Institutional leadership and information sharing

Explanation

With an objective to do 75% of its business in the private sector over the course of 2021–2025, the EBRD is a clear leader in the greening of the private sector and in aligning its indirect financing with Paris goals. The EBRD’s Paris alignment methodology, published in 2022, sets ambitious and robust criteria for alignment of indirect finance operations. The Bank’s methodology, which includes counterparty assessment to understand climate-related business practices as well as the necessity for counterparties to publish transition plans, represents best practice among MDBs (alongside the European Investment Bank’s (EIB) PATH framework).

The methodology’s alignment criteria are underpinned by a strong technical assistance offer. This includes flagship programmes such as the Corporate Climate Governance Facility, which supports clients in improving their climate governance, managing climate-related risks and unlocking green investment opportunities through the development of transition plans. To give an example, the EBRD’s financial sector Paris alignment intervention in Armenia offers a multi-layered approach with support to the Central Bank of Armenia to create conditions for climate-related financial disclosure as well as a climate transition planning programme for clients and climate transition planning masterclasses for the wider financial community. This is an innovative and comprehensive model of engagement which is now being replicated and deployed in multiple EBRD partner countries.

The EBRD is also a leader in international fora on driving the greening of private finance flows. The EBRD has been a key actor in the development of the EU Sustainable Finance Framework, and is also involved in the International Platform for Sustainable Finance. The EBRD has been actively involved in the Mainstreaming Climate in Financial Institutions initiative and the Network for Greening the Financial System.

The EBRD is a pioneer of new collaborative initiatives supporting country level implementation of climate action. The Bank was a founding member of the NDC Partnership in 2016 and has periodically been represented on its Steering Committee. In recent years, the EBRD has also been exploring the country platform model of engagement. Country platforms are government-led coordination entities that serve as focal points for governments and their partners to understand intricate political, social, and economic landscapes. They enable alignment on common priorities for national sustainable development and climate goals while addressing issues that require joint efforts. The EBRD is actively engaging in North Macedonia’s Just Energy Transition Investment Platform launched at COP28 in 2023, and is also the coordinating institution for the energy pillar of Egypt’s country platform. The EBRD is also working with Türkiye on the development of an industrial decarbonisation country platform. Country platforms have the potential to be a transformational model for facilitating cleaner and more resilient national development pathways.  

Further examples of EBRD’s institutional leadership include:

• Green bonds: While the EBRD has a long-standing green bond offer, its more recent Climate Transition Bonds and Climate Resilience Bonds have transformational potential as the first bond offering by an MDB to be earmarked for industrial decarbonisation and climate resilience projects respectively. Furthermore, the EBRD is part of the Global Green Bond Initiative, which aims to provide technical assistance to green bond issuers in emerging markets and developing economies and offer a dedicated de-risked fund for green bond investments.
• Engagement with subnational actors: The EBRD is a leader among its peers in this regard, most prominently through the Green Cities programme, which is active in over 60 cities across the Bank’s countries of operation and offers a comprehensive approach to green urban development though investments, policy actions and capacity building.
• Blue economy: The EBRD shows leadership on blue economy issues, most prominently with the launch at COP27 in 2022 of the Blue Mediterranean Partnership alongside the EIB and the Union for the Mediterranean (UfM). The partnership aims to coordinate the financing of blue economy projects in the Mediterranean and Red Sea regions. The EBRD is also part of the Clean Oceans Initiatives, and was part of the consortium of institutions which committed to work together on a Blue Finance Roadmap at the Finance in Common Summit in 2023.  
• The Bank was the first among its peers to commit to Task Force on Climate-Related Financial (TCFD) reporting back in 2018.

Recommendation: 

• Reflecting the leadership the EBRD has shown in this area, the Bank should make concerted efforts under the forthcoming update to its Green Economy Transition approach to work with partners to accelerate the transformation of the financial system. This should include deepening work on transition planning, including the continued promotion of emerging best practice and efforts to build coherence between national and private sector transition plans and accompanying policy frameworks. This could include dedicated capacity building efforts, building on the work of the Corporate Climate Governance Facility. Deeper work with other regional MDBs could also help contribute to globally interoperable standards and approaches.