The implementation plan for Finland's public international climate finance, drawn up by the Ministry for Foreign Affairs in 2022, is no longer in effect, and it was not implemented to any significant extent. Many of the recommendations presented in the external evaluation of climate finance commissioned by the Ministry in 2023 remained without an implementation decision.
The National Audit Office of Finland (NAOF) has conducted a follow-up of the audit “Finland’s international climate finance – Steering and effectiveness” (6/2021). The follow-up report examines what measures have been taken on the basis of the recommendations and conclusions presented in the audit report.
International climate finance is part of Finland’s official development assistance administrated by the Ministry for Foreign Affairs of Finland. The audit examined the prerequisites provided by the Ministry’s activities for the effectiveness of climate finance. The audit found that the Ministry for Foreign Affairs did not have a public plan for the amount, allocation and effectiveness of the increasing climate finance. The steering of climate finance had been decentralised to several units of the Ministry without overall coordination. The Ministry’s human resources for the steering of climate finance were meagre, which was a risk to the quality of the steering. Climate finance statistics and reporting were susceptible to errors. The information on the effectiveness of climate finance was partly inconsistent and inadequate, which made it difficult to obtain an overview of it. The Ministry had used the information on the results of climate finance relatively little in its decision-making, evaluations, reporting and communications. The audit presented a number of recommendations to the Ministry for Foreign Affairs for improving the steering and effectiveness of climate finance.
The most significant actions taken in accordance with the recommendations were the preparation of an implementation plan for Finland’s public international climate finance (2022) and the commissioning of an external evaluation of climate finance (2023). After the change of government, the plan was no longer in effect, and it had not been implemented to any significant extent. Based on the recommendations of the external evaluation, the Ministry for Foreign Affairs decided to draw up a “steering paper” on climate finance. The steering impact of the paper remains to be seen. Other recommendations in the evaluation did not lead to any significant decisions to improve the effectiveness of climate finance.
Based on the follow-up, the NAOF considers that the Ministry for Foreign Affairs has partially implemented the recommendation made in the audit report to develop the operational planning and decision-making related to climate finance by updating the guidelines on climate finance and by organising personnel training related to them. However, the follow-up did not obtain any information on the effectiveness of these actions.
The Ministry for Foreign Affairs has also implemented the recommendations made in the audit report for developing climate finance statistics and reporting by updating its statistical guidelines, by strengthening the role of the climate and environmental adviser in the quality assurance of the statistics and by increasing the reporting on climate finance in the development policy results reporting.
In addition, the Ministry for Foreign Affairs has implemented the recommendations made in the audit report by strengthening the resources of the Unit for Development Finance and Private Sector Cooperation (KEO-50). However, the overall coordination of climate finance has not been improved in line with the recommendation.
The quantitative objectives set for climate finance in the implementation plan as well as pertinent operational and financial plans of the Ministry were largely achieved until around 2022, but no longer thereafter. The equal allocation of climate finance to climate change mitigation and adaptation has still not been realised, and the target has been abandoned in Finland. Nor was the objective of a 75 per cent share of climate finance in the funding, set in the Development Policy Investment Plan 2020–2023, achieved.
In future, the National Audit Office will monitor climate finance as part of its normal monitoring and audit topic planning. There is no need to continue the follow-up in any other form.
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