THE EUROPEAN Bank for Reconstruction and Development (EBRD) has unveiled its plan to scale up even further its climate and environmental finance and its work supporting ‘a green, low-carbon and resilient future.’
Already at the forefront of climate and environmental action, the EBRD is now considering a goal of devoting over 50 per cent of its annual investments to the green economy by 2025.
In addition to the aim of making more than 50 per cent of its financing green, the plan would target specific emission reductions over the next five years and set a date for a decision on when all the EBRD’s projects are aligned to the Paris Climate Agreement.
The Bank’s Board of Directors approved the new Green Economy Transition plan at its meeting on 8 July.
This plan forms part of the EBRD’s overall strategy for the next five years and will become effective with this strategy, due for approval by shareholders at the Bank’s Annual Meeting, scheduled for 7-8 October.
The plan to become a majority green bank by 2025 builds on success in the past five years, during which the average green finance ratio rose to 40 from 25 per cent.
The EBRD launched its Green Economy Transition (GET) approach in 2015 in the run-up to the Paris climate talks at the end of that year.
The scaled-up approach (GET 2.1) defines clear action areas to support a green economic recovery in its regions of operations taking account of the impact of the coronavirus pandemic.
Under GET 2.1, the EBRD would also step up policy work to ensure its 38 emerging economies can effectively achieve climate and environmental goals.
It would scale up investment by innovating across a set of specific environmental and climate mitigation and adaptation thematic areas such as greening the financial sector and energy systems, industrial decarbonisation, sustainable cities, food systems and connectivity, and natural capital preservation.
In developing these thematic areas, particular attention would be given to just transition, gender considerations, circular economy opportunities, green digital solutions and the role of energy efficiency.
And, as climate change mitigation is a key GET 2.1 objective, the Bank would seek to achieve cumulative greenhouse gas (GHG) emissions reduction of 25 to 40 million tonnes per year by 2025.
As part of GET 2.1, the EBRD would screen all investments for alignment with the Paris Agreement and national climate-related action plans, taking into consideration the priorities set in country and sector strategies.
It would also increase its capacity to support countries, regions and sectors to develop low carbon and climate resilience strategies and scale up its efforts to mobilise climate finance.
The EBRD would work towards full alignment with the Paris Agreement, on which a decision would be taken no later than 2022, taking into account the lessons learned from the initial phase of implementation of the methodology jointly developed by the Multilateral Development Banks.