In September 2019 in New York City, the UN Secretary General Antonio Guterres convened a “United Nations Climate Action Summit”. Taking place in conjunction with the UN General Assembly, the Summit sought to increase the ambition and momentum of global climate action. The Summit was structured to showcase the efforts of governments, businesses, and civil society to increase their commitments under the Paris Agreement and work toward reducing greenhouse gas emissions to ‘net zero’ by mid-century. While many may be disappointed by the lack of ambitious of announcements by countries, a number of noteworthy announcements and discussions focusing on the topics of resilience and alignment took place within the financial community.

Coming out of the Summit, many actors were disappointed that countries have fallen short to enhance ambition and take the concrete actions that they were asked to bring to the table in New York. Nevertheless, a number of ambitious commitments were taken towards the decarbonization of national economies:

  • President of Chile, Sebastián Piñera, announced the “Climate Ambition Alliance,” bringing together nations upscaling action by 2020, as well as those working towards achieving net zero CO2 emissions by 2050. As of now:
    • 59 nations have signaled their intention to submit an enhanced climate action plan (or NDC), and an additional 11 nations have started an internal process to boost ambition.
    • 65 countries and the European Union, joined by 10 regions, 102 cities, 93 businesses and 12 investors – all committed to net zero CO2 emissions by 2050.
  • The Russian Federation has finally joined the Paris Agreement, one of the largest GHG emitters;

Additionally, a number of announcements were made to accelerate action on climate resilience, including in the financial sector the launch of the Climate Resilience Principles for the US market by the Climate Bonds Initiative (CBI), the release for consultation of a new joint MDB-IDFC “Framework for Climate Resilience Metrics in Financing Operations” and the launch of the Coalition for Climate Resilient Investing, bringing together over 30 actors from across the investment value chain.

To support climate action in developping countries, additional pledges were made to the Green Climate Fund’s (GCF) replenishment, bringing the total raised so far to $7.4 billion.

Perhaps above all, the term of ‘Alignment’ with the goals of the Paris Agreement was heard across many of the discussions both at and in the margins of the Summit. In the financial sector, the attention to alignment builds on the commitment to align their activities with the Paris Agreement made by the development finance institutions at One Planet Summit in 2017 and a group of commercial financial institutions at COP24. In New York, the topic of Alignment was found at the heart of an increasing number of initiatives – such as the newly-launched Net Zero Asset Owner Alliance, the UNEP FI “Principles for Responsible Banking” (PRB), and the Partnership for Carbon Accounting Financials (PCAF) as well as significant new commitments from the multilateral development banks (MDBs) and the International Development Finance Club (IDFC) detailed below.

As to date there is no common definition of what Paris Alignment means and implies in practice, the Climate Action in Financial Institutions hosted an expert workshop to help fill this gap. The event was organized in partnership with the IDFC[1] and the group of MDBS with support from the European Climate Foundation. It aimed to take stock of progress made and identify areas to move forward on Alignment with the Paris Agreement. Part of a series of workshops, which started at COP24 in Katowice, it brought together more than 80 experts on the topic of alignment from the financial institutions and research community.

The workshop identified the points of convergence and remaining divergence on what Paris Alignment means in Practice. The event included the launch of the joint research project Aligning with the Paris Agreement[2] conducted by I4CE and CPI with support from ECF and IDFC – as well as updates on progress made to date by MDBs’, IDFC Institutions and IIGCC[3]. Building on these presentations, participants of the workshop highlighted that it is important for financial institutions to go beyond doing no harm to also make direct contributions to achieving the long-term climate objectives. A number of continued challenges around Paris Alignment in practice were nevertheless highlighted, including:

  • Defining and measuring the consistency or inconsistency of activities;
  • Managing the lack of visibility and uncertainty around the national trajectories; or
  • The difficulties to integrate or ‘mainstream’ within institutions a common understanding of what alignment requires and the implications for business models and operations.

All participants of the workshop agreed on the need to further collaborate between all types of financial institutions and to collectively work on addressing some of the common questions raised. The Climate Action in Financial Institutions Initiative will continue to provide a space for collaboration on this topic towards COP25 and 2020.

Summary of discussions



Round Up of Commitments and Announcements from Supporting Institutions

At the Summit many Supporting Institutions of the Climate Action in Financial Institutions Initiative announced a number of new commitments:

  • The IDFC released a set of joint contributions to make progress towards the implementation of the Sustainable Development Goals and the implementation of the Paris Agreement:
    1. Mobilize significant financing volumes in order to help achieve these goals:
      • Provide more than USD 1 trillion of climate finance by 2025, including an increasing share for adaptation and resilience;
      • Leverage financing from the private sector and create the space for blending of public finance to accelerate the crowding in and reorientation of private finance for sustainable and climate-compatible development
    2. Further align financial flows with the Paris Agreement and the SDGs by having Club members:
      • Work at country and sub-national level and engage with other actors to support national constituencies implement their commitments to the Paris Agreement and provide policy advice to devise development pathways consistent with long term resilience and carbon neutrality;
      • Further embed climate change considerations and alignment with the Paris Agreement within IDFC members’ strategies;
      • Redirect financial flows in support of low-carbon and climate-resilient sustainable development.
    3. Promote the development of sustainable alternatives to fossil fuel
      • Promote and contribute to long-term carbon neutrality;
      • Support increased pace and coverage of renewable energy and energy efficiency investments as well as clean technologies;
      • Consider the range of fossil fuel investments in portfolios, work towards applying more stringent investment criteria according to members’ mandates, and consider ways and means to reducing it, taking into account national and regional circumstances and in line with NDCs and long term strategies, such as explicit policies to exit from or significantly reduce coal financing.
    4. To achieve this, IDFC announced:
      • The launch of a USD10mn IDFC Climate Facility
      • a strategic partnership with the Green Climate Fund
    5. IDFC members called for strong political support from governments and regulators

In addition, the IDFC proposed the organization under the patronage of the UN of a Summit of Development Banks to mobilize all development finance institutions worldwide as well as their broad stakeholders. This summit would aim to further leverage their potential to enable the implementation of the climate and SDGs agendas.

  • MDBs announced through a high-level statement five joint actions to help their clients adapt to and mitigate climate risks:
    1. ACTION 1: Each institution has individually committed to support increased climate finance levels over time:
      • Expect our individual efforts to collectively total at least USD$65 billion annually by 2025, with $50 billion for low and middle income economies, 50 percent above current levels.1
      • Expect the collective efforts to double the total level of adaptation finance provided to clients to USD$18 billion annually by 2025, compared to current levels.
    2. ACTION 2: Based on current trends, they expect that collective efforts to also result in a further $40 billion of climate investments mobilized annually by 2025 from private sector investors, including through the increased provision of technical assistance, use of guarantees, and other de-risking instruments.
    3. ACTION 3: Commit to helping clients deliver on the goals of the Paris Agreement. At COP25 they will present key elements of our common framework, which defines clear principles each institution will incorporate, starting from 2021, in ways reflective of their unique client base and operations. Principles for intermediated financing activities are still under development and will be presented by the time of COP26.
    4. ACTION 4: Develop a new transparency framework to report on both the impact of each MDB’s activities and how these are helping clients meet and exceed commitments they have made, to be presented at COP25. This framework will be informed by consultations with multiple stakeholders, with the objective of broadening its use across the financial sector, beyond MDBs.
    5. ACTION 5: Each institution will take actions to help clients move away from the use of fossil fuels by:
      • Sharing at COP25 principles that can help public and private sector clients design and implement long-term low GHG emissions and climate resilient strategies that grow in ambition over time. This approach should help governments assess their individual progress on their climate commitments and help bridge the gap between the countries’ current efforts and the long-term goals of signatories to the Paris Agreement.
      • Continue working with national development banks and other financial institutions, to develop, by COP26, financing and policy strategies supporting a just transition that promotes economic diversification and inclusion.

A number of individual Supporting Institutions also took commitments:

Over the next few months, discover how these commitments are implemented by financial institutions though the case studies uploaded on a regular basis as part of the Climate Mainstreaming Practices Database.  


[1] The International Development Finance Club (IDFC) is a group of 24 national, bilateral and regional development banks. Its combined assets represent USD 4 Trillion and its annual commitments can reach USD 850 billion. IDFC dedicates a significant portion of its financing to climate finance of around 20% of its total commitments and up to USD 200 billion some years, thus contributing to the redirection of international financial flows towards the fight against climate change.

[2] Part 1: Cochran, Ian and Alice Pauthier (2019). A Framework for Alignment with the Paris Agreement: Why, What and How for Financial Institutions? I4CE: Institute for Climate Economics, Paris.
Part 2: Clark, A., J. Choi, B. Tonkonogy, V. Micale, and C. Wetherbee. 2019. Implementing alignment with the Paris Agreement: Recommendations for the members of the International Development Finance Club. Climate Policy Initiative.

[3] The three networks are currently in the process of developping their approaches. Learn more: