Climate Action in Financial Institutions

General

Name of initiative Climate Action in Financial Institutions
LPAA initiative No
NAZCA Initiative Yes
Website address https://www.mainstreamingclimate.org/
Related initiatives
Starting year 2015
End year
Secretariat The Institute for Climate Economics (I4CE) perfoms the role of the Secretariat of the Climate Action in Financial Institutions Initiative since December 2016.

I4CE, 20-22 rue des petits hotels 75010 Paris – France

Organisational structure The current governance structure of the initiative comprises two bodies:

1) The Supporting Institutions Assembly consists of all financial institutions whose management has publically confirmed its support for the Climate Action in Financial Institutions Initiative and acknowledged the guidance provided by the voluntary Principles for Mainstreaming Climate Action within Financial Institutions. Supporting Institutions have also confirmed their interest in participating (on a voluntary basis) in the ongoing knowledge sharing and development of emerging operational approaches and practices linked to the voluntary Principles. The Assembly takes responsibility for high-level decisions, while day-to-day decisions are delegated to the Coordination Group.

2) The Coordination Group is a permanent body (with rotating membership of Supporting Financial Institutions) and which is supported by a secretariat. In 2018, representatives of 7 supporting institutions were nominated to undertake this role in its first term, each of them represents a constituency of Supporting institutions.

• EBRD and IADB representing Multilateral development banks • AFD and BOAD representing International/bilateral/regional/national development banks • HSBC representing Developed country commercial financial institutions • YES BANK and BMCE Bank of Africa representing Developing country commercial financial institutions 3 ) The Secretariat is an independent entity that supports the Coordination Group for the implementation of its various tasks. Among its responsibilities, the Secretariat provides in depth inputs to the different work streams and the construction of the annual work plan and assists the Coordination Group in the organisation of meetings and the internal and external outreach of the initiative.

Since late 2016, the Coordination Group has selected the Institute for Climate Economics (I4CE) to house the Secretariat.

Geographical coverage Global
Name of lead organisation I4CE
Type of lead organisation Academic/Research institution
Location/Nationality of lead organisation France

Description

Description The Climate Action in Financial Institutions Initiative is an unprecedented coalition of 44 public and private financial institutions around the globe aiming to adopt a pathway to systematically integrate climate change considerations across their strategies, programs and operations. The Initiative is guided by 5 voluntary Principles for Mainstreaming Climate Action within Financial Institutions:

1. COMMIT to climate strategies; 2. MANAGE climate risks; 3. PROMOTE climate smart objectives; 4. IMPROVE climate performance; 5. ACCOUNT for your climate action.

Objectives The Climate Action in Financial institutions Initiative intends through its 5 voluntary Principles to make climate change considerations a core component of how financial institutions conduct business, parallel to and in addition to the necessary development of appropriate regulatory and enabling environments at the domestic and international levels. They imply a shift from incremental financing of climate activities to ensuring that climate change – risk and opportunity – is a fundamental consideration through which financial institutions deploy capital.

Th initiative aims to provide public and private financial institutions an opportunity to learn from each other, to disseminate good practice and lessons learned and to collaborate on areas of common interest.

Activities The work of the initiative includes three activities:

1. Knowledge Sharing within the Financial Community: The Initiative will be a platform for sharing knowledge on “how” financial institutions integrate climate considerations across operations. Knowledge sharing activities will happen along each of the 5 voluntary Principles.

2.Dissemination of Emerging Practices and Lessons Learned: Recognizing that financial institutions may vary in “how” they integrate climate considerations, and recognizing that approaches and emerging practices may be replicable in other institutions, the voluntary Principles will collect and disseminate examples of emerging practices, inclusive of the lessons learned through the implementation of those approaches.

3.Collaboration among Supporting Institutions on Areas of Common Interest: Recognizing that there may be many more examples of “emerging practice” under some voluntary Principles than others, Supporting Institutions expressed a desire to collaborate on the development of new/innovative approaches where few currently exist. Collaboration on new approaches, as well as the possibilities to harmonize existing climate mainstream approaches/tools will form part of the work of the Initiative.

One or two success stories achieved At the 2018 Global Climate Action Summit, the 42 financial institutions participating in the Climate Action in Financial Institutions Initiative released a Joint Statement demonstrating how they are moving from commitment to action – both individually and collectively – in supporting local climate action: https://www.mainstreamingclimate.org/publication/joint-statement-of-the-supporting-institutions-of-the-climate-action-in-financial-institutions-initiative/

Aligned with the objectives of the ‘Talanoa Dialogue’, the Statement takes stock of over 40 new and existing commitments, programs and efforts of financial institutions supporting local climate action.

As to date there is no common definition of what Paris Alignment means and implies in practice, the Climate Action in Financial Institutions hosted an expert workshop on the sidelines of the 2019 UN Climate Action Summit to help fill this gap. The event was organized in partnership with the IDFC and the group of MDBS with support from the European Climate Foundation. It aimed to take stock of progress made and identify areas to move forward on Alignment with the Paris Agreement. Part of a series of workshops, which started at COP24 in Katowice, it brought together more than 80 experts on the topic of alignment from the financial institutions and research community.

Monitoring and Impacts

Sustainable Development Impact:
E SDG goals icons-individual-rgb-13.png   E SDG goals icons-individual-rgb-17.png  
Function of initiative Technical dialogue, Political dialogue
Activity of initiative Knowledge dissemination and exchange, Awareness raising and outreach
Indicators
Awareness raising and outreach — Events attended and or organised
Year2019
Value (#)4
Knowledge dissemination and exchange — Workshops and meetings for exchanging the knowledge
Year2019
Value (#)4
Goals The Climate Action in Financial Institutions Initiative builds on the pivotal role financial institutions play in scaling up and directing financing toward investments and assets that are necessary for transitioning to low-carbon, resilient economies globally, and achieve ‘net zero’ carbon emissions in the long term. In line with the internationally agreed commitments to urgently address the threat of climate change, through 5 voluntary Principles the Initiative supports the global objectives of:

- holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursue efforts to limit temperature increase to 1.5 °C, - increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience, and - making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

Supporting institutions have identified 4 Work Streams as being relevant to the initiative and its activities: - Climate risks: approaches, tools and methodologies - Mapping reporting initiatives and understanding implementation challenges - City-level climate smart approaches and financial instruments - Spreading a climate strategy into a whole organization

Overarching goals for 2019-2020: 1. Assist operational teams in Supporting Institutions to access, understand, discuss and apply evidence and examples of how to “mainstream” climate change: a) Identifying and documenting current practice of financial institutions to mainstream climate change; b) Presenting overviews and disseminating existing relevant and useful work; 2. Promote dialogue and ‘matchmaking’ between Supporting Institutions a) Support increased ambition and improved mainstreaming through peer-based exchanges and experience b) Support the development of new practice on emerging mainstreaming topics 3. Contribute to scale up and redirect financing toward investments and assets that are necessary for transitioning to low-carbon, resilient economies globally, and achieve ‘net zero’ carbon emissions in the long term. a) Demonstrate to the wider financial community how addressing climate change can be successfully done in practice while simultaneously achieving core institutional objectives. b) Contribute to international discussions on the frontiers of mainstreaming, such as the emerging topic of Paris Alignment and the rapidly developing topics of climate risk, adaptation, among others.

Comments on indicators and goals
How will goals be achieved The goals will be achieved through a series of targeted activities.
Have you changed or strenghtened your goals Goals are reviewed and updated by the Annual Assembly of the Initiative on an ad hoc basis depending on their current needs.
Progress towards the goals Since 2018, the Initiative organises an Annual Assembly, technical workshops, webinars and produces materials such as case studies to disseminate lessons learned on emerging practice among its Supporting Institutions and with the broader financial community.
How are you tracking progress of your initiative Progress are tracked by the Secretariat of the Initiative on a monthly basis for presentation to the Coordination Group.

Progress are tracked by the Secretariat of the Initiative on a yearly basis for presentation to the Annual Assembly.

Available reporting The initiative releases annual reports publicly available on its website: mainstreamingclimate.org

Further information on its activities are available on its website as well.

Participants

Participants Number Names
Members 44  
Companies 0
Business organisations 0
Research and educational organisations 0
Non-governmental organisations 0
National states 0
Governmental actors 0
Regional / state / county actors 0
City / municipal actors 0
Intergovernmental organisations 0
Financial Institutions 44 African Development Bank - AfDB (Ivory Coast),  Agence Française de Développement - AFD (France),  Asian Development Bank - ADB (Philippines),  Banco de Desarrollo de América Latina - CAF (Venezuela),  Banco de Desenvolvimento de Minas Gerais - BDMG (Brazil),  Banco de Inversión y Comercio Exterior S.A. - BICE (Argentina),  Banco Nacional de Comercio Exterior or "Bancomext" (Mexico),  Banco Nacional de Desenvolvimento Econômico e Social - BNDES (Brazil),  Banque Ouest Africaine de Développement - BOAD (Togo),  Belgian Investment Company for Developing Countries - Bio Invest (Belgium),  BMCE Bank of Africa (Mali),  BNP Paribas (France),  Caisse de Dépôt et Consignations (Tunisia),  Caisse de Dépôt et de Gestion (Morocco),  Caisse des Dépôts et Consignations - CDC (France),  Carribean Development Bank - CDB (Barbados),  Cassa depositi e prestiti - CDP (Italy),  Central American Bank for Economic Integration - CABEI (Guatamala),  Council of Europe Development Bank - CEB (France),  Crédit Agricole (France),  Development Bank of Southern Africa - DBSA (South Africa),  European Bank for Reconstruction and Development - EBRD (United Kingdom),  European Investment Bank - EIB (Germany),  HSBC Holdings (United Kingdom),  Industrial Development Bank of India - IDBI (India),  Industrial Development Corporation - IDC (Zambia),  Inter-American Development Bank Group - IDB (USA),  International Finance Corporation - IFC (USA),  International Fund for Agricultural Development - IFAD (Italy),  Islamic Development Bank Group - IsDB (Saudi Arabia),  Japan International Cooperation Agency - JICA (Japan),  KfW (Germany),  Malaysia Credit Guarantee Corporation - CGC (Malaysia),  Multilateral Investment Guarantee Agency - MIGA (USA),  Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. - FMO (Netherlands),  New Development Bank - NDB (China),  Nordic Development Fund - NDF (Finland),  Promotion et Participation pour la Coopération Économique - PROPARCO (France),  Santander (Spain),  Société Générale (France),  STOA Infra & Energy (France),  Türkiye Sınai Kalkınma Bankası A.S. - TSKB (Turkey),  World Bank - WB (USA),  Yes Bank (India).
Other members 0
Supporting partners 0
Number of members in the years
Have only national states as participators No


Theme

Transport Agriculture Forestry Business Financial institutions Buildings Industry Waste Cities and subnational governments Short Term Pollutants International maritime transport Energy Supply Fluorinated gases Energy efficiency Renewable energy Supply chain emission reductions Adaptation Other Resilience Innovation Energy Access and Efficiency Private Finance
No No No No Yes No No No No No No No No No No No No No No No No Yes
Last update: 8 January 2020 09:07:05

Not only have national states as participators