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Risk-informed approaches to humanitarian funding: using risk finance tools to strengthen resilience

Research reports

Written by Barnaby Willitts-King, Lena Weingärtner, Florence Pichon, Alexandra Spencer

Hero image description: The aftermath of Typhoon Haiyan in Tacloban City, Philippines Image credit:IHH Image license:CC BY-NC-ND

The international humanitarian system is exploring ways to respond differently to meet needs in the face of the funding gap. The Grand Bargain, for example, is making some progress in improving the efficiency and effectiveness of the response system. In parallel, there is an increase in the use of disaster risk financing instruments to address needs using a more timely, pre-planned, risk-informed approach. Having the right funding mechanisms in place to be able to respond appropriately in advance of, or as quickly as necessary after, a shock is critical. 

In its most ambitious form, a more risk-informed approach to humanitarian action – including disaster risk financing – is being developed by a number of key actors in the humanitarian system. Humanitarian actors are also contributing expertise to better dealing with the underlying causes of vulnerability and fragility through better development responses in coordinated humanitarian–development nexus approaches.

This study, commissioned by the Directorate-General for Civil Protection and Humanitarian Aid Operations (DG ECHO), explores the role that pre-arranged financing can play in reducing or mitigating disaster impacts by supporting anticipatory action and response. It also makes specific recommendations as to how DG ECHO could better integrate risk financing and risk-informed approaches into its programming and funding, in order to facilitate a timelier and more effective response to humanitarian crises. 

Barnaby Willitts-King, Lena Weingartner, Florence Pichon and Alexandra Spencer