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Cambridge Institute for Sustainability Leadership (CISL)

21 November 2023 - The University of Cambridge Institute for Sustainability Leadership (CISL) launches a Loss and Damage action plan to scale up protection for the Global South.

Read the briefing

CISL’s new briefing Risk sharing for Loss and Damage: Scaling up protection for the Global South offers a breakthrough in the design of the global architecture for Loss and Damage (L&D) using the economic efficiency of risk capital markets, which can convert modest annual flows from donors into major contractual entitlements for vulnerable countries when disasters strike, now and through to 2050. 

The analysis of a diverse sample of countries illustrates approaches relevant to all countries in the L&D domain, including Small Island Developing States (SIDS), Least Developed Countries (LDCs) and Vulnerable Twenty (V20). It provides three new contributions:

  1. Quantification of current and future climate risks across national economies to 2050 using the methods and metrics of risk capital markets, so that climate financial risks from the Global South can be shared internationally.
  2. Quantification of the estimated costs of securing national economies and design of a strategic vision for action: an umbrella stop-loss to protect vulnerable countries from the impact of climate shocks on their Gross Domestic Product (GDP), so that losses above a defined level are protected by pre-arranged financing.
  3. Evaluation of how an initial allocation of USD 10 million donor funds per country could generate immediate protection for vulnerable countries, at scale, through the risk capital markets.

The briefing is an action plan for policymakers and global institutions involved in shaping the L&D agenda as wells as for the risk capital markets and makes the following recommendations:

  • For donor governments, humanitarian and development institutions and philanthropies, create L&D pre-arranged finance facilities for LDCs, SIDS and V20 as a pillar for sustainable development, humanitarian strategy and economic recovery
    • As a first step, these countries should be allocated USD 10 million of pure premium each for protecting their highest priority needs.
    • Create umbrella stop-loss mechanisms to protect national economies above defined levels of GDP. As an initial commitment, the smallest and most vulnerable countries should be protected from losing more than 10% of their annual GDP equivalent from climate shocks.
  • For SIDS, LDCs and V20 governments, prioritise risk-sharing systems, supported by international donors, as a key pillar of Loss and Damage to generate large and predictable financial entitlements in response to climate shocks.
  • For UNFCCC and climate and financial policymakers, prioritise risk-sharing systems for L&D to access the risk capital markets for scale, efficiency and predictability of funds.
  • For regional risk pools and implementing institutions, scale up existing capabilities and resources for integrating pre-arranged climate and disaster risk financing into Loss and Damage implementation.
  • For risk capital markets to recognise L&D as a distinctive landscape of demand for climate and disaster risk finance with specific needs.
  • For international financial institutions, regulators, standard setters and credit rating agencies, take climate risks into account and price in the economic value of pre-arranged L&D finance.

The briefing has been prepared with the support of ClimateWise member Howden and builds on CISL’s innovative risk-sharing work launched at COP26, Risk Sharing in the Climate Emergency.

Citing this report

University of Cambridge Institute for Sustainability Leadership (CISL). (2023). Risk sharing for Loss and Damage: Scaling up protection for the Global South. Cambridge, UK: University of Cambridge Institute for Sustainability Leadership.

Read quotes about the report here.

Published: November 2023

Authors and acknowledgements

Lead author:

Dr Ana Gonzalez Pelaez, Fellow, CISL


Dr James Daniell, Natural Hazards Engineer, Center for Disaster Management and Risk Reduction Technology (CEDIM) at Karlsruhe Institute of Technology and the University of Adelaide. CEO, Risklayer

Rowan Douglas, Chair, Operating Committee, Insurance Development Forum

Charles Langdale, Chair, Climate Risk and Resilience, Howden Group

Adarsh Narayanan Krishnan, Analyst, Climate Parametrics Practice, Howden Group

CISL team:

Sid Miller, Director, ClimateWise, CISL

Natalie Thompson, Senior Project Manager, ClimateWise, CISL

Dr Nina Seega, Director, Centre for Sustainable Finance, CISL 

Laura Deltenre, Senior Project Manager, ClimateWise, CISL

Dr Mohsen Gul, Senior Project Manager, Banking Environment Initiative, CISL

Adele Williams, Director, Communications, CISL

Asha Tharoor, Media Consultant, Communications, CISL

Maisie Ormrod, Communications Manager, Communications, CISL

Emily Hamm, Project Co-ordinator, Sustainable Finance, CISL


Advisory Board

Sara Ahmed, Finance Advisor to the V20

Dr Annette Detken, Head, Global Shield Solutions Platform

Jorge Gastelumendi, Director Global Policy, Atlantic Council

Dr Rashmin Gunasekera, Senior Disaster Risk Management Specialist, World Bank

David Howden, CEO, Howden Group

Ekhosuehi Iyahen, Secretary General, Insurance Development Forum

Jan Kellett, Team Leader Insurance and Risk Finance Facility, UNDP

Nick Moody, Co-leader, Global Risk Modelling Alliance

Justin Mundy, Chair, SLM Partners

Dr Youssef Nassef, Head of Adaptation, UNFCCC

Dr Nicola Ranger, Director, Resilient Planet Finance Lab

Tomas Soley, Chair, IAIS Financial Inclusion Forum of insurance regulators

Note: Input and guidance received from members of the Advisory Board does not imply or represent an official position, opinion, judgement or endorsement on their part or of their organisations, CISL, the wider University of Cambridge or clients.

Additional contributions

Climate Champions team: Sabrina Nagel, David Howlett, Marcia Toledo Sotillo.

COP28 Presidency: Christopher Frassetto, Helena de Jong, Anusha Seshadri.

Howden Group: Shevon Cartright, Matthew Foote, David Flandro, Rod Fox, Philipp Kusche, Hayley Langston, Martin Mak, Amy Parkes, Craig Pettengell, Kapil Radia, Elliot Richardson, Tim Ronda, Sophie Sacarello, Henrietta Southby, Man Wai Cheung, Lucy Tunkin, Victoria Waite.

Regional risk pools: Isaac Anthony (CCRIF SPC), Malvern Chirume (ARC), Yoshihiro Kawai (SEADRIF), Aholotu Palu (PCRIC).

Risklayer, CEDIM and Institute of Photogrammetry and Remote Sensing: Johannes Brand, Andreas Schaefer.

Various organisations: Izzy Ashe (FTI Consulting), Kathy Baughman McLeod (Climate Resilience For All), Antoine Bavandi (Gallagher Re), Ritu Bharadwaj (IIED), Rebekah Clement (SMI), Jamila Elmir (Private Office H.E. Razan Al Mubarak), Eduarda Fontes (Insurance Development Forum), Celia Gonzalez Haug (SUGESE), Prof Saleemul Huq (ICCCAD), Angus Kirk (Global Parametrics), Jenty Kirsch-Wood (UNDRR), Kipkorir Koskei (Insurance Development Forum), Alexandra Kriegsheim (UNFCCC), Panayotis Koulovasilopoulos (Hiscox), Dr Nathanial Matthews (Global Resilience Partnership), Ivo Menzinger (Swiss Re), Tom Mitchell (IIED), Dr Paul Munday (S&P Global Ratings), Maris Tebecis (Global Counsel).                           

This report has been prepared with the support of Howden.


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The opinions expressed here are those of the authors and do not represent an official position of CISL, the University of Cambridge, or any of its individual business partners or clients.