Adopting a portfolio approach to help Paraguay reach its climate goals: What have we learned so far?

By UNDP Paraguay and Hans Baumgarten

Photo by Raphael Lovaski on Unsplash

UNDP is undergoing a transformation that will have deep changes in its approach to development cooperation and work culture as it transitions from the traditional, project-focused approach to a systems-thinking, strategic innovation portfolio paradigm.

The idea behind this transformation is that it will make the organization more agile and proactive, quick to learn and innovate on the ground to be ready to adapt itself to the increasing complexity and uncertainty of today’s world, and deliver better results addressing complex or wicked development challenges.

With the guidance of UNDP’s Strategic Innovation Unit (SIU), Paraguay’s country office has gone through an intensive collaborative process in the last couple of months that has shaped our intent to transform our engagement in climate change action, guiding the direction and boundaries for our systemic interventions in this development challenge.

Our intent is to explore structural dynamics, power relationships and resource flows in the country that generate opportunities and risks to adapting to the changing climate. While we are at an early stage in this transformation the experience thus far has been quite enriching, and we are eager to share our lessons learned and insights.

Picking our wicked challenge

While Paraguay is not a large emitter of greenhouse gases (GHG) with a share of only 0.19% of global emissions, it is highly vulnerable to the effects of climate change, ranked at 93 in the Climate Vulnerability Index.

• The country is highly dependent on climatic conditions for income generation as agriculture and livestock still represent an important sector of the economy, and soybeans and beef are its key exports.
• Moreover, the country is dependent on water resources to power its hydroelectric generation (100% of electricity produced is hydro) and to ensure the navigability of its rivers as the main transport arteries for trade. Changes in rainfall patterns and prolonged droughts are already affecting the country as people increasingly suffer from more wildfires, heat waves, tropical storms and floods.
• As part of its nationally-determined contribution (NDCs) to the Paris Agreement, the government has pledged a 20% (10% unconditional) reduction in emissions. Its initial national commitment focused on adaptation measures but in its 2021 NDC actualization it has also included mitigation measures to reduce emissions.

Taking into consideration the severity and complexity of the challenge, its cross-cutting nature, its impact on the wider development agenda, and the country office’s capacity and experience working in thematic area, UNDP Paraguay is tackling this challenge with a system lens.

Transformative shifts for tackling climate change in Paraguay

We wanted to go deeper and beyond the statistics that show the implications of the changing climate in Paraguay. We invested in building a muscle for deep listening and horizon scanning with the intent to connect to the prevalent stories about important issues for citizens and various trends that are shaping the context in the country. Out of this we evolved 3 key pivots we want to make to accelerate the transitions towards Paraguay achieving its national climate change and NDC goals.

Three transformative shifts from UNDP Paraguay

1. We need new ways of “seeing” and measuring the changes triggered by climate change. This implies complimenting traditional methods (i.e. national statistics) with less traditional ones (e.g. real time, user-generated and satellite data, etc.)
2. We need to build new business models and financial instruments that unlock capital and channel it toward more urgent priorities. This implies rethinking the concept of “value” where we move from cost-benefit analysis to risk opportunity in an uncertain world.
3. We need to rethink institutional design for the age of uncertainty, one that disposes the public sector toward agility and anticipation (as Geoff Mulgan calls for).

Understanding how and where we wanted to focus our efforts to contribute to these transitions, we wanted to understand what do we already have within the existing stock of projects in terms of assets and relationships. We mapped those within the space of climate system in Paraguay — this revealed to us a heat map of where we were currently active and helped us reflect in which other areas and with which other actors in the problem space or system we would like to interact with to nurture new policy ideas and actions.

Problem space identifying where UNDP Paraguay is currently active (with thanks to the Chora Foundation for insights & capability building on a transformational change framework out of which the Problem Space comes from)

For example, UNDP Paraguay has years of experience working with the soybean and beef value chains to promote sustainable production models such as silvopasture. Although policies are moving towards creating mechanisms that will reward sustainable producers through payment for conservation measures and creating a carbon market, more financial incentives could be created to encourage sustainable production models that will be underscored by reliable data and public information systems to measure the climate impact of these measures.

In this regard, UNDP Paraguay will work with its partners to improve the national forestry information systems that will allow for reliable monitoring and data required for carbon capture projects for climate investment, and sustainable production businesses that yield differentiated prices for producers.

Lessons learned and insights from the process

The 3 month process of collectively understanding underlying dynamics, risks and opportunities related to the changing climate in Paraguay with our partners allowed us see our stock of projects through a different lens, building coherence between different interventions and highlighting new areas that we need to step into. There are a few insights that emerge from the process that have implications for our next steps:

Paraguay CO team documenting insights during the Sensemaking bootcamp.

• We have a good relationship with the public sector but we need to engage more with other stakeholders. For example, we need to more actively seek the participation of the private sector to unleash climate investment and include them in the design of innovative climate financing mechanisms and instruments. We also need to partner more with academia to conduct research and produce policy relevant knowledge products. Finally, we understand we need to deepen our engagement with civil society and citizenry at large; not only seek their participation in the implementation cycle of projects and interventions, but co-design them jointly and take into consideration their perspective on the issues.
• Improve our knowledge and information management. We are so used to working in silos and focus on project management that we miss opportunities to exchange knowledge amongst ourselves and find synergies for joint action across teams and units. Our corporate monitoring and reporting on KPI do not always capture the depth of knowledge generated and we are missing platforms and data repositories where we can record these. We need to start designing rituals, processes and tools that allow us to share learning among colleagues and drive a system thinking approach in our programmes. For instance, more important than recording the number of trainings we organise in a particular project, we should capture what that training taught us about the needs of the participants so that it can inform what else we can do. Furthermore, we recognize that the information and knowledge we need may be located within partner organizations or other stakeholders. Thus we need to change our working culture and seek to be more collaborative in information management, reaching out to our partners and organizing ourselves to connect to and tap into relevant knowledge regardless of where it’s generated or located.
• Rethinking what we mean by talent. We have to continue to nurture and sustain expert human capital in priority areas for the country office. The project financing model has come to the detriment of retaining key staff. Also, we need to work in multidisciplinary teams able to work across projects and interventions with the portfolio “big picture” in mind, in other words, having the country office’s intent of the transformation as the guiding star. Moreover, we have come to understand that we have a role to play in nurturing talent that will contribute to the strategic intent but that is outside our country office; we need to explore how to foster that environment for talent to thrive.
• Apply more intelligence to our resource mobilization efforts, leveraging resources from various partners to better contribute to government priorities. Support government efforts to align its finance to SDG, regardless of whether UNDP is a principal recipient of financial resources. In cases where it does, as UNDP Paraguay relies heavily on the government as its main donor and needs to diversify its partnerships. We have to be more strategic and methodic about our resource mobilization efforts, having a dedicated team applying institutional intelligence in scoping opportunities and preparing proposals is important. Likewise, having the institutional arrangements and financial instruments to bring together different partners to jointly fund the portfolio is critical (instead of having one donor per project). It’s about building the capacity to persuade and bring resources from different actors under the same strategic intent by continually generating a pipeline of attractive, investable interventions.
• Promote learning and constructive criticism. We need to change our work culture to create spaces where we can apply constructive criticism and discuss openly about challenges we face and how to improve our management and services. Important lessons are to be drawn from mistakes or outcomes that did not meet expected results, and yet it is something that is difficult for people to speak about in the country office for fear of criticism and blame. The purpose for the dialogue we seek to create is not to point fingers but to understand what hasn’t worked or what can be done better to improve our delivery and services.

So what’s next?

UNDP Paraguay has made the first step to adopt a portfolio way of working by setting a clear vision (intent to transform) and ambitious transitions it aims to contribute to so Paraguay can reach its national climate goals. Through sustainable finance UNDP will promote climate resilience with a multi-stakeholder approach and a systemic design; UNDP will contribute to improving public governance by supporting strengthening and innovation processes that transform institutions, printing efficiency and proactivity in their management; UNDP will facilitate the generation of climate data, digitization and better use of them.

Now it is the time to test out our narrative on the essential transitions Paraguay needs to make to achieve its national climate goals, pitching it to the government and to other development partners to coordinate climate action in the country. We hope our vision is shared with our stakeholders and that we gain traction and momentum moving forward to have an impact on our desired transitions.

Embedding a portfolio way of working will require an internal reorganization of our units, teams and procedures, likely creating new roles and assigning new responsibilities to our staff. We embrace this change as an opportunity to break down silos and promote internal synergies.

Finally, we also understand that uncertainty and the ever changing landscape are here to stay, and that we will have to periodically re-visit our intent and transitions, reflecting the validity of its assumptions and goals.

UNDP Paraguay is ready to embark on this journey towards climate change action and calls upon the government and development partners to join us.