Asian Development Bank
Founded:
1966
Mission:
‘Achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining efforts to eradicate extreme poverty.’
Total assets:
$182,381,000,000
Headquarters:
Manila, Philippines
Top five shareholders:
Japan, USA, China, India, and Australia
Summary of Paris alignment assessment
The Asian Development Bank has made some progress on alignment with the Paris Agreement and integration of climate change in all its operations. The overall commitment and direction have been set, the challenge is now to operationalise these in every aspect and level of the Bank’s work. The Bank now needs to focus on improving its non-fossil-fossil energy ratio, the bank’s fossil fuel exclusion policies, energy efficiency standards and inclusion of mitigation and adaptation in its transport, water, cities and energy strategies.
This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.
Metric | Summary |
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Paris-aligned – ADB is helping to drive green bond markets through its own issuance and its support of other issuers. It is less clear to what extent ADB is working with regulators on green finance. |
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Unaligned – For every $1 the Asian Development Bank provided to fossil fuels, $0.9 went to renewables and $0.7 went to energy networks (transmission and distribution) between 2016-2019. |
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Paris aligned – ADB’s nature based solution frameworks are aligned with the Paris Agreement. |
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Paris aligned – dedicated strategy for climate risk at project level. Climate strategy takes beyond-project approach to client resilience. |
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Some progress – ADB strategic framework is relatively advanced. The climate strategy is comprehensive and addresses mitigation and adaptation. The overarching strategy refers to the Joint MDB Paris Alignment process and elaborates how ADB could implement this. The do-no-harm principle is missing in both strategies. |
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Some progress – A majority of sectoral policies are Paris aligned and ADB has integrated the climate strategy into sectoral frameworks. However, key policies such as energy and resilient transport are not aligned yet. |
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Paris aligned – ADB has established good practice in several areas including portfolio emissions commitments, ocean health and transparency. |
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Some progress – The ADB Energy Policy prioritises modern energy access and sets a specific target, but implementation and progress updates are lacking. |
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Some progress – the importance of energy efficiency is recognised but this needs operationalising. |
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Some progress – There is a coal financing exclusion, downstream oil & gas subject to Paris alignment tests |
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Some progress – the ADB undertakes GHG accounting for the whole portfolio but no target set for GHG emissions to peak. |
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Some progress – Carbon price is close to High Level Commission on Carbon Pricing minimum. Emission threshold could be improved, and Scope 3 emissions are not included. |
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Some progress – Country Partnership Strategies include both adaptation and mitigation, as well as integration of NDC goals, but doesn’t raise ambition in line with 1.5C or 2C target. |
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Some progress – ADB is working to support implementation of Paris goals through the Nationally Determined Contributions (NDC) Advance Platform. However, it is also providing technical assistance in support of fossil fuels. |
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Some progress – Transparency of climate finance data is very good but financial intermediary lending needs improving. |
Top recommendations
- The Asian Development Bank should use the forthcoming energy policy review to set a target date for 100% of its energy lending to be to zero carbon energy projects, phasing out support for unabated fossil-related projects.
- ADB needs to make energy efficiency an infrastructure priority and should consider setting a specific energy efficiency lending target, which excludes energy efficiency improvements of fossil fuel infrastructure.
- ADB should ramp up its technical assistance to financial regulators in Asia to promote green national financing strategies for mitigation and adaptation.
Leadership area
ADB was the first MDB to set a target date to peak portfolio GHG emissions which is “2030 at the latest”. The Bank recognises that earlier peaking would be the “optimal course of action”. Other development banks, including the World Bank Group, should follow ADB’s lead on this.
Last updated: November 2020.