Climate-related extreme events and slow-onset processes are causing severe losses and damages to human, economic, and environmental resources across the world, especially in climate-vulnerable developing countries. Despite this, access to timely, adequate, predictable, and sustained loss and damage (L&D) finance remains limited. In many contexts, responses to climate-related disasters continue to rely on ad hoc post-event allocations, emergency budget reallocations, and external assistance. These approaches remain insufficient to address the scale, frequency, intensity, and cumulative nature of climate impacts.
L&D has emerged as a distinct policy and financing issue within the global climate agenda, as certain climate impacts cannot be (or are not being) prevented or addressed through mitigation or adaptation efforts alone. This includes, inter alia, irreversible loss of life or health, destruction of livelihoods, permanent ecosystem damage, loss of cultural and heritage assets, shrinking territory, and climate-induced displacement.
This brief outlines emerging approaches to accessing L&D finance and examines their application based on a case study from Sri Lanka in the wake of cyclone Ditwah, which made landfall on the island in late November 2025. The event was supported by the German Federal Ministry for Economic Cooperation and Development (BMZ) under the project “Multi-Actor Partnership for Pro-Poor & Gender-Equitable Climate Risk Financing in the Context of the IGP’s 2025 Vision.”
