Integrating Environmental and Climate Action into Development Co-operation

Finland

How are development programmes systematically integrating climate and environment objectives post-COVID-19?

Political commitments, strategies and tools

Finland’s political commitments

Development policy is an integral part of Finland's human rights-based and value-based foreign and security policy. International co-operation and Finland’s actions are grounded in the Paris Agreement on Climate Change and the goals of the 2030 Agenda for Sustainable Development. Climate change and natural resources are one of the four priorities of Finnish development policy.

The Ministry for Foreign Affairs of Finland (MFA) has an Action Plan on Climate-Smart Foreign Policy that covers all policy areas: security policy, trade policy and development policy, alike. It explicitly places climate change mitigation and adaptation as a task of every employee of the MFA.

In May 2021, the Finnish government adopted the Report on Development Policy across Parliamentary Terms. According to the report, one of the five thematic areas of Finland’s development co-operation is “climate change, biodiversity and sustainable management and use of natural resources”.

Targets

According to the Government Programme (2019), Finland will scale up climate finance as a part of its development finance, taking due account of its contribution based on the Paris Agreement. The aim is to direct half the climate finance to climate change adaptation, for example through international funds and civil society organisations. Investment-based and loan-based finance will be continued, especially for the purpose of boosting climate finance. Finland tracks progress on this as a part of its annual results-based management process.

Strategies and policies for systematic integration

The MFA has elaborated theories of change and aggregate indicators of its development policy. In the Thematic Priority Area 4 (Climate change and natural resources), climate change mitigation and adaptation are explicit goals at the impact level. The five outcome areas are: 1) forests and biodiversity; 2) energy; 3) meteorology and disaster risk reduction; 4) food and nutrition security; and 5) water.

The theories of change based on Finland’s priority areas complement the general impact objectives set by the Government by providing more detailed information on the most important outcomes and outputs in Finland’s development policy. The theories of change also illustrate the mechanisms through which Finland’s development policy contributes to global sustainable development and to the implementation of the so-called humanitarian imperative. They support the guidance, monitoring and evaluation of activities.

Development policy is carried out in line with the objectives set out in the theories of change so that different entities, such as country programmes, multilateral advocacy, co-operation with civil society organisations, and co-operation with the private sector are linked to the objectives in a manner that is appropriate for the activity in question.

The theories of change also help to form a picture of thematic entities to which individual actions or projects belong. Using them, it is easier to talk about Finland's development policy priorities and clarify different parties’ accountability and responsibilities, as well as to analyse Finland's own input in international development results.

Box 1. Creditor reporting system’s environmental and climate markers

Figure 1. Finland’s integration of climate objectives

Note: “Other environmental markers” include biodiversity, environment and desertification that do not overlap with mitigation and adaptation. Biodiversity-related ODA is integrated in the columns, as well as presented separately for better visibility.

Source: OECD (2021), Creditor Reporting System (database), https://stats.oecd.org/Index.aspx?DataSetCode=crs1

Operational tools for systematic integration

In 2020, the MFA published the Guideline for Crosscutting Objectives in the Finnish Development Policy and Co-operation. The crosscutting objectives of Finnish development policy are: 1) gender equality; 2) non-discrimination, with a focus on the rights of persons with disabilities, and in line with the Paris Agreement; 3) climate resilience; and 4) low-emission development.  

The guideline supports the effective implementation of the Finnish Development Policy and its crosscutting objectives, through mainstreaming and targeted action. In line with the Human Rights Based Approach in Finland’s Development Co-operation Guidance Note (2015), the Guideline aims to strengthen the quality and accountability of Finland’s development policy by integrating human rights and the crosscutting objectives to all relevant results management systems.  

Furthermore, Finland has recently added a fifth crosscutting objective – protection of the environment, with an emphasis on safeguarding biodiversity. The addition is based on the Report on Development Policy across Parliamentary Terms, adopted by the Government in May 2021 (still subject to the approval by the Parliament). 

Most of Finland’s development co-operation is channelled through multilateral organisations. They usually have their own operational tools. If an implementing organisation does not have its own tools, for example for environmental assessment, they are asked to use the International Finance Corporation (IFC) Safeguards or other similar tools, as well as to comply with the national requirements of the host country. 

Monitoring, evaluation and learning frameworks

The MFA is not an implementing agency; therefore, it is the implementing organisations that are responsible for integrating the relevant objectives in their respective monitoring, evaluation and learning (MEL) frameworks.

The overall results of Finland's development policy are monitored using common aggregate indicators across different development co-operation instruments. The implementation is systematically directed based on the information obtained through the indicators.

The common aggregate indicators have been created based on the priority areas of development policy. This enables comprehensive reporting on results, which combines data from programmes and various forms of co-operation from different parts of the world. This leads to a more accurate picture of the results of Finland’s development policy.

How are development programmes supporting country-owned transitions to environmentally sustainable, low-emissions and climate-resilient development pathways?

Supporting national transition plans that are commensurate with international objectives

Finland encourages implementing partners to align their development co-operation activities with national transition strategies. This recommendation is explicitly integrated on page 5 of the Guideline for Crosscutting Objectives in Finland’s Development Policy.

Examples of projects to support national transition plans

Most Finnish development co-operation is implemented by multilateral organisations. As an example of multilateral finance, Finland funds the United Nations Environment Programme (UNEP) (core funding), and made an additional disbursement to support the launch of the United Nations (UN) Decade for Ecosystem Restoration, which contributes to the land degradation neutrality targets.  

In 2019, the top receivers of Finland’s climate finance were the Finland-IFC Climate Fund, the Green Climate Fund (GCF), the International Fund for Agricultural Development (IFAD), the International Development Association (IDA) and the Asian Development Fund (ADF). Many of these support climate-resilient and low-emissions pathways, e.g. development and implementation of Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs) in developing countries. One example is the GCF and its Readiness and Preparatory Support programme, which finances formulation and implementation of NAPs. 

Implementing the transition to environmentally sustainable, low-emissions and climate-resilient development pathways

As highlighted in Finland's human rights-based and value-based foreign and security policy, Finland’s actions are grounded in the Paris Agreement on Climate Change and the goals of the 2030 Agenda for Sustainable Development. All actions take into account the crosscutting objectives, including climate resilience and low-emissions development. Support to partner countries for transitions that are environmentally sustainable, climate-resilient and consistent with low-emissions development pathways towards net-zero is mainly channelled through multilateral co-operation, through multilateral development bank (MDBs), dedicated climate funds and other international organisations.  

Support for sustainable, quality infrastructure

Finland initiated and continues to finance the Energy and Environment Partnership Programme in Southern and East Africa that provides project preparation and business development support to develop quality infrastructure to meet the energy access needs of local communities.  

In addition, Finland’s Public Sector Investment Facility provides financing for technology transfer and capacity building for quality infrastructure investment. One of Finland’s strengths is support for weather observation infrastructure. 

Most of Finland’s development co-operation finance that supports quality infrastructure is channelled through multilateral organisations, including MDBs.  

Examples of projects in support of environmentally sustainable, low-emissions and climate-resilient transitions

Most of Finland’s development co-operation finance in support of transitions is channelled through multilateral organisations. Finland does not have bilateral programmes that would have been explicitly designed to support these transitions.

How are development programmes supporting SIDS to achieve sustainable development?

Responding to the particular needs of SIDS

The geographical focus of Finland’s development co-operation is Africa, with a special focus on the Least Developed Countries (LDCs). Finland does not have bilateral co-operation with any Small Island Developing States (SIDS) but contributes to several multilateral initiatives.

Examples of projects in support of SIDS’ sustainable development

Finland is a long-term contributor to the GCF, the Global Environment Facility (GEF), and the Least Developed Countries Fund (LDCF), which all fund climate action in SIDS.

In addition, in late 2020, Finland joined, as a financer, CREWS (Climate Risk and Early Warning Systems), which is a mechanism that funds LDCs and SIDS for risk-informed early warning services in order to better equip them to forecast and respond to climate risks.

Supporting SIDS’ access to finance

Many multilateral organisations and funds, which Finland contributes to, have their own programmes to improve SIDS’ access to finance for sustainable and resilient development.