Inter-American Development Bank
"To improve lives in Latin America and the Caribbean through financial and technical support for countries working to reduce poverty and inequality, we help improve health and education, and advance infrastructure. Our aim is to achieve development in a sustainable, climate-friendly way."
Washington DC, USA
Top five shareholders:
USA, Brazil, Argentina, Mexico, Canada, Japan
Summary of Paris alignment assessment:
The Inter-American Development Bank is not yet Paris aligned. It is, however, showing outstanding leadership in areas related to partnership and support for countries, especially in the metrics 'country engagement', 'technical assistance' and 'promotion of green finance'. The Bank has put in place several strategic frameworks that integrate climate change deeply into its lending operations. The IDB misses a clear timeline to become fully Paris aligned and should strengthen its carbon pricing. Areas that IDB needs to improve on are support for energy access and energy efficiency. Unless otherwise stated, IDB refers to the Inter-American Development Bank Group, which includes IDB Invest, the Group's private-sector arm.
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.
|Promotion of green finance||Transformational – The Bank has led the development of a green bond market and worked to connect climate risk and the financial sector throughout the region.|
|Fossil to non-fossil energy finance ratio and scaling up climate finance||Some progress – Between 2016-19 for every $1 the Inter-American Development Bank (IDB) provided to fossil fuels, $7.1 went to renewables and $3.5 went to energy networks (T&D – transmission and distribution). This is one of the highest and best ratios amongst the MDBs.|
|Nature based solutions||Some progress – Extensive promotion of nature based solutions; relatively weak commitments on forestry.|
|Climate risk, resilience, and adaptation||Some progress – Climate risk screening fully integrated within project appraisal project, plus identification of adaptation needs. However there is little evidence to support client climate resilience.|
|Overarching climate strategy||Some progress – Climate is well integrated into the Inter-American Development Bank’s (IDB) climate and overarching strategies. The Climate Change Action Plan is integrated into the joint MDB Paris alignment process. However, the bank misses a clear strategic vision to complete Paris alignment.|
|Integration of climate mitigation and resilience in key sectoral strategies||Paris aligned – Mitigation and adaptation are well integrated into all IDB sectoral frameworks, and in a balanced way. The sectoral Climate Change Framework ensures the cross-cutting integration of climate into all sectors and the link to the Paris Agreement is clearly established throughout all sector policies.|
|Institutional leadership||Paris aligned – Leadership in sustainable infrastructure, NDC support and policy-based loans.|
|Energy access and fuel poverty||Some progress – Bank-specific goal has been set and initiative has been demonstrated, but monitoring and progress are lacking.|
|Energy efficiency strategy, standards and investment||Not aligned – Very few energy efficiency standards, with transport being the only exception.|
|Fossil fuel exclusion policies||Some progress – Exclusion of coal and upstream oil and gas only.|
|Greenhouse gas accounting and reduction||Some progress- The IDB covers a wide range of sectors with its GHG tracking but has no absolute emissions target for its GHG.|
|Shadow carbon pricing||Some progress – Shadow carbon price not consistently applied – but does use High-Level Commission price ranges.|
|Country level work||Transformational – Country Strategy papers integrate climate mitigation and adaptation as well as ambitious NDC goals. The Bank proactively seeks deep decarbonisation through a comprehensive approach to Long Term Strategies.|
|Technical assistance for implementing Paris goals||Transformational – The Bank encourages the implementation and revision of Nationally Determined Contributions (NDCs) within the Paris Agreement amongst the countries in its region.|
|Transparency of climate finance data||Some progress – Transparency of climate finance data is very good but financial intermediary lending needs improving.|
- IDB should set a target date to become fully Paris Aligned. This should include a clear timeline with milestones to be achieved as well as a commitment to the do-no-harm principle of the Paris Agreement.
- The IDB should update its framework on energy access. Specifically, a process for monitoring and reporting on progress are missing.
- Strengthen fossil fuel exclusion. The IDB has committed to no longer invest in coal and upstream oil and gas. However, it should also set a date for a full-scale exclusion of all fossil investments.
- The IDB should significantly improve its energy efficiency lending. The Bank has established few energy efficiency standards in relevant sectors such as buildings, and needs to raise these beyond national standards.
IDB is a leader in integrating climate change into country-level strategies.
Last updated: November 2020.