Standalone climate strategy and integration of climate in overarching strategy

Explanation 

Overarching strategy

ADB has fully mainstreamed climate change into its overarching strategy, and there is evidence that climate is in turn being gradually mainstreamed into its operations. The Asian Development Bank has committed to “achieve full alignment of its sovereign operations by 1 July 2023. Alignment of its non-sovereign operations will reach 85% by 1 July 2023 and 100% by 1 July 2025”. It is unclear why the remaining 15% of operations requires 2 extra years to align with the Paris agreement. 

ADB was the first MDB to implement climate finance commitments through to 2030 in its Strategy 2030, detailed in its Climate Change Operational Framework 2017–2030 (CCOF 2030). The Bank’s strategy also suggests that ADB is going to take a more proactive role on climate; this means the Bank focuses more on communicating the risks of climate change and the opportunities associated with a low carbon economy. Further resilience measures would lead to greater economic and social benefits.

The Strategy 2030 makes climate change one of the Bank’s eight operational priorities. The strategy commits the Bank to addressing climate change, building climate and disaster resilience and enhancing environmental sustainability. The Strategy states that the future operation of ADB is going to be designed to help meet the SDGs, the Paris Agreement and the Sendai Framework for Disaster Risk Reduction.

The ADB has also published its “Strategy 2030 Operational Plan for Priority 3: Tackling Climate Change, Building Climate and Disaster Resilience, and Enhancing Environmental Sustainability, 2019–2024”. This details further plans for how to deliver climate finance across the ADB and how this translates to different departments within the organisation. It explicitly outlines how ADB intends to align with the Paris Agreement, stating that:

“ADB will start monitoring and reporting on “Paris-aligned” and “non-aligned” finance flows. This will be based on assessing if projects are consistent with the different countries’ low-emissions development pathways, and if they are compatible with the overall climate change mitigation objectives of the Paris Agreement. With regards to adaptation, ADB will continue to actively manage climate change risks and identify opportunities to make ADB operations more adaptive and resilient against the impacts of climate change. Non-aligned projects can still be financed, but in those cases developing member countries should be engaged on putting in place long-term strategies and accelerate the transition to low-emissions and climate-resilient development pathways.”

The statement that non-aligned projects can still be financed could potentially undermine the overall commitment to align with the Paris Agreement – this will require further monitoring and evaluation. It should also be noted that there appears to be no date by which the ADB has committed to be fully Paris aligned in this strategy.

Climate strategy

The Asian Development Bank has committed to “achieve full alignment of its sovereign operations by 1 July 2023. Alignment of its non-sovereign operations will reach 85% by 1 July 2023 and 100% by 1 July 2025”. It is unclear why the remaining 15% of operations requires 2 extra years to align with the Paris agreement. 

The Climate Change Operational Framework 2030 is centred on five actions: supporting institutional development and policy frameworks conducive to ambitious climate action; facilitating access to public and private, domestic and international climate finance; promoting the use of climate technologies in operations; developing knowledge solutions and capacity development support; and strengthening partnerships and networks. The climate strategy emphasises the need for moving away from the traditional demand-led model, which is positive.

The framework provides a detailed implementation plan that addresses institutional challenges in the ADB and how to mainstream climate in the various departments and strategic units, as well as in employee skill development. This clearly stands out against other MDBs.

The Climate Change Operational Framework 2030 does not outline how far ADB intends to align with the Paris Agreement. The strategy also does not refer to the do-no-harm principle and looks explicitly at countries’ NDCs, rather than at ADB’s institutional role in the Paris Alignment process and delivering the overall goals of the Paris Agreement.

The

ADB has announced that it will align with the Paris agreement by 2025 (85% by July 2023).