Recommendation 1: The Board of Directors (BoD) should, in close collaboration with themanagement committee, finalize a coherent strategic implementation plan for GGGI tostipulate its main strengths and opportunities. This strategic direction will inform thecoming results-based management (RBM) process, support focus and prioritization withinannual objectives-based work plans (and annual budgets) and provide a profile of GGGI forexisting and potential partners and donors.Recommendation 2: GGGI management should work with GGGI staff to ensure a commonunderstanding of GGGI’s vision, strategy and work program, and their respective roles andresponsibilities in delivering these outcomes. A useful tool in this respect could be staffperformance and development plans, linked to GGGI’s work program and objectives. Themanagement should further support engagement of GGGI staff in the RBM process tomaximize the appropriateness and effectiveness of this process to the wide range of culturalcontexts at GGGI.Recommendation 3: If not already part of existing decision-making procedures, the BoDshould have responsibility for approval of the country selection methodology and finalapproval of each country selection based on advice from the Executive Director (ED).Program management, including approval of new country programs and new phases ofexisting country programs, should the responsibility of the GGGI ED.Recommendation 4: GGGI should consider seeking Official Development Assistance (ODA)eligibility from the Organization for Economic Cooperation and Development (OECD)Development Assistance Committee through donor nomination (note the OECD reviewsnominations once a year. Nominations are due at the end of February). The Review Teamrecommend that Australia and Denmark explore the possibility of submitting a nominationby the February 2012 deadline.Recommendation 5: GGGI should urgently develop a suite of internationally acceptedenvironmental and social safeguards and consider no further additions to the countryprogram pipeline until safeguards and the country selection methodology are incorporatedinto its operating process.Recommendation 6: GGGI should prioritize recruitment of a research program director andfinalization of its research plan for approval by the Board as this pillar is a key GGGI nichewith the strong potential to attract additional donors.Recommendation 7: GGGI should prepare a Governance Policy Manual in order to clarifythe roles and responsibilities of the various actors in GGGI, primarily the BoD, the chairmanand the ED. In light of this work GGGI should consider revising its Articles of Incorporation2

in such a way that only the overall objective and mandate of GGGI and its institutionalstructure appears in the Articles, together with any other requirements under Korean law.Recommendation 8: GGGI should create an independent internal auditor position,reporting to the newly established Internal Audit Committee, on GGGI’s adherence toagreed rules and procedures, and with authority to review and make recommendations tothe BoD on revisions to these rules and procedures to maintain their relevance to the GGGIover time.Recommendation 9: GGGI should also fast-track the establishment of its Donor ConsultativeGroup (DCG). The DCG would provide the primary conduit for joint interactions involvingall donors—as the April 2011Danidareview noted, individual donor interaction is extremelytime-consuming (and more significantly, has the potential to compromise GGGI’s deliveryof its strategy).Recommendation 10: GGGI should fast-track the preparation of a work plan and budget for2012 to be endorsed by the BoD before the end of 2011.Recommendation 11: GGGI should increase the proportion of permanent staff, particularlywith regard to core positions such as the ED, Deputy ED, Chief Financial Officer (CFO), andother key management positions, to build capacity and retain corporate knowledge. Whilerecognizing the valuable contribution of short-term secondees to date, this practice is notsustainable as the GGGI transitions to an international organization (IO). Recruitmentprocesses should be merit-based, open and competitive.

1. INTRODUCTION

Founded in June 2010 in South Korea, the Global Green Growth Institute (GGGI) is a non-profit organization dedicated to addressing the impacts of global climate change indeveloping countries through the provision of politically neutral, world-class technicalsupport and local capacity building for policy design and development of low-carbon greengrowth. The institute aims to grow into a leading global think-tank with the participation ofrenowned scientists, scholars and civil leaders and provide a fact-based, analytically soundfoundation for policy making and political decision-making on green growth in a carbon-constrained world.GGGI’s website states that its activities are centred on three main aims: 1) supportingdeveloping and emerging countries in the design and implementation of green growtheconomic development plans at the national or provincial level, 2) facilitating public-private cooperation to strengthen the enabling environment for resource-efficientinvestment, innovation and diffusion of best practice in the private sector and 3) pursuingresearch to advance the theory and practice of green growth, drawing particularly from theexperience of the governments and industries with which we work.GGGI has made significant progress in limited time to establish networks and exploreresearch and policy opportunities within the green growth area. GGGI is currentlyaccelerating its internal set-up and organization, with a view to become an internationalorganization (IO).In the Copenhagen Accord agreed at the UNFCCC COP15 meeting in CopenhagenDecember 2009 developed countries committed themselves to accelerate the financialsupport for climate change through Fast Start Financing approaching USD 30 billion in theperiod 2010-2012.The Danish Government is supporting GGGI through the Danish Climate Change envelopewith the purpose of assisting developing countries initiate activities to reduce carbondioxide emissions and assist the most poor and vulnerable countries to implement climatechange adaptation interventions.The Danish contribution to the Fast Start Financing amounts to DKK 1.2 billion. The budgetallocation for GGGI amounts to DKK 90 mill. from the 2011 Climate Change Fast Start4

envelope to be disbursed in the period 2011-2013. The support was appraised in February2011, approved by Danida in March, with a technical follow-up mission in April and areview of GGGI’s financial and administrative systems carried out by the Danish Embassyin Seoul in September 2011.When the Fast Start Climate funds for 2011 were presented to and approved by the Board ofDanida in March 2011 it was agreed that activities to be funded in 2011, including thesupport for GGGI, should be subject to an inception review in autumn 2011. Further to theagreement between the Government of Denmark and GGGI the inception review would beconducted to enable the disbursement of the remaining instalments for 2011 under theDanish support (DKK 10 million).In June 2010 the Australian Government committed to provide AUD 599 million in FastStart financing. In April 2011, the Prime Minister of Australia announced in Seoul thatAustralia would contribute AUD 10 million of these funds to support the work of the GGGIover two years. The Australian Government is presently assessing the nature of its supportfor GGGI. In this context it was agreed that a team of representatives from the Australiangovernment would participate in the mission as well.The inception review was undertaken 14th-18th November 2011 by a team consisting of Mr.Henning Nøhr, Danida (team leader), Mr. Svend Kaare Jensen (external consultant toDanida), Ms. Tamara Curll, Department of Climate Change and Energy Efficiency,Government of Australia, Mr. Hugo Temby, Australian Agency for InternationalDevelopment (AusAID) and Ms. Katherine Vaughn, AusAIDThe present debriefing note holds findings and recommendations by the Review Team (RT),not necessarily endorsed by the Danish nor the Australian Government.The RT would like to thank staff at GGGI for their generosity in making themselvesavailable, and candour in sharing their experiences. The RT would also like to thank theDanish and Australian Embassies in Seoul for support to the team which made possible thework of the mission.

level application of green growth and related climate change issues. GGGI has a clear nicheand will be able to contribute significantly to promote the green growth agenda globally ifthe GGGI succeeds in its present mission.Significant achievements by the GGGI to date include employment of permanent key staff,including the ED, continued implementation of its country programs, development of itsresearch agenda and partnerships and implementation of several of the recommendationsfrom the April 2011 Danida review, in particular the RBM process.This said, GGGI is faced with significant challenges in the process of building the Instituteand the capacity to provide the anticipated services. As GGGI is translated into an IO withmultiple partners and donors it urgently needs to further define and clearly set out thestrategic framework and the governance structure that will support this new position in aglobal context. This work can build on what GGGI has already achieved, and in this contextthe RT acknowledges the Republic of Korea’s (ROK) existing and valuable role in GGGI’sestablishment and ongoing support.A more explicit strategic framework and governance structure is fundamental for informingstrategic decisions and prioritization within the three main pillars of GGGI. The RT learnedthat there are already numerous lessons learned within these three pillars that can informthis process, e.g. on the approach of country level interventions and the linkages andsynergies between the three pillars. All this will contribute to sharpen the profile of GGGIand improve its readiness to act in an international arena, and make it more attractive tonew partners and sponsors.Building GGGI further into an IO is also a challenge with respect to bridging differentapproaches and thinking, and creating a common platform for many different partners anddonors. It is a management challenge. Establishing an institute with due respect to amulticultural setting is a task that takes time and calls for investment in creating a commonbasis of values and strategic directions within the GGGI, from the Board of Directors (BoD)to all levels of employees and among core sponsors. It is the opinion of the RT that thistransformation is possible, and it will need dialogue, patience, transparency andcommitment to the common goals and values of GGGI by all stakeholders.RT recommend that Australia and Denmark actively work with the ROK government, andthe other members of the GGGI community of donors, to advance this transformation anddevelopment of GGGI into an IO that can serve the significant need for action on greengrowth globally.

GGGI’s overall strategy

There still seems to be some uncertainty as to the overall strategic framework for GGGI,especially in relation to its implementation. There is an overall vision and mission to turnGGGI into a global, political neutral institution providing a laboratory for world-leadingresearch, technical support, and capacity development, including through innovative andtransformative country interventions that strengthen the intellectual foundations of thegreen growth paradigm , but the institutional understanding and uptake of this strategicvision and mission, in particular its reflection in actual implementation and prioritization ofGGGI activities, is less obvious. There is clearly a need to continue building a corporatevision and strategic framework for GGGI that guides prioritizations within the three mainpillars of GGGI and guides actual interventions. This process has to involve all levels of theorganization, from the BoD to project managers, and could be progressed by expanding theTerms of Reference of the external management consultant currently engaged to developcore operating procedures.To further consolidate its niche as a knowledge-based, global institute, the BoD of GGGI,together with Executive Director (ED) and based on the initial experiences gained by GGGI,needs to finalize a strategy for GGGI to guide its operations and inform decision-taking.This strategic platform will be essential for producing an annual work plan and also toinform the RBM process presently being rolled out.GGGI could develop an intermediate strategic implementation plan with a shorter timespan (e.g. up to the time when GGGI aims to be an IO, by the end of 2012). The strategyprocess should be inclusive within GGGI and among key partners and should becommunicated internally as well as to the global network to create a consistent and firmdefinition of the niche within aspects of green growth and climate change issues that GGGIwill cover.Recommendation 1: The Board of Directors (BoD) should, in close collaboration with themanagement committee, finalize a coherent strategic implementation plan for GGGI tostipulate its main strengths and opportunities. This strategic direction will inform thecoming results-based management (RBM) process, support focus and prioritization withinannual objectives-based work plans (and annual budgets) and provide a profile of GGGI forexisting and potential partners and donors.Recommendation 2: GGGI management should work with GGGI staff to ensure a commonunderstanding of GGGI’s vision, strategy and work program, and their respective roles andresponsibilities in delivering these outcomes. A useful tool in this respect could be staffperformance and development plans, linked to GGGI’s work program and objectives. Themanagement should further support engagement of GGGI staff in the RBM process tomaximize the appropriateness and effectiveness of this process to the wide range of culturalcontexts at GGGI.7

Country programming

The RT’s view is that country selection and program design should be grounded in GGGI’sstrategy. From discussions with the GGGI program team there appears to be a lack of clarityas to how the current suite of country programs form a coherent whole. The current work todevelop a methodology for country selection is essential to ensure a robust and transparentprocess consistent with the goal of developing green growth good practice/tools with broadapplicability to a wide range of national circumstances (for e.g. Small Island DevelopingStates (SIDS), Least Developing Countries (LDCs), emerging economies, resource rich/poorcountries etc.).The RT was pleased to hear of GGGI’s success in securing high-level political buy-in fromrecipient countries. It was also pleased to learn more about its largely country-drivenapproach to programming in line with partner government priorities. However, this shouldnot be the sole criteria for country selection and program design. To build the knowledgeand expertise GGGI needs to further the green growth agenda, it is essential that final GGGIdecisions on country selection and program design be consistent with GGGI strategy.In support of, and consistent with, a transparent methodology for country selection, bestpractice program design and robust results-based management, Australia and Denmarkstrongly advocate the provision of core funding to GGGI (as opposed to earmarkedfunding). Core funding is firmly in GGGI’s interests as it will allow it the flexibility toimplement most effectively its strategy.However, the GGGI’s current status as a non-ODA eligible institution limits its ability toallocate ODA to non-ODA eligible expenses (for example, research and core operatingexpenses) though still being able to disburse ODA funds through dedicated ODA activities,e.g. country LDC country programs.It is not clear that GGGI has a strategy for harmonizing its activities with those of otheractors in recipient countries. This is of particular concern because part of GGGI’s valueproposition is its potential to leverage existing green growth activities. However, the RT waspleased to hear GGGI has commenced a stakeholder mapping exercise. This exercise shouldbe undertaken for all prospective recipient countries (ideally before programmingcommences).The April 2011 Danida review recommended GGGI to develop a simple agreement forrecipient countries (and other partners). Implementing this recommendation - employingdocumentation of a contractual nature where appropriate - will be important to minimizerisks to the GGGI, in particularly in relation to the use of Intellectual Property and misuse offunds by partners, and to install procedures to manage other risks, e.g. from changes to thepolitical landscape. The documentation should also make clear recipient country reportingobligations to support M&E.8

Also as recommended by the April Danida review, it is essential that GGGI develops as amatter of priority a set of international good practices for social and environmentalsafeguards/screening/assessments. Staff will also need to be trained in their use. In theabsence of safeguards there are significant reputational (and potentially legal) risks to GGGIand its donors. GGGI should also ensure gender and disability considerations are built intocountry program design processes. GGGI should consult an appropriate range ofstakeholders, including Civil Society Organisations, as part of country program design.Recommendation 3: If not already part of existing decision-making procedures, the BoDshould have responsibility for approval of the country selection methodology and finalapproval of each country selection based on advice from the Executive Director (ED).Program management, including approval of new country programs and new phases ofexisting country programs, should the responsibility of the GGGI ED.Recommendation 4: GGGI should consider seeking Official Development Assistance (ODA)eligibility from the Organization for Economic Cooperation and Development (OECD)Development Assistance Committee through donor nomination (note the OECD reviewsnominations once a year. Nominations are due at the end of February). The Review Teamrecommend that Australia and Denmark explore the possibility of submitting a nominationby the February 2012 deadline.Recommendation 5: GGGI should urgently develop a suite of internationally acceptedenvironmental and social safeguards and consider no further additions to the countryprogram pipeline until safeguards and the country selection methodology are incorporatedinto its operating process.

Research

Research is one of three strategic pillars of GGGI and will be a key ingredient in achievingthe goal of developing the Institute into a global knowledge institution and think tank.Through 2011 the GGGI has continuously built its research program. In securing theimportant role of secretariat to the Green Growth Knowledge Platform, involving closecooperation with organizations like UNEP, WB and OECD/DAC, the GGGI has illustratedits ability to create global partnerships.Also collaboration with LSE and UNIDO on economic research programs on labour andemployment reflect the acceptance and acknowledgement of GGGI’s academic position andcredentials.There may be a need for GGGI to have a stronger focus on research within the countryprograms to ensure that, for example, the development of green growth plans do not just9

meet an immediate need for technical services on green growth issues at country level, butalso act as research pilots with feedback to development of good practices and paradigmson green growth. Potential research outcome should be an important parameter in themethodology for the selection and design of country programs.The GGGI’s current documentation does not do justice to the importance of its research role,which represents a clear niche in the green growth and climate change field; and has thepotential to be an important selling tool to prospective donors. The GGGI’s research planshould clearly articulate how the various research programs and projects are consistentwith, and supportive of, the GGGI overarching strategy, including how the outcomes fromcountry programs will feed back into the development of GGGI’s green growth bestpractices and paradigms information and knowledge.The RT suggests GGGI establish a formal peer review procedure for research activities. Theexisting Global Green Growth Knowledge Platform may be an appropriate mechanism inthis regard.Recommendation 6: GGGI should prioritize recruitment of a research program director andfinalization of its research plan for approval by the Board as this pillar is a key GGGI nichewith the strong potential to attract additional donors.

Redrafting of the Articles of IncorporationThe Articles of Incorporation outline the governance arrangements of GGGI, including adescription of the institutional structure of the Institute. The present organizationalstructure includes: the BoD, Facilitative Committee of the BoD, the Management Committee(MC), The Advisory Council, Auditors, and the Headquarters with Subsidiaries.The Articles of Incorporation both describe governance arrangements, the functions of eachof the organizational bodies, brief Rules of Procedure, and guidelines for financialarrangements. From an operational and governance point of view there is a need to separatedetailed operational issues from the description of the structural arrangements. This wouldallow GGGI more flexibility to revise it operational procedures to accommodate changes incircumstances and allow the Articles of Incorporation to be a relatively static document.The Board of Directors and Management ArrangementsAs described in the Articles of Incorporation, the BoD may consist of up to 20 Members,with some minimum requirements to representation. The size of the BoD may become ahindrance to the future directions for GGGI, and it appears that the BoD structure has beendesigned to meet stakeholder needs rather than management requirement. This issueshould be considered as part of the GGGI transition into an IO. The Articles do not provideclear governance guidelines to GGGI in respect to the role and responsibilities of the BoD.The Articles mentions a MC as part of management arrangements without specifying themandate of the Committee and the division of responsibilities between the MC Committeeand the BoD and the ED, other than stating that the ED chairs the MC. The RT suggests thatwhile a MC may constitute an appropriate mechanism in the day to day management ofGGGI, there may not be a need per se to constitute a MC with a separate mandate outsidenormal management procedures. It should also be clear that the ED is solely accountable,and ultimately liable, to the BoD.Since the BoD functions are not entirely clear to the RT, and the authority of the ED has tobe clarified there seems to be an urgent need to develop governance guidelines to guide theGGGI, in particular when it comes to drafting strategies and preparing work plans andbudgets. It is also important that Members of the BoD understands their role, and respectthe responsibilities of the ED. Likewise it is important that the ED is given the mandate inthe day to day management of GGGI to implement plans and budgets in accordance withthe agreed strategy.GGGI should also fast-track the establishment of its Donor Consultative Group (DCG). TheDCG would provide the primary conduit for joint interactions involving all donors—as theApril 2011 Danida review noted, individual donor interaction is extremely time-consuming.

Internal AuditIt is understood that GGGI has established an Internal Audit Committee, but it is not clearhow the internal audit function is structured in the organization, or its role. Obviously, theinternal audit function should oversee the financial and administrative procedures, but it isalso of the utmost importance that the function is mandated to oversee that the governancerules are applied by the ED as well as by the BoD. It should be the obligation of the internalaudit function to ensure that the Institute is well managed and that all managementprocedures fully support the overall strategy of the GGGI. This is particularly importantsince it appears that there will be strong delegation to the ED (considering the embeddeddifficulty for the BoD to provide clear directions considering its diversity and size).Recommendation 7: GGGI should prepare a Governance Policy Manual in order to clarifythe roles and responsibilities of the various actors in GGGI, primarily the BoD, the chairmanand the ED. In light of this work GGGI should consider revising its Articles of Incorporationin such a way that only the overall objective and mandate of GGGI and its institutionalstructure appears in the Articles, together with any other requirements under Korean law.Recommendation 8: GGGI should create an independent internal auditor position,reporting to the newly established Internal Audit Committee, on GGGI’s adherence toagreed rules and procedures, and with authority to review and make recommendations tothe BoD on revisions to these rules and procedures to maintain their relevance to the GGGIover time.Recommendation 9: GGGI should also fast-track the establishment of its Donor ConsultativeGroup (DCG). The DCG would provide the primary conduit for joint interactions involvingall donors—as the April 2011Danidareview noted, individual donor interaction is extremelytime-consuming (and more significantly, has the potential to compromise GGGI’s deliveryof its strategy).

M&E and ReportingRBM in itself may not provide GGGI with systems to measure the aggregated impacts ofGGGI efforts. In order for the GGGI to be guided in its work, clear targets for theinterventions should be developed. In order to measure their impacts, GGGI should beconsidering introducing the DCED (Donor Community for Enterprise Development)standards for M&E (building upon the LFA). This methodology is particularly suitable tomonitor impacts in areas where several stakeholders are involved. It is also an attempt todevelop a standard format for the donor community in general, thus avoiding separatedonor reporting requirements. Such reporting would also be a useful input to the BoD.Work Plan and BudgetGiven the nature of GGGI, it will be difficult to prepare precise activity based work plans.As such the work plans should be objective based and prepared on the basis of targets.However, since the GGGI does not yet have a clear strategy with agreed targets andobjectives that could guide the work planning process, establishing work plans and budgetsremains difficult. As mentioned above, the strategy process should be finalized urgently.Financial ManagementThe financial management of GGGI has been outsourced to a external service provider, andthe Institute has few in-house resources. This is not a sustainable situation for the GGGI andthe RT is pleased to learn that steps have been taken to in-source its financial management(and legal advice), and recruitment of relevant staff has been initiated. A Treasury Manualand Internal Controls have been prepared and procurement of accounting software isunderway. According to GGGI, the in-sourcing process can be finalized by April 2012.It will be important for GGGI that its financial management system can interact with itsM&E system, so the system can measure spending against progress at program level. Thisagain argues for in-sourcing of the financial management system.The RT understands that it has been decided to second a new CFO. Although secondmentshave been an important contributing factor in the GGGI’s successes to date, they may not bethe best solution in this specific case, and for core positions generally. For example, the CFOshould be able to manage the financials for more than one budgetary period to ensureaccountability and proper financial management in this position.Operations manualThe RT appreciates the GGGI ‘s efforts to formalize operational procedures in drafting anoperations manual. The operations manual will include guidelines and instruction for staffin relation to management of the GGGI as well as its programs. As mentioned above,financial management issues, including procurement procedures, will be described13

separately in the Treasury Manual and Internal Controls document. Human resourcemanagement, operational procedures, staff regulations and a code of conduct will bedeveloped separately. The operation manuals should include (but not be limited to): riskmanagement, fraud and corruption, knowledge management and M&E. Involving a rangeof GGGI staff in drafting the operations manual will be important to ensuring it is easily andcommonly understood in a variety of cultural settings.CommunicationSuccessful communication will be fundamental to GGGI’s success in building its in-houseexpertise, growing its funding, and influencing the global green growth paradigm. GGGImust give appropriate attention to effective communication with internal/externalstakeholders. Areas of focus should include:Research reports, including country program research seriesOngoing board/donor reporting, including statistics and storiesOther advocacy/outreach communication

Recommendation 10: GGGI should fast-track the preparation of a work plan and budget for2012 to be endorsed by the BoD before the end of 2011.Recommendation 11: GGGI should increase the proportion of permanent staff, particularlywith regard to core positions such as the ED, Deputy ED, Chief Financial Officer (CFO), andother key management positions, to build capacity and retain corporate knowledge. Whilerecognizing the valuable contribution of short-term secondees to date, this practice is notsustainable as the GGGI transitions to an international organization (IO). Recruitmentprocesses should be merit-based, open and competitive.

Other issues

Disbursement of Danish Support for GGGI 2011Out of the total Danish support to GGGI 2011, amounting to DKK 30 million, a firstinstalment of DKK 20 million was made in October 2011 based upon a review of GGGI’sfinancial and administrative procedures made by the Danish Embassy in Seoul. It was alsoconfirmed that the Treasury Manual and Internal Controls has been approved by GGGI’smanagement committee.The rest of the funding for 2011 should depend on the outcome of the present inceptionreview. Based upon the information given to the review team it is the assessment thatGGGI is in good progress and that disbursement and programming of the Danish supportis taken place. Based on these findings the RT concur that the rest of the funding for 201114

LIST OF RECOMMENDATIONS

1. INTRODUCTION

2. FINDINGS

Overall assessment

GGGI’s overall strategy

Country programming

Research

Public Private Partnerships

Governance

Operation and Administration

Other issues