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International Financial Institutions

Aligning international financial institutions with global climate goals

The Paris Agreement on Climate Change sets out a commitment for finance flows to be made consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

More needs to be done to create coherence and align the activities of international public banks (also known as international financial institutions - IFIs) with climate goals. Achieving this will require deep financial and economic reforms. At the same time around $90 trillion in infrastructure investment will be deployed in the coming decades. The IFIs – because they are, in effect, agents of government - are key leverage points in accelerating the financial reform process.  

E3G is capturing best practices, tools and new opportunities to advance this agenda at the international and national level.  We are assessing the progress of international financial institutions, including multilateral development banks (MDBs), in aligning with global climate goals. E3G is informing the debate on the gap between aspiration and activity in meeting the goals of the Paris Agreement.  Our work aims to draw on best practices across national and multilateral development banks and institutions and provide overarching recommendations for IFI reform.

Accelerating the reform of international financial institutions requires the climate to be a higher political priority. Achieving it will require both pressure from board members to reform bank operations and governance  and  a demand-led “race to the top” driven by recipient countries, private investors and civil society demanding more coherence and ambition from the IFIs.  E3G is working to accelerate the integration of climate change into IFI activities to make them transformative drivers of increased global climate ambition by 2020.