- MDBs outline the principles of how they will ensure alignment of their new operations with the mitigation and adaptation goals of the Paris Agreement
- Culmination of joint work over the last few years
- The EBRD has fully aligned its activities since 1 January 2023 with the mitigation and adaptation goals of the Paris Agreement and helps countries, clients plan their green transition
Multilateral development banks (MDBs), including the European Bank for Reconstruction and Development (EBRD), released today the principles of how they will ensure the alignment of their investment with the goals of the Paris Agreement – the culmination of work over the last five years to ensure a consistent and harmonised approach.
The principles represent the outcome of work among the MDBs since the Paris Agreement was signed. In 2017, MDBs committed to aligning their financial flows with the objectives of the Paris Agreement.
These technical papers are the result of significant collective effort and provide clear guidance on how the MDBs’ new financing operations must be structured in order to align with the Paris Agreement’s climate goals.
The MDBs’ joint approach to Paris alignment aims to accelerate and support the successful and urgent transition to a low-carbon and climate-resilient future by supporting clients in developing appropriate short- and longer-term development pathways.
“These principles are central to our own Paris alignment commitment, which aims to support the clients and countries with whom we work in delivering a green economy transition. They are a rigorous discipline but also an enabling framework to allow us to engage with and support the most difficult and important transition areas. We are delighted to have worked with our partners to prepare these joint principles and we hope that they will also be of use to the wider climate community in defining their own approach to this vital issue,” said Harry Boyd-Carpenter, EBRD Managing Director, Climate Strategy and Delivery.
To ensure a consistent approach to the implementation of the Paris alignment commitment, in 2019 the MDBs developed a framework for aligning their activities with the Paris goals, with six building blocks: alignment with mitigation goals; adaptation and climate-resilient operations; accelerated contribution to the transition through climate finance; engagement and policy-development support; reporting; and alignment of internal activities.
The joint framework has informed the EBRD’s own detailed implementation of its Paris alignment commitment. The EBRD has fully aligned its activities since 1 January 2023 with the mitigation and adaptation goals of the Paris Agreement. This overarching commitment complements the Bank’s ambition to ensure that at least half its annual investment volumes are green by 2025, a goal it achieved in both 2021 and 2022.
The EBRD’s Paris alignment approach, published here, sets out its detailed application of the joint MDB principles.
The transformative approach includes targeting the EBRD’s 300-plus partner banks to accelerate the sustainable transition of the Bank’s countries of operations. The EBRD’s recent “Pathways to Paris” conference showcased how the Bank plans to move from a “use of proceeds” model – in which a partner bank that borrows EBRD money must use those funds for a stated purpose – to a broader “transition plan” approach that supports the EBRD’s partner in transforming its business to ensure their entire portfolio aligns with green transition. This approach impacts lending well beyond the EBRD’s own financial support for that partner bank.
The MDBs working together on the release of the joint methodological principles are the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank Group, Islamic Development Bank, New Development Bank, and the World Bank Group.