Standalone climate strategy and integration of climate in overarching strategy

Explanation

Overarching strategy

The EIB Group Strategic Roadmap 2024–2027 closely links the EIB’s actions with the strategic objectives of the European Union. Climate action is the first of eight policy priorities enumerated, labelled as “the number 1 strategic priority of our time”. As a self-described “climate bank”, the EIB’s overarching strategy is therefore particularly interrelated with its approach to climate change (covered in detail under “standalone climate strategy” below).

The EIB’s overarching Strategic Roadmap is complemented by the rolling three-year EIB Group Operational Plan 2024–2026. This is updated annually, with the current version presenting EIB’s targets for 2024 and orientation for 2025–2026. Climate action is well integrated as one of two transversal objectives. Furthermore, the EIB reiterates its role in achieving the European Green Deal’s vision, and commits to providing financing to support the EU in achieving its 2030 energy, climate, and environmental targets. Embedding the EIB overarching strategy within the European Green Deal’s decarbonisation objectives, including net zero by 2050, entails aligning its work with “deep decarbonisation” pathways in the EU. The Operational Plan also highlights the Bank’s support to the RePowerEU+ programme, with a strong focus on the links between climate action and EU energy security objectives. It is important to highlight that despite the challenging energy security issues caused by the Russian invasion of Ukraine the EIB upheld its commitment to not finance fossil fuels.

The EIB’s overarching strategy also reaffirms that it will continue to support countries outside the EU to deliver on their environmental sustainability goals. EIB Global, the EIB arm for extra-EU financing established in 2022, notably released the EIB Global Strategic Roadmap in 2023, in which it affirms the ambition to increase financing and technical assistance operations outside the EU. This engagement is centred around the thematic objectives of the EU’s external action strategy, and in particular the EU’s Global Gateway and Green Deal. Specific priorities for action are identified according to different geographies, which is welcome considering the different climate-related issues faced across regions. For instance, in Sub-Saharan Africa, EIB Global will focus operations on enhancing climate resilience and poverty reduction in least developed countries (LDCs) and fragile states.

The EIB has applied the same climate-related targets to EIB Global’s operations as for the wider Group. These notably include:

• Investments in climate action and environmental sustainability exceeding 50% of annual lending by 2025.
• 15% of climate action for adaptation by 2025.
• Alignment of all new operations with the principles and goals of the Paris Agreement.

EIB Global is due to publish a proposal during the review of the CBR in 2025 regarding how these targets will be achieved. Notably, adaptation is already well integrated within the strategy, with EIB Global adopting a focus on building climate resilience. The strategy also outlines how EIB Global will integrate concepts of just transition and resilience in its approach, complemented by a standalone strategy document on its approach to these issues. Notably, EIB Global also commits to making its climate finance nature positive and increasing investments in both nature based solutions and those with biodiversity co-benefits.

While references to climate mitigation are present in the EIB Global Strategic Roadmap, they remain limited, lacking associated indicators. As a result, it is not clear if and how deep decarbonisation objectives are integrated throughout the EIB’s strategy and activities outside the EU. Notably, references to “partner countries’ NDCs” are insufficient to ensure this, given the evidence that the sum of current NDCs falls short of aligning with a 1.5 °C scenario. This would benefit from clarification in the proposed adoption of EIB Global targets in the CBR’s review.

As part of its global engagement, the EIB hopes to strengthen cooperation and partnerships, not only with European partners but also with other multilateral agencies, PDBs and civil society, to scale up deployment of climate finance globally and contribute to reform of the international financial architecture. While commendable, the Bank does not provide a clear and comprehensive strategy for how it intends to engage with the broader multilateral, PDB and civil society ecosystem for this purpose.

Standalone climate strategy

The EIB has three core climate strategies in place: the 2020 EIB Climate Strategy, the EIB Climate Bank Roadmap 2021–2025 and the EIB Climate Adaptation Plan.

EIB Climate Strategy

The EIB Climate Strategy, originally published in 2015, provides the overarching medium to long-term guide to the Bank actions’ within and outside the EU, to reinforce EIB finance for projects which bear a positive climate impact. It was last updated in 2020 following the decision in 2019 by the Bank board’s to make new pledges towards climate and environmental action and the latest developments in European climate policy, most prominently the European Green Deal. This includes the EU’s ambition to become the first world region to become climate neutral by 2050, and the ensuing need for the EIB to raise climate and environment commitments as the EU’s financing arm. The Climate Strategy thereby sets the Bank’s mission “to play a leading role amongst financial institutions in supporting the finance needed to achieve the worldwide commitments to limit global warming to 1.5˚C, to increase the ability to adapt to the adverse impacts of climate change, and for the EU to become climate neutral by 2050.”

The new commitments derived from the 2019 EIB Board decision include:

1.  The decision by the EIB to increase the level of support for climate action and environmental sustainability to exceed 50% of its annual lending by 2025. To achieve this strong target, the EIB will aim to leverage up to EUR 1 trillion of climate action and environmentally sustainable investments between 2021 and 2030. The criteria as to what constitutes “climate action” and “environmental sustainability” projects are laid out in the Climate action lending eligibility list.
2. Paris alignment of all financing activities. While the Strategy states this is intended to be in place by end-2020, the longstop date for Board approval of any non‐aligned operations was set at the end of 2022 due to the lag between initial appraisal and final presentation.

The Climate Strategy identifies three strategic areas where it intends to focus its climate action:

1. Reinforcing the impact of climate financing. Beyond the target of at least 50% of climate action and environmental sustainability finance among its overall lending, the EIB commits to maximise effectiveness of climate finance by expanding the pipeline of climate projects, developing innovative financing solutions, and further developing the green bond market.
2. Building resilience to climate change. The EIB aims to reinforce resilience of its projects through risk screening, knowledge building and awareness building within and outside the Bank. It also aims to strengthen support to specific adaptation investment activities and access to financing of adaptation projects.
3. Integrating climate change considerations across all EIB standards, methods and processes. The EIB commits to continuous improvements to mainstreaming tools adopted within the Bank, and to a leadership role in harmonising standards within the public development banks ecosystem.

EIB Climate Bank Roadmap 2021–2025

The EIB published its Climate Bank Roadmap (CBR) 2021–2025 in 2020 as the implementation framework of the EIB Climate Strategy and thereby for the alignment of the EIB Group’s activities with the European Green Deal.  As a result, the roadmap is explicitly aligned with the 1.5 °C target. To ensure this, the EIB based the development of necessary tools and thresholds for the roadmap on the IPCC Special Report on Global Warming of 1.5 °C.

The CBR is centered around the targets adopted by the Bank’s board in 2019 (detailed above), namely the increase of level of support to climate action and environmental sustainability (CAES) projects to at least 50% of overall lending and support to EUR 1 trillion of CAES investments by 2025, and Paris alignment of all Bank activities by end-2020. The CBR establishes reference points from which the EIB’s approach to these targets are developed. Most notably these include the EU Taxonomy and the Joint MDB approach, which continuously feeds into the EIB’s approach to low-carbon alignment.

Following the EU Taxonomy, the Bank must ensure all its activities comply with the “do no significant harm” (DNSH) principle. While the CBR states the DNSH principle will serve as a floor across all operations and, where justified, stricter standards may be set, the circumstances and criteria under which this would be the case are not made clear.

Considering the Bank’s standing as the largest climate action financier in the world, there is a need to more systematically go beyond mitigating the worst impacts of climate change and shift towards climate positive investments throughout the EIB’s operations. The EIB should therefore strive to go beyond its current application of the DNSH principle as a floor and apply a “do good beyond no harm” principle throughout its operations – a principle the Intra-American Development Bank (IDB), for instance, has adopted as part of its Environmental and Social Policy Framework.

Based on these reference points, the EIB structures its action around four main workstreams to achieve the CBR’s vision:

1. Accelerating the transition through green finance.
2. Ensuring a just transition for all.
3. Supporting Paris aligned operations.
4. Building strategic coherence and accountability.

Commitments to accelerating the transition through green finance include increased investments in adaptation efforts, innovative technologies and capital-intensive green infrastructure, as well as a focus on aggregation scalability and replicability of investments. These actions will be pursued both inside and outside the EU. They are to be based on dialogues with national actors and consultation with national development plans – including National Energy and Climate Plans and Recovery and Resilience Plans within the EU, and NDCs, National Adaptation Plans and Long-Term Strategies outside the EU.

On ensuring a just transition for all, the EIB pledges that no people or places are left behind, linking its climate action with social development. The EIB commits to playing a significant role in the EU’s Just Transition Mechanism through its InvestEU instrument, expected to mobilise investments of EUR 10–15 billion. While the CBR provides limited specifics on how this vision will be achieved outside the EU, it identifies key areas of focus such as transport, energy access, and advisory services. Moreover, the EIB Global Strategic Roadmap emphasises just transition and resilience and offers additional insights (though it lacks concrete targets and indicators). This has included the adoption of a dedicated strategy on just transition and just resilience.

The CBR also contains a chapter covering the Paris alignment of all EIB operations, setting out the Bank’s intent to align with low-carbon climate-resilient pathways. A comprehensive alignment framework is provided that includes low-carbon and climate-resilient development screening frameworks. Further notable aspects include the strengthening of Environmental and Social Standards, risk management systems being in place for all operations, and a shadow carbon price based on a 1.5 °C scenario. Specific sectoral approaches are also included, such as the phase-out of fossil fuel financing by the end of 2021.[1] The document integrates both deep decarbonisation and systemic resilience. The CBR thus represents best practice among the MDBs.

Finally, commitments with regard to strategic coherence and accountability include the grounding of all EIB activities in prevailing sustainable finance approaches. This includes alignment with the EU Taxonomy and the DNSH principle, as well as support for the development of the EU’s sustainable finance framework. Furthermore, transparency and accountability will be increased through enhancement of disclosures, including TCFD reporting, the establishment of a results framework for the CBR, and increased outreach and partnerships. This coherence between the EIB’s green and sustainable finance policy work and its financial commitments is highly welcome as it can lead to a catalytic effect.

EIB Climate Adaptation Plan

The EIB Climate Adaptation Plan, published in 2021, builds on the EU Climate Adaptation Strategy. Developing a dedicated climate adaptation strategy marks another area of leadership by the EIB, as this is not something which peer institutions have established to date. The document is centred around the EIB’s commitment to increase the share of climate financing for adaptation to 15% by 2025, and the development of indicators to ensure that its adaptation finance creates impact. While the adaptation finance target is a step in the right direction, it notably remains the lowest proportional target among MDBs and is significantly short of financing needs within the EU and elsewhere.[3]

Implementation progress assessment

According to the EIB Sustainability Report 2023, the EIB is ahead of its pledges in terms of green (climate action and environmental sustainability) lending, having recorded EUR 44.3 billion in 2023, representing 60% of lending (up from 30% in 2019). The EIB has supported a total of EUR 354 billion in total green investments over 2021–2023. This is highly encouraging, and in line with the established target of EUR 1 trillion over the period 2021–2030. However, adaptation finance lending remains low, at 6.4% of EIB climate action finance in 2023, despite absolute amounts increasing by 40% from 2021.

The EIB’s 2023 Energy overview report affirms that its target to phase out all fossil fuel financing by the end of 2021 has been achieved. This has been corroborated by stakeholders who have not identified any fossil fuel investments by the Bank since 2022.

The EIB’s work to align its operations with the Paris agreement and the EU Taxonomy is also well underway. On the latter, there were only 12% out-of-scope investments in 2022, and 100% of Climate Awareness Bond allocations are aligned with the logic of the EU Taxonomy. In April 2025, the EIB undertook its first green bond issuance aligned with the European Green Bond Standard, the first supranational institution to do so. This progress has been supported by the revision of the EIB Environmental and Social Standards in 2022, which fully integrates the EU Taxonomy and “do no significant harm” principle. Moreover, the comprehensive climate and transition risk assessment framework is complemented by the implementation of a shadow carbon price consistent with a 1.5 °C scenario and the PATH framework for counterparty alignment.[4]

Transparency commitments have also been maintained. The EIB publishes annual progress reports for the CBR, the first of which introduced a formal results framework to demonstrate how commitments deliver tangible impact. The mid-term review of the CBR reaffirms targets, reviews progress to date, and details an outlook for 2025. It also introduces some new commitments, such as the welcome expansion of the exclusion list to all LNG and other fossil-fuel-driven vessels.

The EIB has therefore shown strong evidence of a transformational implementation of the EU Climate Bank Roadmap. The review of the CBR (which will cover the 2026–2030 period) will be an important litmus test for how the EIB doubles down on its commitments and plans to build on its ambition to date.

Recommendations: 

• Considering the escalation of the global climate crisis, public financing should not only systematically prevent harm to climate objectives but be actively climate positive. Given the role of the EIB as the largest climate financier in the world within the PDB system, the Bank should go beyond the “do no significant harm” principle and consider mainstreaming the stronger “do good beyond no harm” principle across its operations, as adopted by IDB for instance.
• The review of the Climate Bank Roadmap should develop a coherent strategy, with clear, time-bound targets and indicators, for how the EIB intends to deepen its engagement with the broader PDB ecosystem over the coming years. With systemic objectives requiring collective action and joint collaboration between international financial institutions, the EIB should consider establishing internal targets to incentivise collaboration (such as on co-financing, on-lending, and partnerships).

[1] For instance, the Asian Development Bank (ADB) has adopted a target for 75% of overall operations to support climate change mitigation and adaptation by 2030.

[2] For more information, see the “Integration of climate in key sectoral strategies” metric.

[3] For more information, see the “Climate risk, resilience and adaptation metric.

[4] For further details, see the “Climate risk, resilience, and adaptation” metric.