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ADB

Asian Development Bank

Information presented in this profile is for reference only. The Initiative, its Supporting Institutions and the Secretariat do not endorse the activities, tools or reports included in this profile.

Last updated: November 2021

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Overview of climate mainstreaming approach and goals:

The Asia and Pacific region is at extreme risk of undoing its economic and social development gains due to unchecked disasters and unabated climate change. Guided by the Climate Change Operational Framework 2017-2030, ADB is positioned to shift towards a low greenhouse gas emissions and climate-resilient development path. The operational framework provides guidance across all ADB sector and thematic groups to strengthen climate actions, operationalizing ADB’s commitment to provide at least $6 billion per year in climate change financing from its own resources by 2020. It outlines actions and the institutional measures to be implemented to enable ADB to meet the climate needs of its developing members.

ADB remains committed to supporting low-carbon and climate resilient development in Asia and the Pacific through the Strategy 2030 and its climate targets.  Tackling climate change, building climate and disaster resilience and enhancing environmental sustainability is one of ADB’s operational priorities (OPs) coupled with new climate targets under Strategy 2030, where ADB has committed ambitious climate change targets: 75% of the number of its committed operations (3-year rolling average, including sovereign and nonsovereign operations) will support climate change mitigation and adaptation by 2030, and climate finance from ADB’s own resources will reach $80 billion cumulatively from 2019 to 2030.

The third operational priority (OP3) of Strategy 2030 is to tackle climate change, build climate and disaster resilience, and enhance environmental sustainability. Key responses identified in Strategy 2030 operational priority 3 include (i) scaling up support to address climate change, disaster risks, and environmental degradation; (ii) accelerating low GHG emission development; (iii) ensuring a comprehensive approach to build climate and disaster resilience; (iv) ensuring environmental sustainability; and (v) increasing focus on the water–food–energy nexus.

The Asian Development Bank (ADB) has announced its commitment to align its operations with the goals of the Paris Agreement. ADB will achieve full alignment of its sovereign operations by 1 July 2023. Alignment of its private sector operations will reach at least 85% by 1 July 2023 and 100% by 1 July 2025.  As our region is expected to recover from the pandemic, ADB will significantly scale-up investments in adaptation and resilience by doubling annual average climate adaptation finance (compared with 2015–2018), which will result in cumulative financing of $9 billion from 2019 to 2024. These important new targets will ensure a better balance between mitigation and adaptation finance.

Principal Strategic Documents

Principal Tools and Methodologies

  • ADB Tools and Methodologies:
    • Climate Change Financing at ADB: The site contains a dashboard showing data on climate financing from 2017 onwards coming from ADB administered donor trust funds. Financing from multilateral climate funds such as Global Environment Facility, Climate Investment Fund, Green Climate Fund, and bilateral financing, among other are detailed. Data is disaggregated by: mitigation finance/adaptation finance, sector, region, instrument, recipient, and source. A link to downloadable datasets is also presented in the site.
    • Climate Risk Management in ADB Projects: ADB’s climate risk management approach aims to reduce risks resulting from climate change to investment projects in Asia and the Pacific. ADB’s framework identifies climate change risks to project performance in the early stages of project development and incorporates adaptation measures in the design of projects at risk.
    • Principles of Climate Risk Management for Climate Proofing Projects: This document identifies opportunities to update the Asian Development Bank (ADB) climate risk management (CRM) process and climate risk and adaptation assessments (CRAs). The intent is to streamline the CRM framework with a fit-for-purpose approach, and to improve the quality and consistency of CRAs. To this end, a set of guiding principles aligned with the three main phases of the ADB project cycle—conceptualization, preparation, and implementation—is presented here. The principles highlight the value of a more strategic method for upstream activities, as well as the benefits of a differentiated approach, in view of the varying CRA needs of projects. Specific principles are proposed for improving the main CRA steps, with a focus on project understanding and decision-led risk assessment, and on the prioritization of adaptation options. Finally, the paper emphasizes the need to strengthen downstream activities, to ensure that good practice flows into implementation. The paper provides useful lessons and insights into climate risk management for ADB and its developing member countries, as well as information relevant to climate risk assessments of investments.
    • Guidelines for Climate Proofing Investment in the Water Sector: Water Supply and Sanitation (December 2016): This methodological approach assists project teams in managing climate change risk in the context of water supply and sanitation investment projects.
    • Guidelines for Climate Proofing Investment in the Energy Sector (May 2013): This provides a step-by-step methodological approach to help project teams assess climate change adaptation measures into energy investment projects.
    • Guidelines for Climate Proofing Investment in Agriculture, Rural Development, and Food Security (November 2012): This publication aims to present a step-by-step methodological approach to assist project teams assess and incorporate climate change adaptation measures into investment projects in agriculture, rural development, and food security.
    • Guidelines for Climate Proofing Investment in the Transport Sector: Road Infrastructure Projects (October 2011): This publication aims to present a step-by-step methodological approach to assist project teams to incorporate climate change adaptation measures into transport sector investment projects.
    • Guidelines for the Economic Analysis of Projects (March 2017): Guidelines for ADB staff, consultants, and officials of developing member countries in assessing project proposals for economic viability and financial sustainability. Also provide guidance on the use of social cost of carbon, i.e. in valuing GHG emissions, it is important to use a standard value, also called global social cost of carbon, across all projects. A review of the empirical estimates of the global social cost of carbon reported by the Intergovernmental Panel on Climate Change suggests a unit value of $36.30 per ton of CO2 or its equivalent in 2016 prices for 2016 emissions, to be increased by 2% annually in real terms to allow for the potential of increasing marginal damage of global warming over time. This unit value can be used to estimate the benefit in damage avoided for projects that reduce emissions and the cost in damage created for projects that increase emissions. The unit value may be revised in the future as more and new estimates of global warming damage become available. (para 163)
    • Greenhouse Gas Emissions Accounting for ADB Energy Project Economic Analysis: Guidance Note: Reporting of emissions of energy projects outside of economic analysis uses a different point of comparison (a baseline scenario) than does economic analysis (a without project scenario). As economic analysis needs to use a consistent set of scenarios across benefit streams, the note recommends and illustrates the use of a without project scenario for calculating emissions effects in project economic analysis.
    • Guidelines for Estimating Greenhouse Gas Emissions of Asian Development Bank projects: Additional guidance for clean energy projects: This publication aims to help project officers at ADB estimate GHG emissions reductions attributable to their energy projects in a manner consistent with the IFIs’   guidance documents.
    • Guidelines for Estimating Greenhouse Gas Emissions of Asian Development Bank Projects: Additional Guidance for Transport Projects: This publication provides ADB transport sector staff, consultants, and other interested readers with an understanding of key concepts and principles in measuring climate change impacts of transport projects. Guidelines herein focus on greenhouse gas emissions as part of climate change mitigation and include a practical set of methods in measuring emissions of different transport subsectors.
  • Joint MDB Tools and Methodologies
    • Common Principles for Climate Mitigation Finance Tracking: The purpose of these Common Principles for Climate Mitigation Finance Tracking (or the Principles) is to set out agreed climate change mitigation finance tracking principles for development finance. The Principles have been developed by the joint climate finance group of multilateral development banks (MDBs) and the International Development Finance Club (IDFC).
    • Common Principles for Climate Change Adaptation Finance Tracking: The MDBs and the IDFC commit to developing common principles and guidelines based on their respective, group-based climate change adaptation finance tracking and reporting. MDBs and IDFC invite other institutions to adopt the Common Principles and therewith further increase transparency and credibility of adaptation finance reporting.
    • A Framework and Principles for Climate Resilience Metrics: This paper sets out principles, including  core  concepts  and  other  characteristics  of  climate  resilience  metrics,  together  with a  high-level  framework  for  such  metrics  in  financing operations, focusing mainly on MDB and IDFC operations but  with  wider  applicability  to  other  types  of  financial institutions.
    • The MDBs’ alignment approach to the objectives of the Paris Agreement: The MDBs’ approach is based on six building blocks that have been identified as the core areas for alignment with the objectives of the Paris Agreement. A joint MDB working group is developing methods and tools to operationalize this effort under each of the building blocks: 1) Alignment with mitigation goals ; 2) Adaptation and climate-resilient operations ; 3) Accelerated contribution to the transition through climate finance ; 4) Engagement and policy development support ; 5) Reporting ; and, 6) Align internal activities.

Key Reports and Other Materials

  • ADB Key Reports:
  • Joint MDB Key Report
    • MDBs – 2020 joint report on climate finance: The Joint Report on Multilateral Development Banks’ Climate Finance is an annual collaborative effort to make public MDB climate finance figures, together with a clear explanation of the methodologies for tracking this finance. This joint report, alongside the MDBs’ publication of climate finance statistics in their respective corporate media, is intended to track progress in relation to climate finance targets such as those announced around COP21, and the greater ambition pledged for the post-2020 period.