Improvements are needed in the planning, monitoring and reporting of Finland's increasing international climate finance

In line with the objective contained in the Government Programme, Finland’s international climate finance is increasing. However, the Ministry for Foreign Affairs lacks a public plan for the allocation and objectives of this increasing finance. Forming an overall picture of the effectiveness of the finance is difficult, as the Ministry for Foreign Affairs has reported scarcely on this matter.

The National Audit Office of Finland has examined the prerequisites provided by the steering of Finland’s international climate finance for its effectiveness. In 2017–2019, the climate finance reported by Finland amounted to approx. EUR 47–147 million and accounted for about 6% to 15% of the total spending on development cooperation. The policy of the current Government is that Finland’s climate finance will be increased and that efforts will be made to allocate it equally to climate change mitigation and adaptation.

The National Audit Office recommends that the Ministry for Foreign Affairs

  • draw up and publish a plan for increasing and allocating Finland’s international climate finance during the government term

  • justify the choices, priorities and influencing objectives contained in the plan

  • also justify decisions on climate finance from the perspective of climate results, and

  • ensure that the results of the finance are monitored, and that statistics on it are collected and reported, as systematically and consistently as possible.

The Ministry for Foreign Affairs has formulated internal plans for the objectives of increasing the climate finance, but no monetary target level or other strategic objectives have been defined publicly. Planning and justifying these choices publicly would be important, for example because the Ministry for Foreign Affairs’ possibilities of monitoring the effectiveness of the instruments vary. Finland’s development policy objectives can be attained in different ways through the instruments.

The instructions for using the OECD Development Assistance Committee’s qualitative indicators have been interpreted inconsistently in the ministry, which is why the statistics and reporting are not fully reliable. The ministry should have access to information that is as systematic and consistent as possible on the results of climate actions carried out using all the different instruments and organisations. Other countries also face the same challenge of assessing and reporting on effectiveness.

Under the Paris Agreement, Finland and other industrialised countries have undertaken to finance developing countries’ efforts of both mitigating and adapting to climate change. Under a decision adopted by a Conference of the Parties that complements the Agreement, the developed countries’ joint annual financial obligation of USD 100 billion will be extended till 2025, by which time a new, higher climate finance target will be agreed.

Read the publication: Finland’s international climate finance – Steering and effectiveness