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Supporting financial institutions in developing countries in their alignment journey with climate goals

This report provides practical guidance for International Financial Institutions (IFIs) to support financial institutions’ alignment with the Paris Agreement goals, and contribute to transforming local financial systems.

Key points

This guidance is developed around three pillars:

  • developing a harmonised alignment assessment;
  • supporting the alignment of financial intermediaries;
  • at the national level, supporting the alignment of financial systems.

Based on a review of existing assessment frameworks and interviews with IFIs and experts from civil society organisations, authors suggest structuring this alignment assessment around: 

  • a quantitative assessment of current operations;  
  • a qualitative assessment of internal processes; and  
  • a qualitative assessment of the forward-looking alignment strategy.

IFIs have the expertise to provide guidance on how to align internal processes with the Paris Agreement objectives over time. To develop comprehensive guidance, IFIs should rely on existing and upcoming international standards such as recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) or guidance on transition plans as well as guiding frameworks from voluntary initiatives on climate mainstreaming. Authors of the report suggest, on that basis, a principle-based step-by-step alignment journey for financial intermediaries.