One word was heard throughout the One Planet Summit, which took place on 12 December in Paris, France under the auspices of French President Emmanuel Macron: Mainstreaming. This international Summit brought together world leaders and many of the key actors at the interface between climate change and the financial sector. Throughout the week in the margins of this Summit, a full program of events took place.

Throughout the Summit, the focus was on announcing and demonstrating concrete action to move forward on the climate engagements and commitments that governments and institutions of all sorts have taken over the last few years.

The Climate Action in Financial Institutions Initiative – as well as its Supporting Institutions – were visible and present from the start of the week. The AFD hosted the Mainstreaming! morning event on the 11th where the initiative was proud to launch the 2017 Climate Mainstreaming Practices report – as well as announce that our numbers are growing with a total of 37 members today.

 

Discover the institutions, which joined the Initiative

 

Perhaps more importantly however, the spirit and ambition behind the 5 Voluntary Principles for Mainstreaming Climate Action were at the heart of discussions. Almost all of the milestones, commitments, actions and programs presented during this busy week can be directly linked to the Five Principles. Here, the Secretariat of the Initiative is happy to present a brief overview how the 5 Principles continue to be a relevant and useful framework for moving forward on climate action.

Moving forward, it will be important that an increasing number of financial institutions of all kinds demonstrate publically how they are “walking the talk” to decisively mainstream climate change across all of their operations and strategies.

Announcements made by financial institutions supporting the initiative:

Joint IDFC-MDB Statement: Together Major Development Finance Institutions Align Financial Flows with the Paris Agreement

MDBs and members of IDFC committed, among other, to “further embed climate change considerations within their strategies and activities, and promote the mainstreaming of climate action throughout the financial community, inspired by the five voluntary Principles for Mainstreaming Climate Action within Financial Institutions. Specific attention will be devoted to managing climate risk and to the integration of climate resilience and adaptation.”

Press release : www.adb.org/news/together-major-development-finance-institutions-align-financial-flows-paris-agreement

World Bank Group’s steps to align with the Paris Agreement

The World Bank Group, one of the One Planet Summit’s sponsored, made a number of announcements as part of its efforts to support recipient countries to meet their climate targets.

First, it pledged that it will no longer finance upstream oil and gas, after 2019.

Second, it announced that is on track to meet its target of 28% of its lending going to climate action by 2020 and to meeting the goals of its new Climate Change Action Plan. Furthermore, the World Bank Group will present a stock-take of its Climate Change Action Plan and announce new commitments and targets beyond 2020 at COP24 in Poland in 2018.

Third, starting next year the WBG will assess and report greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy. The results will be published in late 2018, and annually thereafter.

Fourth, the World Bank will be applying a shadow price on carbon in the economic analysis of all IBRD/IDA projects in key high-emitting sectors where design has begun since July 2017.  IFC started using carbon pricing in key sectors in January 2017 and will mainstream the same starting January 2018″

Finally, to accelerate the mobilization of finance:

  1. IFC will invest up to $325 million in the Green Cornerstone Bond Fund, a partnership with Amundi, to create the largest ever green-bond fund dedicated to emerging markets.
  2. The World Bank and the Government of Egypt signed a $1.15 billion development policy loan aimed at reducing fossil fuel subsidies and creating the environment for low-carbon energy development.
  3. IFC will work to set a single unifying global standard on green bonds, similar to the Equator Principles, as a means to facilitate the development of the green bond market to crowd in private finance into climate business

Press release : www.worldbank.org/en/news/press-release/2017/12/12/world-bank-group-announcements-at-one-planet-summit?CID=ECR_FB_worldbank_EN_EXT_OnePlanet

EBRD and EIB signed a partnership with the European Commission and the Global Covenant of Mayors to help cities finance climate action

At the One Planet climate summit, EBRD President Sir Suma Chakrabarti unveiled the Green Cities Climate Finance Accelerator, launched together with the Global Covenant of Mayors for Climate and Energy (GCoM). The EBRD will provide over US$ 500 million in “first mover” financing aimed at leveraging additional third party contributions for the development and implementation of city action plans and projects worth a total of US$ 1.5 billion.

Press release : www.ebrd.com/news/2017/ebrd-and-global-cities-group-scale-up-green-urban-financing.html

Jonathan Taylor, European Investment Bank Vice President announced that the Global Covenant of Mayors and the EIB  are forging a new partnership under the name Global Urbis. This aims to develop an innovative global advisory and financing facility focused on fostering Climate Action investments in cities.

Press release: www.eib.org/infocentre/press/news/all/new-eib-partnership-to-support-climate-action-in-cities-announced-at-one-planet-summit.htm

UN Environment and BNP Paribas partner to bring private capital to sustainable projects in emerging countries

UN Environment and BNP Paribas have signed an agreement that builds on the Tropical Landscapes Financing Facility, a partnership between UN Environment, BNP Paribas, World Agroforestry Centre and ADM Capital in Indonesia.

UN Environment and BNP Paribas will scale the collaborative effort by establishing Sustainable Finance Facilities in many more developing countries, with a target capital funding amount of US$10 billion by 2025.

Through sourcing funding from third party global investors, and arranging and issuing green loans, Sustainable Finance Facilities aim to help channel finance from the private sector to fund sustainable economic development in emerging countries.

Press release : www.unenvironment.org/news-and-stories/press-release/un-environment-and-bnp-paribas-partner-bring-private-capital

AFD committed to be the first “100% Paris Agreement” financial institution

AFD has adopted a new climate strategy, with the commitment to be the first “100% Paris Agreement” financial institution.

AFD also promoted during the One Planet Summit the new tools they developed to accelerate adaptation measures:

  • An “Adapt’Action Facility”, endowed with €30 million over four years. It will target 15 countries especially exposed and vulnerable to the effects of climate change and provide them with technical assistance in implementing their national contributions. Its four first financing agreements, with the Republic of Mauritius, Niger, the Comoros, and Tunisia were signed during the One Planet Summit week.
  • A “2050 Facility”, to help countries in financing the working out of their low-carbon and resilient development trajectories, which are to be established by 2020 according to the terms of the Agreement.
  • A Pacific initiative, in which the European Commission and other donors will also be involved, in order to finance adaptation to climate change in especially vulnerable small island states of the Pacific region.
  • A land degradation neutrality (LDN) fund to fight against land degradation; AFD will contribute €30 million to the fund.

In all, AFD committed to increase the volume of its annual financing for adaptation to €1.2 million in 2020 and its total annual climate financing from €4 billion in 2017 to €5 billion in 2020.

Press release: www.afd.fr/en/one-planet-summit-our-concrete-commitments

The Inter-American Development Bank Group (IDB Group), the World Bank Group, and the Caribbean Development Bank will fund the world’s first “climate-smart zone”

Caribbean leaders announced the launch of a new public-private coalition to create a Climate-Smart Zone that aims to transform the regional energy system, build resiliency and drive economic growth in the Caribbean.

Press release: cop23.unfccc.int/news/caribbean-leaders-launch-plan-to-create-the-world-s-first-climate-smart-zone

Other key announcements were made, many of which also embody the spirit of the 5 Principles:

Public policy announcements:

  • Canada, Colombia, Costa Rica, Chile and Mexico pledged to apply the cost of carbon dioxide discharges to guide public investment decisions and to encourage private companies to follow suit through internal pricing systems.
  • China announced that “by 2020 every listed company in China must disclose information on environmental impacts”
  • OECD announced the launch of the “Paris Collaborative on Green Budgeting”, a strategic initiative to assess and drive the alignment of national budgetary processes with the Paris Agreement and other environmental goals.
  • Climate Action and Energy Commissioner Miguel Arias Cañete announced climate-relevant investments in three targeted areas – sustainable cities, sustainable energy and connectivity and sustainable agriculture, rural entrepreneurs and agribusiness. These targeted areas are expected to generate up to EUR €9 billion investments by 2020.

Financial institutions announcements:

  • Central banks and supervisors launched the Network for Greening the Financial System, a forum for authorities to exchange views and best practices with regards to climate related risks for the financial sector and the development of green finance.
  • The 225 investors members of “Climate Action 100+” committed to ask companies to: “Implement a strong governance framework which clearly articulates the board’s accountability and oversight of climate change risk; take action to reduce greenhouse gas emissions across their value chain; provide enhanced corporate disclosure in line with the final recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).”
  • Two hundred thirty-seven companies with a combined market capitalization of over $6.3 trillion have publicly committed to support the TCFD.
  • The BNP Paribas Foundation and the Bill & Melinda Gates Foundation, under the patronage of the President of France, launched One Planet Fellowship.
  • AXA presented the acceleration of its commitment to fight climate change: multiplying green investments fourfold to Euro 12 billion by 2020; and committing to over Euro 3 billion of additional divestments from carbon-intensive energy producers:

Other announcements:

  • ICLEI, C40 and the Global Covenant of Mayors for Climate & Energy announced the One Planet Charter to accelerate the implementation of the Paris Agreement in cities and local governments across the world.
  • C40 Cities launched the U20 initiative to raise the profile of urban issues and enhance the role of cities in the G20 agenda.
  • Nine of Europe’s largest industrial emitters of green bonds (EDF, Enel, ENGIE, Iberdrola, Icade, Paprec, SNCF Réseau, SSE and TenneT) committed that green bonds will be at the heart of their project financing and business lines, and that they will implement stringent reporting procedures.