- Launch of EBRD Corporate Climate Governance Facility at COP27
- Bespoke green advisory service helps clients plan their green transition
- Building capacity to manage climate-related risk and opportunity unlocks green investment
As part of its efforts to help companies adapt successfully to a low-carbon future, the European Bank for Reconstruction and Developing is launching the EBRD Corporate Climate Governance Facility, which aims to transform the way its clients do business by building their capacity to manage climate-related risks and opportunities and unlocking green investment.
“Better climate governance, and a more informed understanding of the potential impact of physical and transitional climate risk, can improve EBRD clients’ access to finance and markets,” Harry Boyd-Carpenter, EBRD Managing Director, Climate Strategy and Delivery, said ahead of the launch event at COP27, the global climate summit in Sharm el-Sheikh, Egypt.
With €30 million of funding for its advisory services, the EBRD facility – a hub of sustainability expertise to help businesses plan their green transition, scaling up work the Bank has done on a smaller scale since 2018 – will build up to work with over 100 clients by 2024.
It will provide financial institutions, corporate and municipal clients as well as policymakers with access to bespoke advisory services to help them upgrade their businesses’ climate governance and plan a green transition to bring them in line with international best practice and the goal of the 2015 Paris Agreement to limit climate change to 1.5C by 2050. With EBRD support, clients examine their business model, define a range of activities related to climate governance, develop transition plans, and identify investments that the EBRD and others can finance.
Climate increasingly determines corporate access to finance and markets, with corporates facing a sea change in their access to finance and export markets.
By the end of 2022, the EBRD will become one of the first financial institutions to align all its lending and investments with the goals of the Paris Agreement, and has pledge to make more than half of its investments green by 2025.
Banks representing about 40 per cent of global banking assets have likewise committed to aligning their lending and investment portfolios with net-zero emissions by 2050 and to setting intermediate targets for 2030 or sooner.
As these banks reduce their exposure to climate-related risks, other companies will come under pressure to demonstrate to investors that they too understand and are planning for climate risk. At the same time, the spread of carbon pricing and taxes to more jurisdictions and EU plans to introduce a carbon border adjustment mechanism in 2026 mean corporates’ carbon intensity will directly affect their competitiveness and access to export markets. These disruptions in corporate access to finance and markets come in a decisive decade for climate-related investment.
One EBRD priority, said Boyd-Carpenter, is: “helping companies and cities transform themselves for this new era. As a development bank that focusses on the private sector, we are very close to our corporate clients. We want to leverage that to help those companies put in place corporate transition plans to help them get to a low-carbon future.”