Level of climate finance transparency

Transparency of climate finance data

The IsDB does appear to have a public project database. However, this has been listed as undergoing scheduled maintenance for an extended period. As such, there is currently no means to view and obtain project-level data (including for climate projects) from the Bank’s website.

The IsDB notably joined the International Aid Transparency Initiative (IATI) in 2024, evidencing a commitment to improving transparency. However, IsDB data contained within the IATI data registry is provided in plain text (xml) format covering all projects (as opposed to in excel format where climate investments can readily be identified or are already separated).[1] At the portfolio level, organisational management information, such as monitoring and reporting frameworks and impact evaluation, are also not widely publicly available.

Reflective of the difficulties in accessing relevant project- and portfolio-level lending and impact information, the 2023 DFI Transparency Index ranks the IsDB last (9^th of 9) among assessed institutions for its sovereign portfolio. Similarly, the IsDB Group’s private sector arm, the Islamic Corporation for the Development of the Private Sector (ICD), is also ranked last (21^st of 21) for non-sovereign portfolio transparency.

There are some notable exceptions to the limited visibility with regards to the Bank’s climate efforts. The IsDB consistently reports aggregate climate finance figures, as well as mitigation and adaptation finance breakdown, as part of the annual Joint Report on Multilateral Development Banks’ (MDBs) Climate Finance. The Bank also discloses aggregate climate finance figures as part of its own Annual Reports.

Moreover, the Bank previously (2020) issued an annual impact report for its debut green sukuk.[2] This report provided valuable insights regarding the allocation of green sukuk proceeds (broken down by sector, location, and financing type) as well as outlining both project-level and aggregate results according to various climate-related impact metrics (notably including emissions reductions).

This fulfils the commitment in the Bank’s Sustainable Finance Framework to report allocation and impact of green sukuk proceeds at the portfolio level.[3] The framework provides guidance and mandates comprehensive allocation and impact reporting to take place on an annual basis. However, it was not possible to identify subsequent annual iterations of this report since the first version was published.

Transparency of financial intermediary lending

There is no indication that the IsDB mandates financial intermediaries (FIs) to release information regarding subprojects financed. As such, the IsDB in turn does not appear to report details regarding sub-projects financed through FIs on its website, or as part of its IATI data.

Robust FI disclosure standards are critical to mitigate the risk of IsDB funds being used in activities that are unaligned with the Bank’s overarching climate goals. This risk is particularly relevant considering the IsDB currently lacks a time-bound commitment for its non-sovereign operations to be Paris aligned. Oversight of subprojects financed by FIs is consequently a critical component of safeguarding the implementation of the IsDB’s climate commitments at the investment level. Moreover, to enhance efforts on Paris alignment, MDBs are well-positioned to assist partner financial institutions in their own journeys toward alignment, including through supporting and incentivising improving climate-related disclosure. 

TCFD reporting

There is no evidence that the IsDB currently undertakes any TCFD reporting. Going forward, disclosure should be in line with the International Sustainability Standard Board (ISSB) standards, as the TCFD has been absorbed into these. Of particular relevance for MDBs is alignment with ISSB’s IFRS S2 climate-related disclosure standard, both for the Bank’s own portfolio and for dissemination as a norm across its countries of operation. 

Recommendations:

• In line with best practice examples from peer institutions, such as the Intra-American Development Bank (IDB), the IsDB should release its project level climate finance data in machine-readable format, including clear identification of projects that contribute to its joint MDB climate finance reporting. This should be part of reinstating the project level database hosted on its website.
• The IsDB should aim to increase the transparency of its climate and development efforts by more consistently publishing information on its strategies and approaches. For example, several valuable publications are not publicly available, including country strategies, the Bank’s ten-year strategy, and its Paris alignment guidance. To improve transparency, accountability, and promote the exchange of best practices, such documentation should be more proactively made available on the IsDB’s website.
• In view of the potential risks posed by unaligned FI subprojects, particularly in the context of the IsDB’s Paris alignment commitments, the Bank should aim to strengthen its FI disclosure requirements. This should include mandatory public disclosure of subproject information, clear mechanisms for monitoring and enforcing compliance with environmental and social safeguards, and regular reporting on the climate impact (with relevant indicators depending on the project) of FI investments. To support this process, the IsDB should consider developing a targeted technical assistance offer for partner financial institutions to support and incentivise improving climate-related disclosures.
• The IsDB should consider committing to undertaking comprehensive climate-related financial disclosure, aligned with the ISSB IFRS S2 standard, for its portfolio. This could initially be tested for the non-sovereign portfolio, where transparency is currently slightly lower and where this reporting standard may be best suited. This would serve to enhance transparency around climate-related risks and opportunities in its portfolio.

[1] For example, as has been implemented by both the Asian Development Bank (ADB) and Inter-American Development Bank (IDB).

[2] See “Promotion of green finance” metric for further details.

[3] This commitment features both in the Bank’s current public Sustainable Finance Framework (published in 2019), and the forthcoming draft updated framework (as of 2025).