3 December 2018: Multilateral Development Banks (MDBs) announced a joint framework for aligning their activities with the Paris Agreement on climate change. The MDBs issued a declaration at the start of the 24th session of the Conference of the Parties (COP 24) to the UNFCCC.

The nine MDBs are the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IDB), the Islamic Development Bank (IsDB), the New Development Bank (NDB) and the World Bank.

This commitment builds on a December 2017 commitment by the MDBs and the International Development Finance Club (IDFC), in which the MDBs and IDFC pledged to align financial flows with the objectives of the Paris Agreement, including to support the ‘Five Voluntary Principles for Mainstreaming Climate Action with Financial Institutions.’ The MDBs commitment goes beyond specific MDBs’ 2020 and 2030 climate finance targets, and builds on their ongoing contribution to climate finance, which amounted to US$35 billion in developing and emerging economies in 2017.

There is an urgent need to ensure that financial flows are consistent with a pathway towards low emission and climate-resilient development.

In the declaration, the MDBs stress international consensus “on the urgent need to ensure that policy engagements and financial flows are consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient development.” To realize this vision, the MDBs are developing a dedicated approach that will focus on six building blocks identified as the core areas for alignment with the objectives of the Paris Agreement. These areas are: 1) alignment with mitigation goals to ensure MDB operations are consistent with countries’ low-emission development pathways and the Paris Agreements’ mitigation objectives; 2) adaptation and climate-resilient operations, such as actively managing physical climate change risks in a manner consistent with climate-resilient development and increasing clients’ and their communities’ ability to adapt to adverse climate impacts; 3) acceleration of the transition through climate finance, by further scaling up climate finance and operationalizing new approaches to bridge the climate finance gap and accelerate support to countries in achieving their nationally determined contributions (NDCs); 4) engagement and policy development support for countries and other clients to accelerate the transition to low-emission and climate-resilient development pathways; 5) an emphasis on climate reporting, including further development of tools and methods for characterizing, monitoring and reporting on results of activities, with an emphasis on harmonizing approaches where possible; and 6) alignment of internal activities, to ensure that internal MDB operations are in line with the Paris Agreement objectives.

A joint MDB working group is developing methods and tools to operationalize this joint effort for each of the building blocks. The MDBs further committed to report to COP 25 on progress on their joint Paris Agreement alignment approach and individual MDB progress towards this alignment. [Joint Declaration] [World Bank Press Release] [IADB Press Release] [IISD RS Coverage of Katowice Climate Change Conference]