The Paris Agreement

EBRD activities and Paris alignment

The Paris alignment of the EBRD’s financial flows is anchored in Article 2.1(c) of the Paris Agreement, which commits signatories to make "finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development".  Alignment of finance, therefore, relates to both the mitigation and adaptation goals of the Paris Agreement. In putting into practice its Paris alignment commitment, the EBRD is guided by the 1.5°C goal.

Methodology to determine the Paris Agreement alignment of EBRD investments

The EBRD has set out how it will determine whether or not an investment or technical cooperation activity project the Bank might finance is “aligned” or “not aligned” with the mitigation and adaptation goals of the Paris Agreement. This relates to the first and second building block of the MDBs’ framework for alignment with the objectives of the Paris Agreement.

The methodology has three parts:

(1) directly financed investments covering projects that involve specific capital expenditure

(2) indirectly financed investments with partner financial intermediaries (PFIs) covering EBRD finance extended to financial intermediaries that finance a set of sub-transactions to end beneficiaries (through sub-projects or sub-investments)

(3) financing types used by the EBRD not otherwise covered by (1) and (2).

For each element, the methodology sets out how the EBRD will determine whether activities the Bank might finance are “aligned” or “not aligned” with the mitigation and adaptation goals of the Paris Agreement. The scope of the methodology ensures that there is a clear approach to alignment determination for all project types, covering the full suite of financial instruments and financing types the Bank may use.

In developing its approach the Bank consulted widely through the course of 2021 and 2022, including through two public consultations – receiving feedback covering all aspects of the methodology.

Methodology to determine the Paris Agreement alignment of EBRD investments

Approach to the Paris Agreement alignment of the EBRD’s internal activities

This EBRD has established an approach for the Paris Agreement alignment of its internal activities. This relates to the sixth building block of the MDBs’ framework for alignment with the objectives of the Paris Agreement.

The scope of this approach covers own operations (related to buildings, mobility and procurement); Treasury activities, and the Bank’s retirement plans. It also set out the governance arrangements for the Bank’s implementation of its Paris Agreement alignment commitment, in line with the Bank’s broader governance structure.

Approach to the Paris Agreement alignment of the EBRD’s internal activities