In the absence of sufficient activity data at sector level to carry out a financial impact assessment, consolidated data from Climate Action Accelerator’s humanitarian partners has been used to provide a picture of the financial impact of implementing climate solutions in general. For this analysis, financial data from nine Climate Action Accelerator’s partners was used. These organisations, which vary in size and are involved in different activities, represented approximately 9% of the international humanitarian assistance budget (in terms of financial expenditure) in 2022.

Although not fully representative of the sector, this sample size is relevant enough to establish trends and benchmarks. The analysis below shares lessons from organisations who have used similar, comparable, and systematic approaches to set quantitative targets and estimate related costs, savings and investments. To our knowledge, this is the only available sample in the humanitarian sector today.

Even though they were originally established over different periods of time, the roadmaps were all extrapolated over a seven-year period to improve comparability. Three different extrapolation methods were used to model missing data from year 4 to 7 and improve the comparability of results. All three approaches calculate average savings, running costs and investments as a percentage of the organisations’ yearly budget.

No extrapolation was undertaken for the impact of environmental solutions and human resources costs, the respective available averages of 0.16% and 0.20% were therefore used for all three methods. The data in the following analysis is the average of the three methods, as detailed below.

The full methodology and sample are detailed in Appendix 5.

Table 2: Average savings, running costs, investments and net costs, Climate Action Accelerator’s consolidated partner data

All data presented below detail the estimates costs of climate roadmaps, i.e. exclusive of environmental solutions and staff costs.

• The average net financial impact of implementing a climate roadmap represents 0.09% of organisations’ yearly budget, reaching up
  to 1% for the most expensive. Total running costs and investments average 1.6% of the budget, while savings average 1.5%.
• Running costs represent 1.02% on average, varying from 0.25% to 2.1%. They are mainly driven by the greener purchasing solutions (transport, general purchases).
• Investments represent on an average 0.58% (ranging from 0% to 1.1%). Energy saving measures, solar energy and environmental solutions represent most of the investments.
• Total savings average 1.52% of the yearly budget, varying from -0.3% to -2.5%. They mainly come from transport solutions (plane travel and freight), as well as energy solutions.

The abatement curve captures the GHG impact of the main decarbonation levers, as well as the cumulated financial impact implementing them.

Figure 14: Financial impact abatement curve and contributions to internal GHG emissions reduction effort.

A list of “Top 8 solutions” identified by Climate Action Accelerator and representing over 91% of the total reduction effort was used as reference for this consolidated analysis.

• Financial impact: the abatement curve captures the average impact of each solution, as well as the cumulated financial impact of the solutions in the “Top 8”.
  • Solutions are ranked according to their average financial impact. The solution generating the most savings (fly less) is on the far left, and the costliest (procurement) on the right. They end with the “other solutions”, i.e. solutions outside of the Top 8.
  • The green curve shows the cumulated financial impact, with green dots showing the average impact for the top three and bottom three organisations for each solution, defined as the three with the highest savings or lowest costs (top 3) and the three with lowest savings or highest costs (bottom 3).
• GHG emissions: for each solution the graph shows the percentage of the total internal efforts to achieve a 50% reduction of GHG by 2030.
  • The blue curve shows the average cumulated GHG reduction for each solution.
  • Blue columns show the low and high averages of GHG reduction by solution. The high represents the average GHG reduction of each solution for the three organisations most impacted by this solution. The low average represents the average of the three smallest GHG reduction, as a percentage of the internal effort.

• The first three solutions, e.g. on travel, freight and fleet respectively generate on average 0.38%, 0.22% and 0.07% of savings, or cumulated savings of 0.68% of our sample’s yearly budget. They represent on average 33% of the organisations’ reduction effort.
• The next two solutions, e.g. energy solutions, present an average net cost of 0.06% (energy savings) and 0.13% (renewable energy) over 7 years. These solutions ultimately generate savings, sometimes as early as in year 5. Early investments will provide early savings and increased GHG emissions reduction. These combined solutions represent on average 22% of the internal GHG reduction effort.
• The last three solutions, combined under “procurement of goods”, are the costliest at 0.53% of the yearly budget, but also have the largest GHG reduction impact, averaging 36% of internal effort.
• The remaining solutions cost on average 0.04%, represent 9% of the internal reduction effort.

Figure 15: Yearly evolution of financial impact: average, and per organisation (Climate Action Accelerator partner) as a percentage of the yearly budget

The average yearly financial impact of the climate roadmaps is estimated at 0.09% of the yearly budget, excluding human resources costs. It averages -0.05% during the first 5 years, before increasing to 0.31% and 0.58% in years 6 and 7 (all excluding human resources). This is mainly driven by the procurement solutions¹³¹.

• Average savings grow from 0.69% to 2.19% between year 1 and year 7, as key energy savings and travel solutions deliver their full benefits.
• Investments decrease from 0.61% in year 1 to 0.52% in year 7. As energy savings equipment and renewable energies are installed, the need to invest decreases. Organisations with the financial resources and implementation capabilities can invest more earlier, unlocking GHG reduction and savings earlier in the roadmap.
• Finally, running costs grow from 0.26% to 2.25%, offsetting part of the savings.

Figure 16: Repartition of financial impact over 7 years as a percentage of budget

Each organisation has a different business model, different financial resources, emissions profiles, but also capacity to invest and priorities.

• Savings represent on average 1.5% over 7 years, ranging from 0.3% to 2.5%. The organisation with the highest savings is also the organisation with the lowest financial impact (-0.85%).
• Running costs represent on average 1% over 7 years, ranging from 0.3% to 2.1%. The organisation with the highest running costs has the costliest climate roadmap (0.82% of its budget) despite having the third largest savings (-2.4%).
• Investments represent on average 0.6% over 7 years, ranging from 0% to 1.1%. There is a strong correlation between investments and savings, as most investments are energy related and generate savings, and even net savings before year 7 for some.
• Overall net financial impact ranges from -0.85% to 0.82% (excluding human resources and environmental solutions costs), with four organisations generating net savings before human resources costs. The five remaining organisations have an average net financial impact of 0.48% before HR costs.