Islamic Development Bank

Fossil fuel exclusion policies

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

Share
Paris AlignmentReasoning
UnalignedNo policies to restrict financing of fossil fuels at IsDB, although significant exclusions are applied to IsDB “green” finance under the Sustainable Finance Framework, which is welcome.
 Alignment and Reasoning
Coal policiesIsDB green finance excludes energy efficiency of coal infrastructure.
Upstream oil and gas policiesIsDB green finance excludes upstream fossil fuel extraction and production (including gas, coal and oil).
Downstream oil and gas policies IsDB green finance excludes distribution and transportation of fossil fuels.
Supply-side energy efficiency IsDB green finance excludes excludes energy efficiency projects that lead to an increase in CO₂ emissions (through capacity expansion and increased output as a result of the project/investment and new standalone fossil fuel electricity production).

Explanation

According to IsDB Energy Sector Policy , “IsDB intends to play a catalytic role in promoting renewables, and solar energy in particular, as a part of its goal of sustainable energy development and as an alternative to fossil fuels”. 

Under the IsDB Sustainable Finance Framework, all IsDB operations are subject to SDGs and do no harm criteria. Furthermore, the “green” part of the Sustainable Finance Framework applies to green financing. However E3G understands that the Framework “guides” all the work of the institution. The following exclusions apply to IsDB green and social financing: 

  • Upstream fossil fuel extraction and production (including gas, coal and oil).  
  • New standalone fossil fuel electricity production.  
  • Energy efficiency of coal infrastructure.  
  • Energy efficiency projects that lead to an increase in CO₂ emissions (through capacity expansion and increased output as a result of the project/investment). 
  • Processing, storing, marketing of gas, coal, and oil.  
  • Refining of oil.  
  • Nuclear power generation and related assets.  
  • Distribution or transport of fossil fuels. 
  • Heavy duty vehicles, infrastructure for fossil fuels (e.g., fuel stations) or bunker fuelled shipping infrastructure.  

Recommendation: The IsDB Sustainable Finance Framework should be expanded in scope to cover all the IsDB financing and operations. 

Last Update: November 2020

Subscribe to our newsletter

    Privacy and Cookie policy