Bangladesh's private sector must step up as global climate fund remains inadequate: Experts

With the Global Fund for Responding to Loss and Damage (FRLD) still too small to meet the huge financial needs created by climate disasters, experts on Thursday urged Bangladesh to establish its own national loss and damage financing mechanism by mobilising private-sector resources and building a transparent governance framework.

The call came at a roundtable titled "Unlocking Private Sector Finance for Loss and Damage in Bangladesh," organised by Practical Action in Bangladesh, and Mercy Corps, under the Zurich Climate Resilience Alliance and The Business Standard at the TBS conference room in Dhaka.

The experts said Bangladesh can no longer depend solely on global funds, as international funding commitments remain far below actual needs despite rising climate-induced losses from floods, cyclones, salinity intrusion, heat stress and river erosion.

The FRLD, created under the United Nations Framework Convention on Climate Change (UNFCCC) to support countries facing climate-induced losses and damages, has so far received pledges of about $768 million from 27 contributors. But the fund currently holds only a little over $200 million as much of the pledged money has yet to be deposited, experts said.

Climate experts said that the amount is negligible compared to estimated global loss and damage financing needs, which now exceed $400 billion annually.

Speakers at the discussion stressed that Bangladesh needs a credible and coordinated national platform to channel climate-related loss and damage financing efficiently and transparently.

They said such a framework should bring together government agencies, financial institutions, corporations, NGOs and development partners to ensure quicker and more accountable support for communities affected by climate disasters.

The discussants also stressed the need to move beyond fragmented CSR activities and short-term humanitarian responses, arguing that private sector financing must become part of a long-term national climate resilience strategy.

Mahammad Navid Safiullah, additional secretary at the Ministry of Environment, Forest and Climate Change, attended the event as chief guest.

He said climate discussions in Bangladesh still focus largely on adaptation and mitigation, while loss and damage remain under emphasised despite its growing impact.

"Alongside financial losses, non-economic losses such as displacement, disruption to education, and cultural and psychological harm have deeper and longer-term consequences. These issues also deserve greater attention," he said.

Safiullah said the government alone cannot bridge Bangladesh's climate financing gap and stressed the need for coordinated partnerships involving the private sector, NGOs, development partners and financial institutions.

He said initiatives such as the Bangladesh Climate Development Partnership (BCDP), public-private partnerships, blended finance, green bonds and other innovative climate financing tools could play an important role in mobilising resources.

He also identified weak inter-ministerial coordination and fragmented financing systems as major challenges.

Referring to the Bangladesh Climate Change Trust Fund, Safiullah said the fund was once considered a model initiative but later faced political influence and misuse. "Although it was intended to function as an autonomous statutory body, that vision has not been fully realised," he said. "The fund now needs to be strengthened institutionally through collective efforts involving the government, private sector, experts and academia."

Mahbub Anan, Managing Director of Lal Teer Seed Ltd., said that in addressing climate-induced losses and damages, greater emphasis should be placed not only on post-disaster response but also on early preparedness, research, and preventive measures. He noted that floods and sudden flash floods cause crop damage in the haor region every year, but there is a lack of long-term data-based research and planning on the nature, timing, and recurrence of such disasters.

He said, "The damage in the haor this year did not happen in a single day. Such conditions have been developing over the past several years. If we could harvest paddy 10–12 days earlier, the losses could have been reduced to nearly zero. For this reason, emphasis should be placed on developing early-maturing rice varieties, early warning systems, and science-based agricultural planning."

He also said Lal Teer Seed is working on developing climate-resilient, salt-tolerant and disease-resistant seeds so that farmers in coastal and vulnerable areas can maintain production under changing climatic conditions. He added that in recent years, new climate risks such as abnormal cold, irregular rainfall and increasing salinity have emerged, and addressing these requires research and innovation as the only viable solution.

Mirza Shawkat Ali, Director (Climate Change & International Convention), Department of Environment, said Bangladesh must strengthen its own financing and capacity, assuming that limited support will come from international Loss and Damage funds. He said better governance and coordination of climate-related government budgets and development programmes could play an effective role in reducing losses and damages. A new evaluation system has been introduced to ensure transparency and accountability in the Bangladesh Climate Change Trust Fund.

Keynote presentations were delivered by Md. Shamsuddoha, Chief Executive of CPRD, and Tamanna Rahman, Thematic Lead-Climate Resilience, Practical Action in Bangladesh.

Md. Shamsuddoha said that although a large portion of international support currently focuses on adaptation and business expansion, long-term social impacts of loss and damage—such as displacement, school dropouts, inequality and human rights issues—are not receiving adequate attention. He also said that "invisible losses" or long-term social damages are often overlooked in media coverage and policymaking compared to visible disaster damages.

He said there is significant potential for financing through corporate social responsibility (CSR), crowdfunding and private initiatives in Bangladesh, but the biggest barrier is a lack of trust. "The government, NGOs and the private sector do not fully trust each other. Therefore, a transparent, accountable and multi-stakeholder financing mechanism is essential, with minimal political interference and ensured participation of the private sector, experts and development partners," he added.

Tamanna Rahman said Bangladesh still relies heavily on government and donor funding for addressing loss and damage, while private sector participation remains limited. The establishment of the FRLD marks the culmination of decades of UNFCCC negotiations, reflecting a shift to addressing unavoidable climate impacts through Loss and Damage finance. She added that, Practical Action has played a key role in this journey: its research on climate‑induced loss and damage informed the Government ahead of COP27, supported developing countries' push for a Loss and Damage Fund, and contributed to the Zurich alliance publications and a widely welcomed climate diplomacy report co‑developed with Bangladeshi CSOs.

During the discussion, Apurba Swatee Mahboob highlighted this year's haor experience, saying that a "local economy" emerges during disasters. She said, "Although government-subsidised harvesters were provided in haor areas, there was a lack of proper monitoring of how market prices and supply conditions actually functioned on the ground. In crisis situations, many farmers are forced to buy services and labour at higher prices to protect crops, further complicating the economic impacts of disasters."

Dr. Faruk-Ul-Islam, Country Representative, Bangladesh, WorldFish, said that accurate measurement of climate-induced loss and damage remains a major challenge, resulting in a gap between actual losses and policy and financial responses. He said climate-resilient technologies and innovations in agriculture and fisheries—such as resilient genetics and improved fish and crop varieties—will be key areas of future financing. Such financing is increasingly integrated into development projects, research and productivity enhancement rather than being treated as standalone climate funds.

Rabeya Begum, Executive Director, SDS, said a coordinated pooled fund involving government, NGOs and the private sector is needed, where a certain percentage of CSR funds can be included and used not only for emergency response but also for long-term rehabilitation and reconstruction. She added that rehabilitation efforts after disasters are still insufficient and planning is often hampered by a lack of data. Funds allocated for marginalised communities should be channelled through organisations working directly with those communities.

M. Samiun Nabi, Head of Strategic Planning and Business, IWM, said that if the government can prepare a clear budget and assessment framework identifying potential losses and financing needs for each area, the private sector will be more interested in investing. He added that although trust remains a challenge, greater transparency and accountability can significantly increase private sector participation.

Biswajit Mondol, Technical Advisor (Livelihoods and Market Systems), Concern Worldwide, said the agricultural sector is the most affected by climate-induced disasters, and private sector actors involved in seeds, fertilisers and feed also have direct business interests and responsibilities. He said instead of focusing only on post-disaster recovery, immediate recovery mechanisms should be strengthened through closer engagement between the private sector and farming communities. He stressed that climate-resilient farming systems are essential as loss and damage is an ongoing reality.

Nusrat Naushin, Project Manager, NACOM, said that in accessing the FRLD fund, lessons should be learned from global plans, particularly how they have created multiple channels to ensure fund disbursement at the local level.

Abu Alam Mohasin, Additional Director, Bangladesh Bank, said climate finance discussions in Bangladesh often focus more on mitigation and adaptation, while loss and damage remains relatively neglected. He acknowledged that there is still no clear and structured financial product for addressing loss and damage in the banking sector. He stressed the need for product design that clearly shows banks how to invest while ensuring direct benefits for affected communities.

Ishrat Shabnam, Country Director, Practical Action, Bangladesh, said Practical Action works on technology-based solutions for marginalised communities and has long experience in addressing climate risks. She added that climate change, nature and biodiversity loss, and urban resilience are deeply interconnected and all linked to the broader context of loss and damage.

The event was also attended by Md. Mostafa Kamal, Assistant Director (Evaluation-1), Md Yousuf Mehedi, Assistant Director (Admistration and Finance) from Bangladesh Climate Change Trust Fund; Palash Sarker, M. Tariqul Hasan Rifat, and Shadman Khalilil of Practical Action; and Md. Abdul Rayhan Bhuiyan, Assistant General Manager – Institutional Sales, Lal Teer Seed Ltd. Sajjadur Rahman, Deputy Editor of The Business Standard, moderated the discussion.