The UN Framework Convention on Climate Change (UNFCCC) 28th Conference of the Parties (COP28) set out a historic agreement to operationalize the loss and damage (L&D) fund to address and respond to the impacts of climate change for those countries that are particularly vulnerable. The COP28 decision further established a Board of the L&D Fund (the Board) to govern the L&D Fund. The Board has several decisions to make this year including agreeing on the arrangements of the L&D Fund for adoption at COP29.

However, some questions remain, such as how the L&D Fund will be financed (resource mobilization strategy), and by whom (donor base). According to the COP28 decision, the L&D Fund can receive contributions from a wide variety of sources, including the private sector. Parties need to decide how to begin to effectively engage the private sector to increase climate finance and close remaining gaps in funding.

It is also important to note that the new collective quantified goal (NCQG) on climate finance expected to be adopted at COP29 should take into account the needs and priorities of developing countries, which could include enhancing private sector finance for L&D.

This paper presents the issues and options facing Parties and the Board as they consider how to engage and interact with the private sector to increase financing for the L&D Fund. The paper proposes a voluntary framework for consideration that sets out how the private sector can contribute to the L&D Fund in return for “L&D certificates” with quality assurance for the project/ program supported. These certificates could be issued by the Board, reflecting the company’s financial contributions, which could then be used in the company’s reports or other communications by private sector actors to show how they have addressed L&D.