IBRD/IDA: Overview

Founded:
1944
Mission:
"To end extreme poverty and building shared prosperity."
Total assets:
$490 billion
Headquarters:
Washington DC, USA
Top five shareholders:
USA, Japan, China, Germany and the United Kingdom
Summary of Paris alignment assessment:
The World Bank Group is making slow but steady progress towards aligning the various aspects of its operations to the Paris Agreement on climate change. As a norm setter for other MDBs, it needs to go further and faster as many development banks copy its standards. Areas it should prioritise include energy efficiency standards within IDA/IBRD which are a glaring omission and setting a greenhouse gas (GHG) reduction target. The World Bank Group also has the potential to lead the way in terms of transparency in financial intermediary sub-projects.

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.

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MetricSummary
Promotion of green financeParis aligned – The Bank is promoting green finance in banks, local and national institutions, insurers and regulators with a number of potentially transformational initiatives. 
Fossil to non-fossil energy finance ratio and scaling up climate financeUnaligned – Fossil fuel lending almost equaled renewable energy lending during 2016-18.  
Nature based solutionsSome progress – Promotion of nature based solutions and climate-smart agriculture, no commitment to net-zero deforestation. 
Climate risk, resilience, and adaptationParis aligned – Screens all projects for climate risk; climate resilience strategy includes systemic country view; relatively high levels of adaptation finance. 
Overarching climate strategySome progress – The strategy includes both mitigation and adaptation, and also acknowledges that climate is a threat to poverty reduction. Focus is now needed on implementation in all parts of the Bank’s activities, including technical assistance, and specific incorporation of Paris Agreement alignment and “do-no-harm” principle. 
Integration of climate mitigation and resilience in key sectoral strategiesSome progress – Overall there is some integration of climate mitigation and risks in the sectoral strategies. Clear references to the Paris Agreement are missing throughout the sectoral strategies. Resilience in Water and Energy sector are well addressed.  
Institutional leadershipSome progress Leadership in a number of areas such as supporting finance ministries and evidence of thought leadership. 
Energy access and fuel povertySome progress – Access to basic and modern energy is integrated into energy policy, but the Bank has no specific access target, does not specifically adhere to Multi-Tier Framework’s definition of access and progress monitoring is lacking. 
Energy efficiency strategy, standards and investmentUnaligned – Few energy efficiency standards in key sectors, with transport being the only exception. 
Fossil fuel exclusion policiesSome progress – There is near complete exclusion of coal and upstream oil and gas. 
Greenhouse gas accounting and reductionSome progress – Portfolio-level GHG tracking is in the process of being implemented but no target for peaking or reducing GHGs has been set. 
Shadow carbon pricingParis aligned – Carbon prices align with the High-level Commission on Carbon Price & Scope 3 emissions included where required.
Country level workSome progress – Climate is integrated into Country Partnership Frameworks and there is potential for decarbonisation pathway development, but no mention of proactive NDC ambition raising. 
Technical assistance for implementing Paris goalsSome progress – World Bank Group manages the NDC Support Facility Trust Fund, which also supports the NDC Partnership. However, the Bank uses technical assistance to support fossil fuel sectors. 
Transparency of climate finance dataSome progress – Transparency of financial intermediary lending needs improving. 

Recommendations

  • The World Bank Group should disclose more detailed information on sub-projects financed by financial intermediaries (particularly at IFC) and introduce due diligence to ensure that intermediaries are not investing in areas the World Bank has excluded e.g. coal and upstream oil and gas. WBG should also work with intermediaries on decarbonisation plans. 
  • WBG should extend fossil fuel exclusion policies to oil and gas at all stages of the value chain.
  • WBG should look to the experience of the other MDBs and how they incorporate the Avoid-Shift-Improve framework into their transport lending.  

Leadership area

The World Bank’s leads in technical assistance to implement NDCs. Managed by the Bank, the NDC Support Facility Trust supports the NDC Partnership, an international initiative to support action on the NDCs which is backed by various MDBs, including ADB, and many country participants. This is an example of real global leadership from the World Bank on this issue. Furthermore, the Climate Action Enhancement Package, a new offering of the NDC Partnership, has a goal of enhancing NDC ambition as well as implementation. 

Last updated: November 2020.

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