Public Development Banks have a critical role to play in ensuring a sustainable recovery. They are responsible for delivering $2.3 trillion in global finance annually, 10% of the global total. In order to ensure a safe climate for all, it is critical for these institutions to align their lending with the Paris Agreement on climate change.
While many of these public banks tout their climate credentials, our new, first-of-its-kind interactive tool, shows that there are currently no Multilateral Development Banks, the most famous of the public banks, that are fully aligned with the Paris Agreement, despite them having committed to do so five years ago.
The E3G Public Bank Climate Tracker Matrix
The tool identifies priority actions each bank must take to reach this status, with substantial changes required across the board to ensure these banks actively support a rapid transition. With the first-ever global summit of all public development banks, the Finance in Common Summit, taking place this week, now is the perfect time to begin holding these banks to their climate promises.
E3G’s new interactive online tool called the ‘Public Bank Climate Tracker Matrix’, uses 15 detailed metrics to assess the degree of Paris Agreement alignment each bank has achieved. In a unique combination of internal bank documents and external information sources, the Matrix provides an accessible summary of how public bank activities and policies incorporate climate change considerations.
The newly launched matrix is not the endpoint. It is designed to provide shareholders, the banks themselves and civil society with a shared understanding of how to accelerate the transformation of each bank into a climate champion.
It aims to translate the technical and obscure into a simple, easy to understand assessment. The Matrix will be regularly updated to reflect changes at each bank and expanded to include the wider ecosystem of public banks, development finance institutions and export credit agencies.
Public banks have the ability to determine the shape of the recovery from the COVID-19 crisis, and the next generation of capital investment. If public banks can lead the way in shifting financial flows to deliver the Paris Agreement, the rest of the financial system – and global economy – could well follow.
We would like to thank the following people that reviewed and gave comments on the E3G Public Bank Climate Tracker Matrix, which was authored by Sonia Dunlop, James Hawkins, Zach Malik and Johannes Schroeten.
Thanks goes to all the staff within the MDBs themselves who took the time to review this work in detail, providing detailed comments and additional information.
We would also like to thank E3G staff, including: Melissa Martin, Shane Tomlinson, Taylor Dimsdale, Alexander Reitzenstein, Lisa Fischer, Sindra Sharma, Pieter de Pous and Kate Levick. Previous authors of this research include Helena Wright, Dileimy Orozco, Iskander Erzini Vernoit and Nick Mabey – the Matrix builds on three years of their hard work including the reports Banking on Reform and Banking on Asia.
We would like to specifically acknowledge Melissa Martin’s hard work and dedication to this project over the last year.
External peer reviewers that gave comments on parts of the Matrix included Petra Kjell, RE-Course; Alex Clark, Oxford University; Emelia Holdaway, IIGCC; Heike Mainhardt, Urgewald; Paula Rolffs, GIZ; Leo Theobaldt, GIZ; Sarah Wykes, CAFOD; Sophie Fuchs, Germanwatch; Xavier Sol, Counter Balance; Ulrich Volz, SOAS and many others.
The authors are wholly responsible for all content and any errors or omissions contained therein.
E3G would like to thank KR Foundation and other E3G funders over the last three years for their valuable support for this research.