Publications

This study takes stock on the experience of some twenty countries and several international development institutions in Environmental Budget Tagging. It identifies the expected benefits and the conditions to achieve them : take into account the measures that are unfavorable to the environment, consider the outcomes of assessed measures and not only their intention, repeat the exercise over time and fit it into the existing administrative culture and processes…

As the main financier of the French and European economies, banks play a key role in financing the transition. Their current contribution in France is in the order of 8 billion euros per year, but this will need to more than double according to estimates by I4CE. To accelerate this shift for banking institutions and to prevent their increasing exposures to climate risks, the debate has tended to revolve around whether or not there is a need to reform prudential requirements.

A core goal of the Paris Agreement is “make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” Since 2015, financial institutions of all types – from development banks to asset owners and pension funds – have committed to making their portfolios ‘consistent’ with the Paris Agreement. In practice, Financial Institutions are at times approaching alignment from different points of entry: either focusing on one hand “what” or on the other hand “who” is financed.

Today, all eyes are on the forthcoming 2021-2025 Climate Action Plan of the World Bank Group as a proxy for what the development finance community’s ambition for COP26 in Glasgow.The Climate Action Plans of Development Banks up until 2020 have been structured around climate finance commitments focusing on increasing their support for climate-specific activities. However, following up on their commitments to “Align with the Paris Agreement”, these institutions need to develop post 2020 strategies and actions plans, which go a step further to meet the level of ambition of the Paris Agreement objectives.

In 2017, the International Development Finance Club (IDFC) together with the group of Multilateral Development Banks (MDBs) made a joint commitment to “align financial flows with the Paris Agreement”. Since its commitment, the IDFC had focused its efforts on identifying what alignment means and implies.

The government has recently modified the environmental, social and governance disclosure obligations for French investors via the publication of an implementing decree which specifies regulator expectations. Romain Hubert of the Institute for Climate Economics explains why this decree was to be expected and necessary for climate reporting.

In 2015, France pioneered requirements for climate-related disclosure from financial institutions, asking them to explain their strategy for integrating climate-related risks and for contributing to the achievement of the Paris Agreement objectives and the French national low-carbon strategy. Three years of implementation yielded mixed results and requirements are in the course of being updated in […]

Yesterday sees the release of the data on project financing from the nine major Multilateral Development Banks on the Energy Policy Tracker – of which I4CE is partner – and a new Big Shift Global briefing, showing that, since the beginning of the pandemic, the Banks provided at least $12 billion to clean energy and $3 billion for fossil fuels.

Some of the heat waves and wildfires that were experienced in Europe and in the world in the summer of 2019 are symptoms of a climate that is already changing. These events may cause losses for banks and other financial institutions, which will therefore have to integrate climate change into their decisions. Regulators are also pushing in this direction.

While the financial consequences of climate impacts are already materializing, the regulators are implementing their agenda of actions to stimulate financial institutions into analyzing and managing their exposure to “physical climate risks”, and disclosing how they do so as recommended by the TCFD. How can financial actors make quick and efficient progress on analyzing and […]

In this op-ed published in a French economic newspaper, Benoit Leguet, director of I4CE, considers that the French Government must plan over the long term the necessary financing for climate change mitigation and adaptation, by instituting a public finance programming law for climate. France has set itself climate objectives, it must clarify what means it will devote to them.

Climate Action and Sustainable Development are two parts of the same challenge and must be addressed together. Both adopted in 2015, the Paris Agreement and the 2030 Agenda for Sustainable Development frame a set of global objectives that are deeply connected.

Ian Cochran and Alice Pauthier explain why even with COVID19, public financial institutions (PFIs) must continue their important work on aligning their activities with climate and sustainability goals – and how their progress may be key to ensuring that the response to the crisis is both just and green.

Public development banks have a major role to play in the fight against climate change. Ian Cochran and Alice Pauthier from I4CE explain in this blogpost the principal technical and political challenges those finance institutions will need to overcome in aligning with the Paris Agreement objectives.

Aligning with the Paris Agreement: what does it mean for the International Development Finance Club?   International Development Finance Club Pavilion Saturday 7 December, 2-3:30 pm   The Paris Agreement has reframed climate action from a focus on the near-term incremental increase of adaptation and mitigation actions to emphasize the importance of the long-term transformation […]

On 25 October, a conference was held in Paris to “replenish” the resources of the Green Climate Fund. 27 countries have made pledges, for a total amount of nearly $10 billion. Good news? Insufficient? For Alice Pauthier of [i4ce], the impact of the Green Climate Fund should not only be assessed against this figure. The Fund also has a transformational effect, particularly on the many financial institutions that, in order to access its resources, must follow an accreditation process. A process that may well become more and more demanding.

  It therefore brings risks and opportunities for economic actors, which they must anticipate in order to optimise their strategy in a context of uncertainty. Against this backdrop, the use of scenarios – which are plausible representations of uncertain future states – is very useful in order to better understand the medium- and long-term challenges […]

It is no easy task to take climate risks – transition risks and physical risks – into account in financial management practices. As this note shows from the example of banking activities, the intrinsic characteristics of these risks – which are long-term and cannot be assigned a probability and for which there are no historical […]

In September 2019 in New York City, the UN Secretary General Antonio Guterres convened a “United Nations Climate Action Summit” to increase the ambition and momentum of global climate action. While the outcomes of the Summit itself – particularly from country Parties – are seen as deeply disappointing, there are nevertheless a number of ‘silver linings’ to keep in mind on the road to Santiago. Alice Pauthier and Ian Cochran share four key ideas to focus efforts moving forward.

I4CE has just released a “framework for Alignment with the Paris Agreement”, Ian Cochran discusses here what “Alignment” simply means.