Approaches to assess the additionality of climate investments

The report introduces a framework for measuring 'additionality' in climate finance, focusing on whether public investments catalyze activity that would not have occurred under a business-as-usual scenario. It details a qualitative multi-criteria assessment (MCA) for individual projects and a quantitative 'additionality modifier' based on the IESE VCPE Index for portfolio-level analysis. The findings suggest that private equity is a viable instrument for additionality as it often targets high-risk markets where commercial investment is otherwise lacking.

• The proposed methodological framework defines an investment as additional if it represents a "deviation from a BAU scenario," where BAU refers to a business-as-usual counterfactual.
• The qualitative approach uses a multi-criteria assessment (MCA) consisting of eight criteria split into two categories: context-specific criteria (policy, institutional, market environment, and value chains/human capital) and venture-specific criteria (crowding-in private investment, access to finance, demonstration effect, and improved ESG standards).
• Under the qualitative framework, investments are considered more likely to be additional when they overcome significant barriers, such as a "weak or non-existent" policy environment or a lack of domestic sectoral value chains.
• The quantitative portfolio-level approach utilizes the IESE Business School Venture Capital & Private Equity (VCPE) Country Attractiveness Index to create an 'additionality modifier.'
• The quantitative model establishes specific thresholds for additionality: investments in countries with a VCPE score below 45 are assumed to be "100% additional," while those with a score above 75 are considered "0% additional" because the expected Internal Rate of Return (IRR) exceeds the 21% median for global private equity funds.
• The report notes that the qualitative and quantitative methods can diverge, particularly in large, diverse countries like China, where additionality depends heavily on specific locations and sectors rather than just national-level indices.

APA

Escalante, D., Abramskiehn, D., Hallmeyer, K., & Brown, J. (2018). Approaches to assess the additionality of climate investments. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Approaches-to-assess-the-additionality-of-climate-investments-_-Findings-from-the-evaluation-of-the-Climate-Public-Private-Partnership-Programme-CP3-2.pdf

Chicago

Escalante, Donovan, Dario Abramskiehn, Karoline Hallmeyer, and Jessica Brown. Approaches to assess the additionality of climate investments. Climate Policy Initiative, 2018. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Approaches-to-assess-the-additionality-of-climate-investments-_-Findings-from-the-evaluation-of-the-Climate-Public-Private-Partnership-Programme-CP3-2.pdf.

Wikipedia

{{cite report |last1=Escalante |first1=Donovan |last2=Abramskiehn |first2=Dario |last3=Hallmeyer |first3=Karoline |last4=Brown |first4=Jessica |title=Approaches to assess the additionality of climate investments |publisher=Climate Policy Initiative |date=March 2018 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Approaches-to-assess-the-additionality-of-climate-investments-_-Findings-from-the-evaluation-of-the-Climate-Public-Private-Partnership-Programme-CP3-2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{escalante2018approaches, author = {Escalante, Donovan and Abramskiehn, Dario and Hallmeyer, Karoline and Brown, Jessica}, title = {{Approaches to assess the additionality of climate investments}}, institution = {Climate Policy Initiative}, year = {2018}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/Approaches-to-assess-the-additionality-of-climate-investments-_-Findings-from-the-evaluation-of-the-Climate-Public-Private-Partnership-Programme-CP3-2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }