Context and mandate

1. COP 27 requested the SCF to prepare a report for consideration at COP 28, building on the work of the SCF on definitions of climate finance, on clustering types of climate finance definition in use that could be considered within the UNFCCC process, including with a view to updating the operational definition of climate finance of the SCF, as appropriate, and supporting Parties in their national reporting efforts, and invited Parties and external stakeholders to make further submissions thereon via the submission portal by 30 April 2023.1

2. Since 2020, the SCF work on definitions of climate finance has been informed by 21 submissions of views from Parties or groups of Parties and 5 from non-Party stakeholders.2 This report builds on the SCF work on definitions of climate finance that is ongoing as part of the BA3 and that is reflected in its output from 20224 which includes the findings that the understanding of what climate finance encompasses varies, including in terms of which sectors and activities are covered, the range of financial instruments available and which tracking and reporting processes apply, and that there are different perspectives on what definitions of climate finance should include and the detail in which associated concepts should be defined. COP 27 noted that the

work of the SCF on definitions of climate finance shows the variety of definitions in use and the complexities associated with the diversity of definitions of climate finance in use by Parties and non-Party stakeholders in relation to ensuring clear, aggregated accounting and reporting of climate finance.

3. In 2024, the SCF will prepare the sixth BA, which will provide an update on ongoing technical work related to transparency of climate finance, including operational definitions. Specifically, it will include an update to thecompilation of definitions of climate finance and criteria used by Parties and institutions, and a comparison
of approaches used in the context of reporting
climate finance, such as sector-based methodologies, methodologies for estimating mobilized private finance, and domestic climate finance tracking systems.

4. The report on clustering types of climate finance definitions in use comprises this executive summary prepared by the SCF and a technical report6 prepared by external experts under the guidance of the SCF. The aim of the report is to provide information to support Parties in their efforts to report on climate finance. To that end, it was considered appropriate to adopt a guidebook-style approach and to provide examples of clusters of types of climate finance definition in use alongside decision points for use in developing and applying a self-determined definition of climate finance.