Multilateral development banks (MDBs), including the Asian Infrastructure Investment Bank (AIIB), have announced the release of their joint principles outlining how they will align future financing with the goals of the Paris Agreement.
This signifies the culmination of a five-year process to standardize and harmonize their approach.
This collective agreement among MDBs is the result of collaborative efforts that commenced when the Paris Agreement was signed. Since 2017, MDBs have committed to ensure new financial flows align with the Paris Agreement’s objectives.
The published technical papers offer explicit guidance on how new MDB financing operations must be structured to support the climate goals of the Paris Agreement. The shared Paris Alignment approach of MDBs aims to expedite and facilitate the urgent transition to a low-carbon, climate-resilient future.
It accomplishes this by helping clients develop appropriate development pathways in both the short-term and long-term that align with the Paris Agreement’s objectives.
The Paris Agreement, adopted by 196 Parties at COP21 in Paris in 2015, is a legally binding international treaty on climate change, which became effective in 2016.
In 2019, to ensure a uniform approach to implementing the Paris Alignment commitment, MDBs created a framework to align activities with Paris Agreement goals, structured around six key building blocks: alignment with mitigation goals, adaptation and climate-resilient operations, accelerated contribution to transition via climate finance, policy support and engagement, reporting, and internal activity alignment.
The framework also helped guide the AIIB’s detailed implementation of its Paris alignment commitment. Post-publication of the Joint MDB Paris Alignment Methodological Principles, MDBs will continue refining their approaches.
MDBs involved in the development and release of these principles include the African Development Bank, Asian Development Bank, AIIB, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank Group, Islamic Development Bank, New Development Bank, and the World Bank Group.
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