Green finance opportunities, transition planning and corporate climate governance discussed at the “Pathways to Paris” conference
Climate change is the number one challenge of our time. In response to this challenge, the European Bank for Reconstruction and Development (EBRD) has aligned all its activities with the goals of the Paris Agreement. On top of this, the Bank is not only assisting its clients with finance, but is also offering broader support centred on transforming business models over time, as part of so-called “transition plans”.
The EBRD recognises the pivotal role that financial institutions play in the transition to a low carbon economy and climate-resilient development. By working with them to develop strategies for climate change mitigation and adaptation – for example providing technical assistance, capacity building and financing solutions – the EBRD helps partner financial institutions align their operations with the objectives of the Paris Agreement.
As part of this support, the EBRD organised an event dedicated to financial institutions and financial regulators. The “Pathways to Paris” conference, held in Vienna with support from the Global Environment Facility (GEF), focused on increasing awareness and capacity related to Paris alignment, transition planning and corporate climate governance for financial institutions. The conference brought together around 300 representatives of financial institutions, central banks and standard setters from the EBRD regions to discuss how to integrate these considerations into their strategies and operations.
“It’s complicated, it takes effort, it takes money, yet it’s eminently doable,” explained Francis Malige, EBRD Managing Director for Financial Institutions. “Our partner financial institutions possess a great power as critical agents of change. Jointly, we have a unique opportunity to drive it by directing capital towards sustainable investments and spreading the adoption of climate-friendly business practices.”
EBRD representatives explained how the Bank was moving over time from a “use of proceeds” model – where environmental, social, and climate-related strategies and requirements, are focused on the specific funds provided by the EBRD – to a broader “transition plan” approach. This approach helps the financial institution to formulate a comprehensive climate and decarbonisation strategy at the institutional level. To be undertaken alongside EBRD financing, these plans set time-bound milestones for the partner institutions to ensure they are credibly aligning their financial flows with the goals of the Paris Agreement.
The EBRD has already signed pioneering banks up for transition planning support, focused on greening their entire operations, while assessing and disclosing the climate risk on their books. By 2027, the aim is to have the overwhelming majority of partner banks using the new approach.
“The green transition is a huge challenge, but it is also a huge opportunity. And we, at the EBRD, are working hard with our partners and clients to maximise the opportunity and meet the challenge,” said Harry Boyd-Carpenter, EBRD Managing Director for Climate Strategy and Delivery.
At the event the EBRD also announced the launch of a series of training sessions on climate risk, targeted at financial institutions, under its already successful Green Finance Academy, with support from Austria and the GEF. This in-depth series covers topics such as governance, strategy, climate risk, metrics and targets, and disclosure.
The participants of the conference explored a wide range of topics, including corporate climate governance, green capital markets and equity, green trade finance, green buildings, e-mobility and much more.
By leveraging its expertise and resources, the EBRD is playing a crucial role in accelerating the global shift towards a more sustainable future.
The Paris Agreement was signed in 2015 with the goal of “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”.
The EBRD is fully dedicated to supporting the economies in which it invests to meet their goals and commitments under the Paris Agreement. All of the EBRD’s activities have been aligned with the Paris Agreement since the beginning of 2023.