Since its establishment, GEF has been expected to act as a catalyst for innovation in environmental finance, testing new approaches that deliver global benefits.

Yet until now, no evaluation has systematically assessed how innovation has been fostered and sustained. This evaluation examines GEF’s record to date and draws lessons for the future.

Evaluation overview

• The evaluation finds that GEF’s risk appetite has often been limited, with many projects favoring proven approaches over novel but uncertain ones. Institutional incentives rarely reward experimentation, and mechanisms to track innovation outcomes remain weak.
• At the same time, projects that piloted new technologies, business models, or policies have generated lasting influence when backed by strong country ownership, stakeholder engagement, and adaptive management. Some projects recovered from early setbacks to achieve broader uptake.
• The report recommends setting a clear risk tolerance framework, expanding partnerships that can mobilize risk capital, and requiring systematic monitoring, midterm reviews, and knowledge sharing for all innovative projects.

Innovation may never have been more important in the GEF than it is today.

Methodology

The study draws on evidence from 1,706 closed projects, case analyses of integrated programs in GEF-6 and GEF-7, stakeholder surveys, and interviews across Agencies and countries.