Aligning with the Paris Agreement

This executive summary, produced by the Climate Policy Initiative (CPI) and the Institute for Climate Economics (I4CE), provides a framework and actionable recommendations for the 24 national and regional development banks of the International Development Finance Club (IDFC) to align their financial activities with the goals of the Paris Agreement.

• The Paris Agreement has shifted the focus of climate action from near-term incremental increases in mitigation and adaptation toward the long-term transformation of societies and economies, emphasizing bottom-up, country-led development pathways that are climate-resilient and low-greenhouse gas (GHG) emitting.
• I4CE proposes a three-dimensional framework for financial institutions to define alignment: a comprehensive scope of action across all business areas, a long-term time horizon to avoid lock-in or mal-adaptation, and an ambitious scale of contribution categorized by activities that 'do no harm', support Paris-consistent co-benefits, and foster transformative outcomes.
• Financial institutions must integrate Paris Agreement goals into their overarching strategies and operational procedures, which includes scaling down or halting activities inconsistent with these goals and leveraging their potential to support low-GHG transformations.
• The International Development Finance Club (IDFC) consists of 24 national, bilateral, and regional development finance institutions managing over USD 4 trillion in assets. These institutions are uniquely positioned to influence policy design and project pipelines due to their close relationships with national and sub-national governments.
• To implement alignment, IDFC members are encouraged to develop internal working definitions, utilize their relationships with governments for policy advice and risk mitigation, and adopt institution-wide objectives with accompanying metrics to drive the phase-out of non-aligned projects.
• Operational alignment for IDFC members requires updating investment criteria to distinguish between activities that do no harm, provide co-benefits, or create transformative change, while also promoting private sector participation through under-utilized risk mitigation instruments.
• No IDFC member is currently fully aligned, and the path to alignment varies by institution. Those with centralized leadership may start with mandate reviews, while those in challenging political environments may start by demonstrating the compatibility of climate and development through innovation units.

APA

Cochran, I., Pauthier, A., Clark, A., Choi, J., Tonkonogy, B., Micale, V., & Wetherbee, C. (2019). Aligning with the Paris Agreement. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Executive-Summary.pdf

Chicago

Cochran, Ian, Alice Pauthier, Alex Clark, June Choi, Bella Tonkonogy, Valerio Micale, and Cooper Wetherbee. Aligning with the Paris Agreement. Climate Policy Initiative, 2019. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Executive-Summary.pdf.

Wikipedia

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BibTeX

@techreport{cochran2019aligning, author = {Cochran, Ian and Pauthier, Alice and Clark, Alex and Choi, June and Tonkonogy, Bella and Micale, Valerio and Wetherbee, Cooper}, title = {{Aligning with the Paris Agreement}}, institution = {Climate Policy Initiative}, year = {2019}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Executive-Summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }