International Finance Corporation (World Bank Group)

Founded:

1956

Mission:

"To end extreme poverty and promote shared prosperity."

Total assets:

$96 billion

Headquarters:

Washington DC, USA

Top five shareholders:

USA, Japan, Germany, United Kingdom and France.

Summary of Paris alignment assessment:

The International Finance Corporation (IFC), the World Bank Group's private sector lending arm, 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 carbon pricing and fossil fuel exclusions. The IFC 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.

Metric	Summary
Promotion of green finance	Paris-aligned – IFC has an active green bond programme and is a leader in the larger green finance discourse.
Fossil to non-fossil energy finance ratio and scaling up climate finance	Unaligned – fossil fuel lending is remains high.
Nature based solutions	Some progress – World Bank Group as a whole has promoted nature based solutions and climate-smart agriculture, but no commitment to net-zero deforestation.
Climate risk, resilience, and adaptation	Some progress – IFC is developing project-level climate risk management processes; intention to grow adaptation finance.
Overarching climate strategy	Some progress – IFC has a comprehensive Climate Implementation Plan that addresses both mitigation and adaptation. The overarching strategy provides relatively little detail on climate action.
Integration of climate mitigation and resilience in key sectoral strategies	Some progress – Overall for the World Bank Group 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 leadership	Some progress – Leadership in a number of areas such as supporting finance ministries and evidence of thought leadership.
Energy access and fuel poverty	Some progress – World Bank Group has integrated access to basic and modern energy into energy policy, but the Bank has no specific access target, does not specifically adhere to Multi-Tier Framework definition of access and progress monitoring is lacking.
Energy efficiency strategy, standards and investment	Some progress – IFC has good energy efficiency standards for buildings and financial intermediaries, but few standards in other sectors. (Note that the rest of the World Bank is not performing as well.)
Fossil fuel exclusion policies	Some progress – There is near complete exclusion of coal and upstream oil and gas across the World Bank Group.
Greenhouse gas accounting and reduction	Some progress – IFC has good GHG accounting standards.
Shadow carbon pricing	Some progress – IFC should provide further clarification on how it currently applies carbon pricing.
Country level work	Some progress – Climate is integrated into World Bank Group Country Partnership Frameworks and there is potential for decarbonisation pathway development, but no mention of proactive NDC ambition raising.
Technical assistance for implementing Paris goals	Not applicable
Transparency of climate finance data	Unaligned – IFC has not submitted information to the OECD. Also, financial intermediary lending transparency needs improving.