Climate action initiative launches database to drive investment

14th November 2017 Jack Aldane

The Climate Action in Financial Institutions initiative has made public a database of case studies for climate finance projects with the aim of making investments more transparent and encouraging other institutions to integrate climate action in their portfolios.

The Climate Mainstreaming Practices Database, launched at COP23 in Bonn Germany, seeks to encourage more institutions to align their deployment of capital with sustainable environmental and economic policies using its signature five-principle framework. These voluntary principles oblige each member to ‘Commit’, ‘Manage’, ‘Promote’, ‘Improve’ and ‘Account’ for their climate action as part of each investment. The database contains examples of such projects, showing how they delivered on the principles and what lessons were learned in the process.

Key representatives from the European Investment Bank (EIB), the Development Bank of Latin America (CAF) and the initiative’s secretariat, the  Institute for Climate Economics I4CE spoke at the launch.

Felix Bergel, director of institutional funding of CAF, said in a keynote speech: “The approaches tools and methodologies developed by some supporting institutions are really innovative solutions: and this is all the purpose of the mainstreaming initiative to share those efforts between the different supporting institutions, but also with all the public and private organisations involved in low-carbon and resilient development.”

Jonathan Taylor, EIB’s vice president for climate action, told Development Finance that the database is accessible via the Mainstreaming Climate Action in Financial Institutions Initiative website and remains publicly available to all institutions. He added that the data is also available to “interested members of the public”, and that more case studies would continue to be added over time.

“[The case studies] relate directly to the principles we are addressing such as how to assess climate risk in projects. This might be, for example, in a new project to build a water supply system where there could be risks to infrastructure from extreme weather like a cyclone in Fiji . There could be indirect risks to the power supply needed to run it. If an institution has done that work to assess those types of risks in its projects and is prepared to share that information with others, we can all save valuable time and effort on building climate-resilient infrastructure and communities,” he said.

As the COP meeting comes to an end this week, HSBC, a major leading institution in the initiative, has announced five new commitments to tackle climate change and support sustainable growth.

These commitments include an investment of US$100 billion in sustainable projects by 2025. The bank will also source 100 percent of its electricity from renewable sources by 2030, with a interim target of 90 percent by 2025. HSBC has also committed to reducing its exposure to thermal coal, which will be achieved by discontinuing thermal coal mines in developing countries as well as in developed markets.

Formed on the fringes of the COP21 Paris Agreement in December 2015, the mainstreaming initiative has grown to encompass 30 financial institutions. They include Agence française de développement (AFD), Belgium’s development agency BIO, the development bank for Latin American CAF, Cassie des Depots, DBSA, the Japanese International Cooperation Agency (JICA), KfW, the Dutch development bank FMO, NDF, Proparco and TSKB.

Supporting commercial lenders include BNP Paribas, Credit Agricole, HSBC, Societe Generale, as well as Bank of Africa, IDBI bank, Credit Guarantee Corporation and YES BANK.

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