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This scoping and feasibility exercise explores the institutionalisation of loss and damage finance under the Fund established by the United Nations Framework Convention on Climate Change. Despite progress  made so  far, there remains a considerable knowledge gap regarding the financing needs the Fund is intended to address. The demand for a comprehensive 'loss and damage finance gap report' has grown; however, various methodological challenges continue to impede accurate gap calculations. Key issues include difficulties in quantifying lost or damaged assets, estimating related costs, and the absence of a dedicated finance marker. Without a clear definition of what constitutes an effective response to loss and damage, identifying relevant needs and associated financial flows remains problematic.

The report discusses these methodological challenges and proposes actionable solutions, including:

• Insights derived from the Mitigation and Adaptation Gap Reports.
• Methodological discussions regarding financial needs assessment and potential data sources, alongside information on existing support.
• The incorporation of slow onset events, non-economic losses, and local knowledge into the assessment framework.
• Various approaches to calculating the loss and damage finance gap, highlighting the necessity of a finance marker.
• Identification of ongoing challenges and the exploration of next steps in this critical area of research.