The deal was reached Sunday at the summit in Egyptian Red Sea resort city of Sharm el-Sheikh.
Which member nations will pay for the fund and how it organized and allocated remains unclear.
The next step for the effort is for a committee of 24 members – including 10 from developed nations – to convene in March 2023 to make fund recommendations that will be considered during next year’s COP summit.
The summit in Egypt was reportedly more focused on addressing the impact of burning fossil fuels than the root cause of climate change.
“Three long decades and we have finally delivered climate justice,” said Seve Paeniu, the finance minister of Tuvalu. “We have finally responded to the call of hundreds of millions of people across the world to help them address loss and damage.”