026. https://unfccc.int/sites/default/files/resource/FRLD_B.5_6_Status_of_resources_report_of_the_Trustee.pdf

^[8] Green Climate Fund. (n.d.). “Projects and Programs.” Accessed 23 January 2026. https://www.greenclimate.fund/projects/dashboard

^[9] Ibid.

^[10] United Nations Framework Convention on Climate Change. (2015). Paris Agreement. Accessed 2 February. unfccc.int/sites/default/files/english_paris_agreement.pdf

^[11] Green Climate Fund. Accessed 2 February. Portfolio dashboard | Green Climate Fund

^[12] Ibid.

^[13] Independent Evaluation Unit of the Green Climate Fund. Accessed 2 February 2026. ieu-work-plan-budget-2023.pdf

^[14] Ibid.

^[15] Independent Redress Mechanism of the Green Climate Fund. Accessed 2 February 2026. Case register | Independent Redress Mechanism | Green Climate Fund

^[16] Ibid.

^[17] Independent Redress Mechanism of the GCF. Accessed 26 January 2026. C0002 Peru | Independent Redress Mechanism | Green Climate Fund

^[18] Green Climate Fund. Accessed 26 January 2026. Update on FP146: Bio-CLIMA Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres | Green Climate Fund

^[19] United Nations Framework Convention on Climate Change (UNFCC). “Climate Finance-Fund, Entities and Bodies: Fund for Responding to Loss and Damage.” Accessed 16 January 2026.

https://unfccc.int/loss-and-damage-fund-joint-interim-secretariat

^[20] Ibid.

^[21] Fund for Responding Loss and Demange. Accessed 2 February 2026. Board Meetings | The Fund for responding to Loss and Damage (FRLD)

^[22] Ibid.

Tags: Global governance