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

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
Promotion of green finance	Transformational: The ADB has established itself as a leading force in catalysing green and climate finance in Asia and the Pacific, grounded in its own commitment to deliver more than USD 100 billion climate finance for the period 2019 – 2030. The Bank is actively greening the financial system through initiatives such as theASEAN Catalytic Green Finance Facility and supporting regional green bond issuances (as part of its own successful green bond program that has raised USD 10 billion since 2015). Additionally, the ADB has developed innovative financial instruments such as the IF-CAP, Climate Action Catalyst Fund, and Blue Bond Incubator to expand its lending capacity and leverage resources for climate financing in the region.
Fossil to non-fossil energy finance ratio and scaling up climate finance	Some progress: In the fiscal period 2019 – 2022, for every USD 1 the ADB provided to fossil fuels, USD 4 went to clean energy, USD 4.86 went to transmission and distribution (that cannot be attributed to any one energy type) and USD 2.33 went to other energy projects (which can but does not necessarily include projects such as mixed energy or biomass, among others). The year-on-year trend for ADB’s ratio of clean energy to fossil fuel finance is promising, with the aggregated figures showing clear improvement relative to the preceding three-year fiscal period 2015 – 2018. While climate finance as a percentage of total operations previously increased more slowly (and inconsistently) than at peer institutions, the Bank has recently ratcheted up its contributions, reaching 56.3% of total commitments in 2024.
Nature based solutions	Some progress: The ADB’s Environment Action Plan 2024–2030 represents a comprehensive strategic framework for guiding an integrated approach to nature based solutions, biodiversity and ecosystem management, and pollution control and circular economy. Beyond this dedicated document, the ADB recognises nature based solutions (NBS) as a valuable area for action in both its Strategy 2030 and Climate Change Action Plan 2023–2030. Accordingly, the Bank has recently increased its efforts to scale up NBS finance, notably through the Nature Solutions Finance Hub, and increasing its associated technical assistance offer. Nonetheless, the Bank has yet to commit to any targets related to the elimination of commodity-driven deforestation.
Climate risk, resilience, and adaptation	Paris aligned: The ADB has established several mechanisms for climate risk management across all projects, including its Environmental and Social Framework, Climate Risk Management Framework, and sector-specific guidelines. The Bank has also actively supported enhancing client climate resilience by conducting country and regional level risk assessments and developing dedicated technical guidance materials at the project level. The ADB has recently increased its adaptation finance levels to USD 4.9 billion, equivalent to 40% of its total climate finance disbursements.
Overarching climate strategy	Some progress: The ADB has developed a comprehensive strategic framework for climate action, including the dedicated Climate Change Action Plan 2023–2030, and overarching Strategy 2030 (along with its midterm review). Collectively, these aim to position ADB as “The Climate Bank of Asia and the Pacific” and guide its climate action efforts through ambitious financing commitments, Paris Agreement alignment, and enhanced monitoring frameworks. These strategies reflect strong ambition, but there is room for improvement to credibly guarantee the fulfilment of the ADB’s climate ambition. This includes lacking explicit “do no harm” principles, explicitly allowing non-Paris aligned projects to be funded, and insufficient public targets for key climate metrics.
Integration of climate mitigation and resilience in key sectoral strategies	Some progress: The ADB has published directional guides on how the Bank’s key sectors will contribute to its Strategy 2030 and its seven operational plans. The ADB’s subsequent Climate Change Action Plan (CCAP) 2023–2030 is also informed by and aligned with the sector directional guides. Across these directional guides, the ADB emphasises Paris Agreement alignment, support for NDCs, integration of mitigation and adaptation measures, and promotion of low-carbon practices. However, the depth and specificity with which these topics are integrated in the Bank’s strategic approach varies between sectors. Moreover, while the Bank has developed fully-fledged sectoral policy documents (as opposed to short- to medium-term directional guides) for certain sectors (such as the energy and urban development sectors), the agriculture sector doesn’t yet have a directional guide.
Institutional leadership	Paris aligned: The ADB leads by example in several areas of climate mainstreaming, including portfolio emissions commitments, climate finance transparency, and the use of innovative financial instruments. In the latter case, the Bank has developed pioneering initiatives such as the Energy Transition Mechanism, a market-based approach to retiring fossil fuel assets ahead of schedule, and IF-CAP, a guarantee platform for unlocking climate finance. In addition to its efforts to lead by example, the ADB has actively sought to share its leading experience (such as on results-based financing) with other institutions. To become a transformational institutional leader, there remains scope for the ADB to strengthen the implementation framework for its Paris alignment commitment. For example, the Bank has yet to publish its own internal Paris alignment methodology, and associated reporting of Paris aligned projects. Moreover, to truly become the “Climate Bank of Asia and the Pacific”, the Bank should increase its efforts to disseminate its own learnings and facilitate knowledge exchange on climate mainstreaming practices, particularly among regional financial institutions.
Energy access and fuel poverty	Some progress: Energy access is stated as a priority in the ADB’s 2021 Energy Policy, and the Bank is involved in several targeted initiatives to this end (including the Asia–Pacific Hub of the SE4ALL initiative). Despite this, the ADB lacks a clearly defined minimum definition of access applied across its operations and does not have clear targets beyond the goal of “energy access for all”. Moreover, the Bank lacks a monitoring and reporting framework for tracking the contribution of its operations to energy access, making it difficult to assess progress.
Energy efficiency strategy, standards and investment	Some progress: Energy efficiency is presented as a priority area within the ADB’s Climate Change Action Plan 2023–2030 & 2021 Energy Policy. However, the ADB has not explicitly adopted an “energy efficiency first principle”. At the sectoral level, the ADB has followed best practice in adopting the “Avoid–Shift–Improve” framework to guide transport sector operations. However, its stated prioritisation of energy efficiency remains insufficiently operationalised in the building sector. The Bank has not clearly established minimum standards for efficiency in either the transport or buildings sector, meaning that intermediated operations similarly lack benchmarks to verify and guide efficiency improvements.
Fossil fuel exclusion policies	Some progress: The ADB excludes direct investment in new coal, as well as activities that might extend the lifetime of existing assets. The Bank is also actively promoting the early retirement of coal plants through the Energy Transition Mechanism. Upstream oil and gas are both fully excluded. However, downstream oil and both mid- and downstream gas projects are permitted to be supported, albeit in a “selective” manner and subject to restrictive conditions intended to verify the viability of renewable alternatives and avoid risks of carbon lock-in. The ADB screens all supply-side energy efficiency projects for the risk of contributing to lock-in of emissive stranded assets as part of applying the Joint MDB Paris Alignment Methodology. However, there is no evidence of any specific dedicated standards or exclusions on supply-side fossil energy efficiency projects.
Greenhouse gas accounting and reduction	Some progress: The ADB requires GHG accounting for all projects expected to produce or currently producing above a threshold of 20 ktCO₂e/year. At the portfolio level, the Bank had previously committed to peaking emissions by 2030 at the latest, but this target has since been dropped. From 2025, the ADB will disclose net annual emissions as the sole portfolio-level emissions indicator. The Bank previously tracked and reported total annual GHG emissions reduction as part of its Corporate Results Framework, reporting 50.2 million tCO₂e avoided in 2024, continuing an overall upward trend in emissions reductions over the last five years.
Shadow carbon pricing	Some progress: The ADB applies a social cost of carbon assessment to all projects in the energy and transport sectors, as well as projects with a primary objective of GHG emissions mitigation. The Bank bases its price level on mean social costs of carbon reported in the Intergovernmental Panel on Climate Change’s (IPCC) Fifth Assessment Report (to be increased 2% annually in real terms), resulting in a price level consistent with (but at the lower end of) the price range recommended by the High-Level Commission on Carbon Prices (HLCCP). Where its use is mandated, the social cost of carbon is to be applied to inform a given project’s economic internal rate of return (EIRR), calculated with reference to a “without project” scenario, and used as a binding requirement for investment decisions. Options to augment the Bank’s use of this tool include deploying it more consistently in analysis of least cost options and project alternatives, considering how the tool could be tailored to context while maintaining alignment with the Paris goals, and expanding the scope of its use on the basis of establishing dedicated emissions accounting guidelines for additional sectors.
Country level work	Paris aligned: The ADB’s strategic approach at the country level is driven by comprehensive Country Partnership Strategies (CPSs) and the integration of a country level approach to climate considerations in the Bank’s core strategic documents. Beyond this, the Bank has developed tools such as Climate Risk Country Profiles and multi-hazard climate assessments to support the integration of climate considerations in national level planning and policymaking.
Technical assistance for implementing Paris goals	Paris aligned: The ADB provides extensive climate-related technical assistance at both the policy and project levels to support the implementation of Paris Agreement goals. Policy level examples include the Bank’s NDC Advance Platform, the Asia Pacific Tax Hub for climate action, and support for fossil fuel subsidy reform. At the project level, ADB Ventures provides technical and financial support to climate-focused startups. Beyond its ongoing support for NDC implementation, the Bank is also supporting several countries with preparation of their NDC 3.0, including enhanced mitigation target setting, and could look to further scale up such efforts to enhance ambition among a wider set of DMCs.
Transparency of climate finance data	Some progress: The ADB has made some progress on climate finance transparency, publishing detailed project level data annually and implementing transparency improvements as part of its Environmental and Social Framework. Consequently, it was ranked 1st (sovereign) and 3rd (non-sovereign) in the 2023 DFI Transparency Index. However, there remains room for improvement regarding disclosure of sub-investments through financial intermediaries. Moreover, concerns have been raised regarding potential overreporting of adaptation finance.