Risk Appetite and the GEF

In GEF-8, the GEF is seeking transformational change in several global systems, including natural ecosystems, as well as food, energy, and urban systems. Systems change requires greater innovation to explore new ways of delivering global environmental benefits at scale to achieve more impact. Such innovation often entails greater uncertainty, with a higher likelihood of failure, than is associated with tried and tested approaches, which may be more reliable but insufficient to deliver change at the pace and scale required. The GEF’s commitment to transformational change will therefore entail greater innovation and risk. This paper reviews key concepts associated with risk and innovation and recommends that the GEF draft and deliberate a risk appetite statement and develop a corresponding risk appetite framework in consultation with the Council and the GEF partnership.