On the eve of the second edition of the Finance in Common Summit (FICS) & on the way COP26: 

IDFC launched its Green & Climate Finance Mapping 2020 & Promote its operational framework to align with Paris Agreement

Agence Française de Développement (AFD) & the European Investement Bank (EIB), along with their IDFC partners , the CDC Group, the European Development Finance Institutions (EDFIs) and the Multilateral Development Banks (MDBs), met online on October 18th for the “On the way to FICS 2021 and COP26” Finance in Common event.

The FICS satellite event was organized to contribute to a successful COP26 in November and take stock of the work of the Public Development Banks (PDBs) on Paris Alignment. The first Summit, in November 2020, gathered for the first time all PDBs in the world and other key stakeholders (governments, central banks, private sector, civil society, think tanks, etc.). In a joint declaration, they committed to align their financial power, representing 10% of global investments, with the Paris Agreement. What progress has been made, one year later?

IDFC publishes Green and Climate Finance Mapping 2020 and promotes its operational framework to align with the Paris agreement

The IDFC published the “Green and Climate Finance Mapping 2020” key figures, i.e. the financing carried out in 2020 by IFDC members.

• More than US$1 trillion committed to green finance since 2015 – overcoming the initial commitment of reaching this threshold by 2025 – including US$185 billion in 2020
• Adaptation projects accounted for US$27.4 billion, up 42% from 2019 and x5 since 2016
• US$14 billion was committed on biodiversity in 2020. Biodiversity finance is mentioned for the first time in the Green and Climate Finance Mapping.         

IDFC published this year an operational framework developed by two independent think tanks, the New Climate Institute (NCI) and the Institute for Climate Economics (I4CE). This framework provides clear and practical guidance on how IDFC members – and the financial community at large – can reach a better alignment of their strategies, programs and operations with the requirements of the Paris Agreement.

Watch the replay of the Event 

Read the full FICS Event Brief

Update of the 2015 “Common Principles for Climate Mitigation Finance Tracking” to a new version fit for 2021

Since 2015, Multilateral Development Banks (MDBs) and IDFC members are using jointly developed Common Principles for Climate Mitigation Finance Tracking for guiding their common understanding on what can be counted as mitigation finance. These principles have been updated now and are published today.

The revision of the Common Principles involves an enhanced ambition for reducing greenhouse gas emissions, taking into account new mitigation activities required to meet the goals of the Paris Agreement and excluding activities that, while reducing greenhouse gas emissions in the short term, may maintain highly emissive technologies for several more years, thereby undermining the long-term temperature goal.

The updated principles set more  ambitious standards, requiring for instance transitional activities to “comply with high performance country- or sector-specific standards, benchmarks or thresholds for GHG emissions or emission-intensity that significantly exceed expected performance in a sector or activity”.

IDFC members in Latin America & Africa are fostering their alignment with the Paris Agreement Objectives 

The CAF (Corporación Andina de Fomento) wants to become the green bank of Latin America

 

« From CAF we put forward an agenda to become the green bank of Latin America, which is based on aligning economic sectors to draw guidelines that redirect their planning framework towards social responsibility and environmental sustainability. Under this approach, together with allies like the members of the IDFC, we seek to generate a competitive financial offer as well as technical solutions that will allow Latin America to become a prominent player in global climate action »

 

Sergio Díaz-Granados, Executive President of CAF – Development Bank of Latin America

The DBSA has developed new frameworks to align with the Paris Agreement

• The Development Bank of Southern Africa(DBSA)  developed its Climate Change Policy Framework to set specific targets for financial flows into mitigation and adaptation projects and programs with the view of enhancing alignment with the Paris Agreement.
• Recently, an Integrated Just Transition Investment Framework (which incorporated an Integrated Energy Sector Investment Strategy) was approved by the DBSA board. The Framework document aims to curb the rise in high carbon intensive investments, address transition risk, whilst simultaneously ensuring human rights, social equity and biodiversity needs were addressed. The criteria reinforce DBSA commitment to align with the Paris Agreement.
• For several years, DBSA has pursued a range of other policy frameworks to address sustainability issues. These initiatives are now being integrated into an Integrated Sustainable framework that would also define the Bank’s net zero pathway.

AFD publishes its first TCFD report

The Taskforce on Climate Financial related Disclosure (TCFD), created in 2016 by the G20, published recommendations in 2018 aiming to improve the financial transparency of companies and institutions in addressing climate-related risks and opportunities. Today, AFD is publishing its first TCFD report around the four areas of climate reporting defined by the working group: governance, strategy, risk management and the indicators and metrics used.

“As a “100% Paris Agreement” development agency, AFD gives a central place to climate-related opportunities and risks in its governance, in its dialogue with clients and partners, in the choice of operations financed, and in the various indicators used to monitor the Group’s activities. This report establishes and documents this, in order to allow regular exchanges on these subjects with all our clients and partners.”

Rémy Rioux, IDFC Chairperson & Chief Executive Officer of AFD Group