THE MINISTER OF FINANCE AND ECONOMIC AFFAIRS AT THE INSURESILIENCE GLOBAL PARTNERSHIP 7TH HIGH-LEVEL CONSULTATIVE GROUP (HLCG) MEETING

As a co-chair with Dr Bärbel Kofler, the Parliamentary State Secretary to Germany’s Federal Minister for Economic Cooperation and Development, to the High-Level Consultative Group (HLCG) of the G20+ and V20-led InsuResilience Global Partnership (IGP) the Minister of Finance and Economic Affairs, Honourable Seedy K.M. Keita endorsed the concept for the Global Shield against Climate Risks and agreed to take on the role of HLCG for the Global Shield. Below are the Co-Chairs’ conclusions from the meeting. Background At the beginning of 2022, the HLCG made five recommendations on how existing climate and disaster risk finance and insurance (CDRFI) support could be enhanced to better fit the needs of the most vulnerable. The HLCG emphasized the need for increasing the share of pre-arranged finance, improving coordination of solutions in countries, informing and strengthening local capacities, enabling risk-informed decision-making, and creating long- lasting resilience impacts by linking CDRFI to broader resilience planning. Building on these recommendations, Germany introduced the G7 initiative “Working towards a Global Shield against Climate Risks” at the 6th HLCG meeting on 7 April 2022 and requested feedback from HLCG members. With a view to ensuring more systematic, coherent, and sustained financial protection, Germany mobilized support for the Global Shield in the G7. The V20 reaffirmed the urgency of the Global Shield to build regional and global risk markets at their 8th V20 Ministerial Dialogue in the margins of the World Bank / IMF spring meetings on 21 April 2022. At the G7 Summit in Elmau in June 2022, G7 leaders committed to the initiative and tasked the G7 Development Ministers with delivering progress by COP27. Subsequently, the German G7 Presidency and the V20 jointly developed a concept for the Global Shield (GS) in close consultation with Program Alliance and HLCG members. The G7 will increase protection for poor and vulnerable people by substantially enhancing pre-arranged finance, insurance and social protection mechanisms against climate-fuelled disaster risks. Greater financial protection and faster and more reliable disaster preparedness and response will help to avert, minimize and address losses and damages exacerbated by climate change in a cost-efficient and effective manner. The Conclusions of the 7 th HLCG meeting. The endorsement of the Global Shield concept by the HLCG members was at the core of the 7 th HLCG meeting, which took place on 14 October 2022 in Washington, D.C., in the margins of the World Bank / IMF Annual Meetings. The panellists were delighted to have the HLCG convene in-person for the first time since the COVID-19 pandemic, with some joining virtually. At the beginning of the meeting, two special guests were welcomed: Germany’s Federal Minister for Economic Cooperation and Development, H.E. Svenja Schulze and Ghana’s Minister of Finance, H.E. Ken Ofori-Atta. Minister Schulze underlined that the Global Shield is aimed at contributing substantially to closing protection gaps with regard to climate-related losses and damages. She called on members to put their efforts behind the Global Shield in order to make protection for poor and vulnerable countries and people more systematic, coherent and sustained. Minister Ofori-Atta underlined that this historic G7-V20 cooperation can deliver a financial architecture to protect vulnerable countries against the climate emergency, by providing new and increased resources with greater urgency. Also, he announced that Ghana has joined the InsuResilience Global Partnership. Sara Jane Ahmed, Finance Advisor to the V20 Group, and Dr Martin Kipping, head of the climate policy division at Germany’s Federal Ministry for Economic Cooperation and Development, jointly presented the concept of the Global Shield to the group. Subsequently, HLCG members were asked to endorse the concept by no-objection, with the understanding that the concept will be reviewed in due course in order to learn and adjust from early experiences. The HLCG’s endorsement of the concept by all members underlined the alignment and commitment of the different stakeholder groups to deliver more systematic, coherent and sustained protection against climate and disaster risk to poor and vulnerable people and communities around the world. Also, it marked an important step towards launching the Global Shield against Climate Risks at UNFCCC COP27 in Sharm ElSheikh. Following the endorsement of the concept, HLCG members shared how their organisations plan to contribute to the successful implementation of the Global Shield against Climate Risks in 2022 and beyond. IGP Co-Chair representing V20, H.E. Seedy Keita, Finance Minister of The Gambia advocated for linking the Global Shield and in-country dialogues to the V20 Climate Prosperity Plans, as investment strategies supporting maximum ambition climate action while enhancing socio-economic outcomes. Following Minister Keita, the representatives of the V20 Group emphasised what the Global Shield can deliver: focus on mobilizing and providing access to new and timely financial resources, tackle affordability barriers through time-bound subsidization strategies, develop effective and appropriate delivery structures and include V20 representation in global governance processes. The V20 also called to expedite existing efforts, for example, to hasten implementation of the World Bank’s Global Risk Financing Facility (GRIF), to deploy existing and future resources in a timely manner. Concerned about the high indebtedness of vulnerable countries worsened by climate shocks, V20 members emphasized that financial instruments under the Global Shield should not further increase indebtedness but rather improve debt sustainability. With regards to COP27, V20 members also urged G7+ partners to deliver an implementation plan for the doubling of adaptation finance to complement the CDRFI efforts in the Global Shield. All donor country representatives expressed their strong support for the Global Shield. Germany, USA, United Kingdom, France, Switzerland, and Canada signalled additional or continued financial commitments to the Global Shield. Pledges shall be officially announced at COP27. Representatives from multilateral institutions committed to further break down silos between climate change, humanitarian aid and international development actors, and to support the Global Shield with investments in risk understanding, enabling policy environments, technical assistance and mobilisation of the private sector. Civil Society representatives advocated country ownership and the centrality of building local and regional markets, and for strong accountability and transparency mechanisms to be included in the Global Shield. The private sector backed the Global Shield by offering quality risk analytics, enhanced public-private coordination of financial protection, and by reinforcing the commitment of USD 5bn additional risk capital by 2025. Finally, academia offered methodological support to the Global Shield and access to knowledge and evidence in countries. The Co-Chairs were excited to see so many expressions of support. They promised to take up the ideas and feedback provided during the meeting and feed them into the plans for launching the Global Shield on 14 November 2022 at UNFCCC COP27 in Sharm El-Sheikh. Also, they tasked the InsuResilience Secretariat to support the process of preparing the documents needed to make the Global Shield operational. In 2023, the Global Shield against Climate Risks will start delivering on its ambitious goal: to better protect poor and vulnerable people and economies against climate risks and climate-related losses and damages. To accompany and guide the first steps of the Global Shield, the next HLCG meeting should take place in spring 2023.