World Bank

Climate risk, resilience and adaptation

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

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Paris alignmentReasoning
Paris alignedThe World Bank screens all projects for climate risk; climate resilience strategy includes systemic country view; relatively high levels of adaptation finance.
Project-level climate risk management proceduresScope of coverage of project-level climate risk managementEnhancing client climate resilience Adaptation  
finance 
IDA projects are examined for risk and for resilience measures.Comprehensive coverage.There is a dedicated strategy for risk/resilience taking the systemic view for client countries.IBRD and IDA are steadily increasing their adaptation finance.

Explanation

The World Bank Group’s Climate and Disaster Risk Screening Tools can be applied at the project level. IDA operations are supposed to be screened for short- and long-term climate change and disaster risks and, where risks exist, appropriate resilience measures integrated in the project design. The World Bank’s risk mitigation hierarchy is anticipate/avoid-minimise-mitigate-compensate/offset, which should be applied to climate risks too. 

All IDA projects are screened for climate change risks. All IBRD projects have been screened for climate and disaster risk as of July 2017. The IFC is applying sector- and investment-specific tools to systematically evaluate physical climate risk in new investment due diligence, “going beyond the existing environmental and social risk assessment”. 

The World Bank Group’s Action Plan on Climate Change Adaptation and Resilience intends to help countries shift to systematically managing and incorporating climate risks and opportunities across policy planning, investment design, and implementation—and calls for the integration of climate risks within each stage of group operation design, implementation, and performance monitoring and evaluation. The World Bank Group’s Climate Change Action Plan states “countries will be helped with National Investment Plans to ensure ‘climate smart’ public investments”. Any new IDA Country Partnership Framework is supposed to integrate risk consideration into country development priorities. Guidelines for climate risk are to be integrated in performance-based contracting for every infrastructure typeThe World Bank has a MultiCat programme which helps countries issue catastrophe bonds; it also provides assistance for developing mechanisms such as weather derivatives. 

The Climate Change Knowledge Portal and the ThinkHazard tool provide World Bank staff with the tools to assess climate risk for individual projects. Project teams and task team leaders can use the Climate Change Knowledge Portal to ensure projects adequately reflect the climate risks identified within the Country Partnership Framework (CPF). ThinkHazard also provides project teams with an online disaster risk visualisation. 

The World Bank Group’s Adaptation and Resilience Action Plan  

In January 2019, the World Bank Group launched a standalone strategy for its work on adaptation and resilience, with the following three core objectives: 

  1. Boosting adaptation finance  
  2. Driving a mainstreamed, whole-of-government programmatic approach 
  3. Developing a new rating system for adaptation and resilience 

On the third point, the World Bank Group released a landmark report in July 2019 titled Lifelines: The Resilient Infrastructure Opportunity. Among other findings, the report concludes that the extra cost of building resilience into power, water and sanitation, transport, and telecommunications systems is only 3% of overall investment needs. However, investing in more resilient infrastructure in low- and middle-income countries is estimated to yield an average of $4 for each $1 invested, with total net benefits of  

USD 4.2 trillion. The report offers a menu of actions for countries, allowing tailored approaches. The report is based on an expanded view of resilience, holding that high-quality infrastructure should contribute to more than just the resilience of assets but also to the resilience of services and the resilience of users and broader systems. Drawing upon this report, the World Bank Group aims to develop a new rating system intended to serve as a global standard for classing the resilience of infrastructure, expected pilot phase was intended in 2019. 

This strategy can be used as a blueprint for other development banks in their approach to climate risk and resilience. It should be noted however that there was no mention of the Paris Agreement in this strategy, despite being a key international agreement in this area. The Lifelines report contained one reference to the Paris Agreement. 

Climate Investment Funds: Pilot Program for Climate Resilience 

Pilot Program for Climate Resilience (PPCR) is a USD 1.2 billion fund administered by Climate Investment Funds for assisting national governments to integrate climate resilience into development planning. It can also provide funding to implement a national adaptation plan. About 80% of the funding has already been deployed.  

This is a good example of a programme that identifies new resilience opportunities and helps countries to mainstream adaptation into development planning, which should in theory help countries develop structural resilience.  

According to the 2015 results, as of December 2015, more than 2.8 million people have been directly supported by 20 PPCR projects under implementation. In addition, 8 PPCR countries out of 17 have already developed or embedded climate change in their key national documents. Under the PPCR, concessional financing has also been set aside for innovative private sector projects. IBRD and the Asian Development Bank are currently administering the largest amount within the PPCR programme.  

Last Update: November 2020

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