Institutional leadership and information sharing

Explanation

The IDB has demonstrated institutional leadership in a number of areas. Notably, it co-hosted the 2023 edition of the Finance in Common Summit (FiCS), along with the Association of Latin America Development Finance Institutions (ALIDE), CAF, and Bancoldex. Finance in Common is a global network for Public Development Banks to enhance cooperation and information sharing on the path toward Paris alignment.

At FiCS 2023, the IDB further showcased its institutional leadership in launching Amazonia Forever, building on its prior contribution to establishing the Amazon Initiative. Moreover, the IDB has previously led the MDBs in signing a joint statement on “Nature, People, and Planet” at COP26 to mainstream nature across operations and significantly boost nature finance. The commitment focused on five aspects: (1) setting out institutional strategic approaches to mainstream nature across the MDB ecosystem by 2025; (2) fostering “nature positive” investments; (3) facilitating national and regional public–private synergies; (4) valuing nature better in decision making; and (5) improving tracking and reporting on “nature positive” investments.

The IDB has shown particular leadership on green bonds and in its regional approach to green market expansion.[1] IDB actions seek to address specific points of inaction and hurdles in the region, for example addressing demand side inefficiencies and mobilising at-scale funds for small and medium-sized enterprises (SMEs). Furthermore, to address transparency and investors’ lack of specific green bond information, the Bank has developed the comprehensive Green Bond Transparency Platform, which is a benchmark, best practice, publicly accessible tool supporting the harmonisation and standardisation of green bond reporting, to benefit all market actors.

In terms of internal information sharing, according to several Bank officials, as part of the IDB Group’s Paris alignment commitment becoming operational as of January 1^st 2023, during the second semester of that year all staff across the Bank Group took part in a compulsory training on Paris alignment, green finance and climate finance.

Further examples of the IDB’s institutional leadership include:

1. Leadership on supporting countries with climate risk management, including catastrophe bonds which account for disasters specifically linked to climate change. The IDB has also been leading the joint MDB work on Paris alignment in the field of adaptation.
2. Convening discussions on sustainable infrastructure among various investors and groups, and releasing a call to action for governments, MDBs and investors to cooperate to increase sustainable infrastructure investment dramatically.
3. Leadership on the implementation of Nationally Determined Contributions (NDCs). This is demonstrated in initiatives such as NDC Invest, which was the first “one stop shop” NDC support initiative among the MDBs. To date, the platform has taken on more than 250 initiatives.
4. Leading the way on developing a Policy Based Loan (known as Development Policy Lending within the World Bank Group) for Costa Rica to support its decarbonisation and sustainable development strategy.

At the leadership level, IDB Group President Ilan Goldfajn has initiated the process of elevating climate from its previous status of cross-cutting consideration to being a direct priority for the Bank. The updated 2024 Institutional Strategy demonstrates concrete progress: it explicitly assigns the operational focus area of “biodiversity, natural capital, and climate action” a “dual focus” status as both a cross-cutting issue and a priority area in and of itself.

Recommendation: 

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[1] For further details, see the “Promotion of green finance” metric.