Recommendation 11

Least Developed Countries (LDCs), Small Island Developing States (SIDS) and Low-Income Countries (LICs) are among the hardest hit by the impacts of climate change and are the least responsible for causing it. These countries’ high exposure to climate change impacts partly stems from a combination of characteristics, for example their limited financial capacity, and a ICF architecture predicated on policy and economic stability. Current ICF mechanisms are therefore often ill-suited and inaccessible to these already debt-distressed countries. Without clear spending targets or better geographic prioritisation, the government risks sidelining low-income and other highly climate-vulnerable countries, and leaves the UK’s ICF susceptible to being diverted for domestic and other political priorities. A stark demonstration of this is the government’s £400 million reprioritisation of the UK’s ICF budget to loans in July 2026. This reprioritisation will likely reduce grant-based funding for the most vulnerable and make the UK’s ICF less effective and impactful as a direct 54 result, at least in the absence of further measures to support the financial capacity-building of these countries and their resulting ability to access climate finance. (Conclusion, Paragraph 45)