Just as the pandemic’s effects have been most severe for those who were already the most vulnerable, so too are the effects of climate change. Low- and moderate-income countries (LMICs) are likely to experience more extreme weather, which in turn will increase the risk of income loss, food insecurity, adverse health effects, and displacement amongst low-income populations.
CFI recognizes that climate change is ultimately an issue requiring the reinvention of entrenched systems of production and consumption, and for many, this will require adaptation to more sustainable livelihoods. A s the world works to understand the impacts and adapt to new realities, financial services are an indispensable tool to help vulnerable low-income people prepare for climate-related shocks and recover from them when they happen. Our work in this theme will focus on understanding the role of financial services in mitigating the effects of climate change, both in the short run to respond to shocks and the long run as people adapt their lives and livelihoods to the changing climate. CFI will work to understand what financial tools people need and the constraints they face, uncover product innovations that can help, and then pilot test such innovations and share what we have learned.