Multilateral Development Banks fail to deliver on joint Paris Alignment promise at COP25
Madrid, Spain — Yesterday at COP25 the nine multilateral development banks (MDBs) provided a public update on their joint commitment to Paris Alignment. Though the group of banks first committed to a process to align their financial flows with a 1.5°C pathway in 2017, yesterday's announcement provided few new details. The group of public banks — which includes the World Bank, the Asian Development Bank, and the Inter-American Development Bank among others — indicated full implementation of their framework will not occur until 2023-2024 and did not include anticipated criteria for determining whether projects are Paris-aligned.
In response, members of the Big Shift Global Coalition provided the following statements:
“Yesterday's announcement reinforced the message that MDBs are not on track to deliver on Paris Alignment,” said Bronwen Tucker, Analyst at Oil Change International, “The presentation was window-dressing that reiterated elements of this process that have already been announced and gave examples of standards they will ‘consider’ adhering to.”
“As public banks with a mandate for sustainable development, these institutions should be leading the charge and providing clear signals to private finance institutions that we can no longer afford to fund oil, gas, and coal projects. The MDBs must also be playing a leadership role in supporting countries to make progress on decarbonisation, adaptation, and resilience.”
“This year has seen individual examples of leadership among MDBs — including the European Investment Bank (EIB) commitment to phase out lending to fossil fuel projects — that have built on past commitments to phase out lending for some categories of high carbon projects,” said Dr. Alejandro Gonzalez Fernandez, Climate Change Advisor at Christian Aid, “But MDBs have continued to finance billions in fossil fuel projects every year at the expense of distributed renewable energy for communities who need it most.”
“Civil society is calling on the MDBs to redouble their efforts and to meet and exceed the EIB’s lead in committing to phase out finance for all fossil fuels. In particular, we call on MDBs to jointly commit to end support for oil, gas, and coal by the end of 2020, rapidly scale up investments in renewables and energy access, and undertake transparent reporting on finance levels and portfolio emissions.”
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- The Big Shift Global Coalition is made up of forty civil society organizations calling for an end to public financing of fossil fuels and a shift to investing in sustainable, renewable energy to provide energy access for all. The coalition laid out expectations for the Joint MDB Paris Alignment process in a letter to MDB presidents with six expectations from the Big Shift Global Coalition here.
- The nine MDBs are the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank, the New Development Bank, and the World Bank Group (World Bank, IFC, MIGA).
- The MDBs first committed to Paris Alignment alongside the International Development Finance Club at the One Planet Summit in 2017. The following year, at COP24, the MDBs reiterated this pledge and announced six building blocks for Paris Alignment. Finally, earlier this year, at the UN Climate Action Summit in New York, they promised to present a detailed approach, joint tools, and a report on their progress at COP25. They also promised to present ‘a new transparency framework to report on both the impact of each MDB’s activities and how these are helping clients meet and exceed commitments they have made,’ and to share ‘principles that can help our public and private sector clients design and implement long-term low GHG emissions and climate-resilient strategies that grow in ambition over time.’
- Copies of the key slides used in the MDB presentation are available upon request.