How Community-Driven Innovation Is Reshaping Climate Adaptation Finance and Practice

The UNDP Adaptation Fund Climate Innovation Accelerator (2020–2025) shows that locally led climate adaptation, backed by flexible funding, capacity-building and global partnerships—can deliver real, scalable impact for vulnerable communities. Across 33 countries, community-driven solutions improved livelihoods, restored ecosystems and proved that local innovation can be both resilient and financially sustainable.

The UNDP Adaptation Fund Climate Innovation Accelerator (AFCIA) Impact Report 2020–2025 tells the story of how climate adaptation works best when local communities are trusted to lead. Developed under UNDP’s Climate Promise and supported by the Adaptation Fund and the European Union, the programme drew on research and knowledge partnerships with institutions such as the Global Resilience Partnership, the Climate and Development Knowledge Network (CDKN), the International Centre for Climate Change and Development (ICCCAD), and leading universities including Yale, Oxford, the University of Cape Town, the Asian Institute of Management and Fundação Getulio Vargas. Together, these partners helped shape an initiative designed to combine local innovation with global learning and evidence-building.

Bridging the “Missing Middle” in Adaptation Finance

AFCIA was established to address a longstanding issue in climate finance. Many community-based organizations develop effective responses to climate risks but struggle to access funding because their ideas are too large for microgrants and too risky for large investors. AFCIA responded by offering flexible grants of US$60,000 to US$250,000 directly to local organizations, accompanied by technical assistance and capacity-building support. Instead of imposing fixed project designs, the programme allowed communities to test, adapt, and improve solutions based on local knowledge, culture and environmental conditions.

A Global Portfolio of Practical Solutions

Between 2020 and 2025, AFCIA supported 44 initiatives across 33 developing countries in Africa, Asia and the Pacific, Latin America and the Caribbean, the Arab States, and Europe and Central Asia. These initiatives addressed real and immediate climate threats such as droughts, floods, sea-level rise, heatwaves and biodiversity loss. Solutions ranged from floating farms in flood-prone regions, to climate-resilient housing using traditional building techniques in the Sahel, to community-led seed banks, water-harvesting systems and digital tools for farmers and fishers. Innovation was treated not as a high-tech novelty but as practical problem-solving rooted in local realities.

Measurable Impact on People, Land and Livelihoods

The report shows that locally led adaptation delivers strong results. AFCIA-supported initiatives directly or indirectly reached more than 2.6 million people and improved livelihoods for over 21,000 households. More than 29,000 hectares of land and ecosystems were restored or protected, and over 1,300 green jobs were created. Importantly, AFCIA also strengthened financial sustainability. At the start of the programme, only one in five partner organizations generated any revenue. By 2025, nearly 60 percent were earning their own income, and almost one-third were generating more than US$100,000 annually. This shift shows that community-led adaptation can move beyond short-term grants toward long-term viability.

Building Skills, Equity and Future Scale

Beyond funding, AFCIA invested heavily in skills and systems. All initiatives received training in financial management, leadership, safeguards and communication. A unique “MBA school” initiative connected grassroots organizations with business students from top universities to help refine business models and scaling strategies. Gender equality was central throughout the programme, with women making up 54 percent of beneficiaries and many initiatives led by or designed for women. Indigenous knowledge was also treated as a core asset, with traditional practices revived and adapted to strengthen resilience while preserving cultural identity.

Looking Ahead: From Pilots to Systemic Change

The report is clear that challenges remain. While AFCIA helped unlock more than US$4 million in additional funding for local initiatives, access to private investment is still limited for many. To address this, UNDP-AFCIA is developing new approaches involving blended finance, patient capital and stronger links between local actors and financial institutions. With the expansion of AFCIA at COP28 to include UNIDO and the World Food Programme, and the design of a second phase of UNDP-AFCIA, the programme aims to scale what works without losing its focus on local ownership. Overall, the report makes a simple but powerful case: climate adaptation is most effective when communities are not just beneficiaries, but leaders of change.