Social impact

Helping The UN Empower Refugees In Tackling Climate Change

The UNHCR’s REP Fund is using innovative carbon financing to empower and protect refugees — and launch a green revolution

With the climate crisis and political instability forcing more people from their homes, it’s more urgent than ever to find sustainable, empowering solutions to help vulnerable refugee populations. 

When Oliver Wyman helped launch the UN Refugee Environmental Protection Fund (the REP Fund) with the UN Refugee Agency (UNHCR) as a corporate founding partner at the 2022 World Economic Forum Annual Meeting in Davos, Switzerland, CEO Nick Studer hailed it as a “win-win-win-win” opportunity. By investing in reforestation and clean cooking methods across developing countries, the fund helps to support at-risk refugee populations, reduce gender-based violence, and improve the environment — while using innovative financing that doesn’t further deplete already stretched development budgets. 

We have, for some time been, supporting the refugee population where we can. Our Climate and Sustainability Practice is also committed to the development of carbon markets. The use of novel funding modalities to support the UNHCR offered a way for us to use our understanding of financial services to increase the possible impact and maximize use of precious funds
Peter Reynolds, Partner, Oliver Wyman


What is the REP Fund?

The REP Fund aims to plant tens of millions of trees and provide clean-cooking solutions for refugee and host communities. Refugee settlements provide temporary respite and safety — but they are not geared toward sustainable, long-term, energy-friendly solutions for daily life. UNHCR estimates that 20 million to 25 million trees are cut down around refugee settlements every year for cooking fuel, leading to deforestation, soil erosion, landslides, and desertification. That, in turn, exacerbates social tensions. With fewer trees around, women and children have to walk further looking for firewood, making them more vulnerable to attack. Environmental degradation also increases the likelihood of conflict between refugees and locals as they compete for resources.

The REP Fund initiative was created to address the critical environmental challenges faced by displaced communities and their host. Humanitarian funding is scarce, short-term, and unpredictable. This makes it poorly suited to long-term reforestation and clean-cooking projects
Siddhartha Sinha, Innovative Finance Officer, UNHCR

The REP Fund looks to address this challenge by linking these projects to the global carbon markets, transforming how they are funded. The projects would access longer-term, larger-scale, and more predictable carbon financing, helping significantly strengthen and scale up their impact. The expected benefits from each project would include not just reductions in carbon emissions and local environmental benefits, but also reductions in gender-based violence, improvements in health from reduction in smoke inhalation, and opportunities to earn livelihoods in green jobs such as reforestation projects and the clean-cooking energy and stove supply chains. Displaced people and their hosts would also become part of the global movement to combat climate change.


Where will the REP Fund be active?

The vision for the REP Fund is to support environmental protection and reforestation in displacement contexts around the world, Sinha says. Locations will be selected based on the scale of need, the potential impact, the technical and commercial feasibility of the projects, and the alignment with national and local government priorities. The fund has selected pilot sites in East Africa to conduct the first set of carbon project feasibility studies during 2023, Sinha says. The first projects are expected to take place in Uganda and Rwanda.

The REP Fund would aim to create a sustainable source of funding that can support environmental protection and restoration in displaced communities around the world, wherever this is most urgently needed
Siddhartha Sinha, Innovative Finance Officer, UNHCR

How are governments involved?

Given the scale of the problem and the innovative solution proposed by the REP Fund, both national and local governments have received the proposals very favorably, Sinha says. “The projects would be supportive of the Ugandan and Rwandan governments’ environmental and sustainable energy priorities and policies. These projects would also be supporting a number of social priorities related to refugee communities and their hosts, and doing so via a source of funding — carbon financing — that has never been accessible to displacement contexts before on this scale.”

What are the next steps to success?

Oliver Wyman supported the REP Fund team from the outset with a dedicated team working closely with UNHCR. We started with a feasibility study, followed by economic modelling, fund design and partnership approach, and further detailed feasibility studies on the ground in each country. “The pilots and initial plans have all been successful, and we received support from the UN High Commissioner and national governments,” Reynolds says. “But we need more public-private support to scale this and make it self-funding — which we believe it could be.”

In the next phase, the fund will use a blend of grant funding and carbon financing to initiate its first set of projects, and will engage with carbon project developers and other stakeholders to implement the proposed projects. Funding remains crucial. 

“We are currently fundraising for the grant component of the funding package from both public and private donors,” says Sinha. “We are also looking for committed organizations who are interested in partnering with UNHCR to contribute to the environmental and social goals of the REP Fund initiative. As the projects proceed, we look forward to continuing the collaboration with local communities, governments, development actors, and the private sector, all of whom have critical roles to play.”

We have loved the joint-team approach with the UNHCR clients. Everyone is committed to improving the lives of the most unfortunate — that in itself is inspiring
Peter Reynolds, Partner, Oliver Wyman

At a glance

20-25 MM
the number of trees cut down around refugee settlements each year for cooking fuel
110 MM
the number of forcibly displaced people worldwide, according to UNHCR
35.3 MM
the number of refugees worldwide, according to UNHCR
the percentage of refugees who are children