IDFC launches its Operationalization Framework on Aligning with the Paris Agreement4 June 2021
On Friday 4th June, 2021, IDFC Chairperson and Agence Française de Développement (AFD) CEO, Rémy Rioux, participated in the Green Swan Conference. The Bank for International Settlements, Bank of France, International Monetary Fund and Network for Greening the Financial System co-organized this global virtual conference on the theme “How in practice can the financial sector take immediate action against climate change-related risks?
The main objective of this conference was to showcase initiatives and particularly innovative solutions to achieve the Paris Agreement objectives. Its outcomes would serve as a global public good for other events ahead of COP26, and beyond. Rémy Rioux, voicing the involvement and activities of the Club, actively participated in the session on “How can Development Banks address the massively increased financing needs for green projects? What kind of innovative solutions can be developed?”
The IDFC Chairperson explained the key role of IDFC within the public development banks (PDBs) community through its work on defining sustainable investments and even pledged, in 2017 together with the Multilateral Development Banks (MDBs) to “align financial flows with the Paris Agreement.”
To go further in the perspective of COP26, and provide to the community of PDBs a clear guidance on how to reach a better alignment of strategies and operations with the requirements of the Paris Agreement, Rémy Rioux, on behalf of the IDFC Club, announced the publication of a practical framework which presents a “menu of options”, with recommendations, tools and processes designed to align any financial institutions’ vision with the goals of the Paris Agreement. This report was elaborated by the two think-tanks : the Institute for Climate Economics (I4CE) and the New Climat Institute (NCI) that provided a precious work that can offer inspirations for others institutions willing to align their operations and financing with the Paris Agreement.
Beyond, the club members are also joining efforts to contribute to the achievements of the SDGs and the objectives of the Paris Agreement, a prerequisite is to reinforce the mandate of PDBs so that they fully integrate climate and sustainable development.
This was the objective of the first edition of the Finance in Common Summit, gathering for the first time all PDBs of the world as well as their stakeholders (governments, regulators, other public and private financial institutions, academia and think tanks), to push for concrete transformation.
During the FICS, all PDBs signed a joint declaration, where they affirmed their determination to collectively shift strategies and operating modalities to contribute to the objectives of the Paris Agreement, including by working towards applying more stringent investment criteria, such as explicit policies to exit from coal financing in the perspective of COP26.