Thirty institutions join climate action initiative

26th June 2017 Jack Aldane

An initiative launched online today to push financial institutions to invest in climate action has gained the support of 30 worldwide institutions.

Mainstreaming Climate Action within Financial Institutions, an initiative formed on the sidelines of the COP21 agreement in December 2015, provides a platform for lenders to align their deployment of capital with sustainable environmental and economic policies.

Marine de Bazelaire, director of sustainable development at HSBC, a commercial supporter of the initiative, told Development Finance: “Sharing knowledge and best practices is crucial to increase our level of competency at a pace feasible with the climate change challenge. This is what this initiative is aiming to do. For example, we coordinated the work stream dedicated to sustainable cities, where most of the investment needs will concentrate. The first step was to identify all existing initiatives, and evaluate how we could work and complement their task.”

She added that among the supporting institutions, many have already committed to financing through targets and instruments, though others need to better understand “what the needs and levers are to finance them”.

She concluded: “One of our next steps should be to identify current practice in collaborating with subnational governments.”

The initiative takes in Five Principles for supporting institutions to uphold. These include committing to climate strategies, managing climate risks, promoting climate smart objectives, improving climate smart objectives, and accounting for climate action from each supporter.

Mariana Deheza, project manager for finance, investment and climate for the initiative’s chosen secretariat, the Institute for Climate Economics, commented:

“We call them supporting institutions because we perceive that they are supporting five principles for mainstreaming climate action into their own strategies, treating climate change not as a different criteria they can apply to their investments, but as one of the core lenses through which they deploy all types of investment,” Dehza said.

Dehza added that the late launch of the website, more than a year after COP21, was chosen specifically to allow time for its supporters to agree on its areas of focus. These areas, known on their webpage as the Four Work Streams, comprise risk methodology, financial instruments, urban climate action and institutional adoption of climate strategy.

No financial institutions from the US are currently among the official supporters of the initiative. On 1 June 2017, US president Donald Trump announced US withdrawal from the COP21 agreement, stating the country under his leadership would seek new terms with which to comply in the interest of US jobs and businesses.

Deheza said: “Institutions that have joined this initiative have expressed that they want to be leaders on this topic. The idea is not to constrain institutions.”

The supporting institutions 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, TSKB.

Also included are multilateral development banks such as the African Development Bank, the Asian Development Bank, the Council of European Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank, the International Finance Corporation (IFC) and MIGA, the New Development Bank, and the World Bank.

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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