Global challenges occurring at all latitudes are adding pressure on land and water systems and efforts towards the achievement of the 2030 Agenda for Sustainable Development are seriously at risk. The growing unpredictability of climate and the rising water scarcity and land degradation, associated to the increasing frequency and intensity of natural extremes like drought, demand adequate decisions to actualize policy commitments and produce on-the-ground evidence.

Shifting paradigm in drought management, from reactive to proactive approaches, is urgently needed to move away from emergency actions and strengthen adaptation capacity. Investing in drought risk preparedness and response is crucial to promote transformational frameworks that enhance the resilience of human and natural ecosystems and mitigate the vulnerability of the most exposed.

The current report is a contribution of the Food and Agriculture Organization of the United Nations (FAO) to build effective financing systems and contribute to unlock impactful investments for drought risk preparedness and response, ensuring integration with planning for Land Degradation Neutrality (LDN) as well as with other Sustainable Development and Rio Conventions’ objectives.

Produced within the framework of an Enabling Activity project funded by the Global Environment Facility (GEF) for implementation of the UNCCD Conference of the Parties (COP) Drought Decisions, the report reflects on previous commentaries concerning the observed or anticipated effectiveness of investments in preparedness, adaptation and transformation of drought risks. Following the identification of financing and implementation at different levels, the present work also considers the necessary learning processes to ensure that anticipated effectiveness and measurable effects are achieved. Finally, it draws out and reviews understanding of the effectiveness of current economic
instruments, financing mechanisms and partnerships implementing them.

Taking stock of global knowledge on effective investment decisions to address drought risks, the report outlines the need for innovative and flexible mechanisms, based on the experiences of many climate financing solutions already in place. It is thus a timely and valuable contribution to the debate on the effectiveness and monitoring of financing to transform drought risks and foster the adoption of holistic and integrated drought management approaches.