When

Date: 04 December 2024

Time: 11:30 AM to 1:00 PM

Where: CR-9, United Nations Headquarters, New York

Participation: In-person attendance. Valid UN grounds pass or Special Events Ticket required.

Context

Small Island Developing States (SIDS) and other vulnerable nations face disproportionate challenges due to climate change and economic instability. Despite contributing minimally to global emissions, these countries bear significant climate impacts, which exacerbate their debt burdens and hinder critical investments in development, social services, and resilience-building efforts. More than 40% of SIDS are nearing or already in debt distress, and over 70% exceed the debt-to-GDP sustainability threshold of 40%.

Current financial systems, particularly credit rating methodologies, fail to account for the unique vulnerabilities of these nations. Traditional credit rating models overlook climate risks and resilience factors, leading to inflated borrowing costs and restricted access to funding. This systemic gap intensifies fiscal pressures on climate-vulnerable nations, diverting resources from essential development and resilience investments. Reforming credit rating systems to integrate climate resilience metrics is critical to enabling fairer financing opportunities and ensuring these nations can secure the investments they need.

The Global SIDS Debt Sustainability Support Service (DSSS) offers a comprehensive framework to address these challenges by focusing on debt sustainability, resilience investment, and advisory support. By leveraging innovative financing approaches—such as credit enhancement, securitisation, carbon markets, and other emerging mechanisms—the DSSS aims to transform the financial landscape for SIDS and other vulnerable nations. The principles of DSSS can also be expanded to support Least Developed Countries (LDCs) and other developing nations facing similar risks.

This side event will seek to build consensus on financial reforms and promote investment pathways that empower climate-vulnerable nations to achieve sustainable and resilient development.

Key Objectives of the Event

• Presenting and expanding the Global SIDS Debt Sustainability Support Service (DSSS): The primary objective of the event is to introduce the DSSS framework, a comprehensive approach designed to address debt sustainability and resilience challenges faced by SIDS. The discussion will explore how the principles of the DSSS can be adapted and expanded to support Least Developed Countries (LDCs) and other vulnerable nations, thereby addressing their unique economic and climate vulnerabilities.
• Highlighting the limitations of current financial systems, including credit rating methodologies: The event will outline how traditional financial systems and credit rating methodologies fail to account for climate resilience and the specific vulnerabilities of SIDS. By treating climate risks purely as liabilities, these systems overlook the proactive resilience efforts undertaken by these nations.
• Advocating for credit rating reform: The event will introduce and discuss a new credit rating mechanism that incorporates a multidimensional assessment of risk and opportunity. This approach will evaluate traditional financial metrics alongside human capital, natural capital, social networks, and physical infrastructure, creating a more accurate reflection of resilience and investment potential.
• Fostering multistakeholder collaboration: The event will convene representatives from governments, international financial institutions, credit rating agencies, and private sector investors to collaborate on actionable strategies. These discussions will aim to build alliances and advocate for international financial reforms that benefit climate-vulnerable nations.

Event format and agenda

• Welcome: Overview of the event's objectives and background.
• Opening Addresses (10 minutes): On behalf of Strategic Advisory Group (SAG) Co-chairs of SIDS Debt Sustainability Support Service.
• H.E. Walton Webson, Ambassador, Permanent Representative, Permanent Mission of Antigua and Barbuda to the United Nations
• H.E. Ali Naseer Mohamed, Ambassador and Permanent Representative of the Maldives to the United Nations
• Presentation of the proposed approach for DSSS and reforming the credit ratings for climate resilience (15 minutes): Ritu Bharadwaj, Director, Climate Resilience and Loss & Damage / ALL ACT, IIED
• Fireside Chatwith the expert (40 min): Moderated by Mr. Tumasie Blair, Deputy Permanent Representative of Antigua and Barbuda to the United Nations
• Interactive audience engagement (20 minutes): Open floor for audience Q&A and contributions.in a Town Hall style where participants can share their thoughts or questions about pathways for collaboration and advocacy.
• Closing remarks (5 minutes): Summary of key takeaways and next steps.