Implementing Alignment with the Paris Agreement: Recommendations for the Members of the International Development Finance Club

This report provides a comprehensive framework and actionable recommendations for members of the International Development Finance Club (IDFC)—a group of 24 national and regional development banks—to align their strategies and operations with the goals of the Paris Agreement. It emphasizes that alignment requires moving beyond incremental climate finance to a systemic transformation of financial flows, ensuring all activities are consistent with low-GHG, climate-resilient development pathways.

• The report defines Paris alignment as a process ensuring an institution's strategies and activities are consistent with the goals of the Paris Agreement, specifically Article 2.1a, b, and c, which aim to limit temperature increase to well below 2°C, increase adaptive capacity, and make all finance flows consistent with low-GHG emissions and climate-resilient development.
• A conceptual framework for alignment is proposed based on three dimensions: a comprehensive scope of action (supporting low-GHG development across all business areas), a long-term time horizon (prioritizing actions consistent with long-term goals to avoid lock-in or mal-adaptation), and an ambitious scale of contribution (ensuring activities 'do no harm', support climate co-benefits, and foster transformative outcomes).
• IDFC members are uniquely positioned to drive alignment due to their close relationships with national and sub-national governments, their diverse client base across public and private sectors, and their significant financial scale, managing over USD 4 trillion in assets.
• At the country level, IDFC members can facilitate alignment by providing policy advice to help governments develop low-GHG pathways, coordinating multi-stakeholder dialogues, building capacity to mitigate physical, liability, and transition risks, and maintaining pro-active relationships with government decision-makers.
• Strategic-level alignment requires executive leadership to adopt institution-wide objectives with long-term visions and near-term milestones, implement incentive structures that generate staff buy-in, and update risk management frameworks to catalyze transformative investments while managing climate risks.
• Operational alignment involves updating investment criteria to distinguish between activities that 'do no harm', provide co-benefits, or drive transformative change, and applying these criteria across all operations, including direct lending, intermediary lending, and procurement.
• The report highlights the importance of supporting project development at the earliest stages to ensure a pipeline of bankable, Paris-aligned projects and to avoid the difficulty of modifying projects that have already undergone extensive planning.
• To increase the scale of impact, IDFC members should utilize a broader range of financial instruments to mobilize private capital, including risk mitigation tools (guarantees), equity financing, loan syndication, and aggregation platforms.
• Effective alignment requires a robust evaluation and reporting system that tracks progress against both short-term and long-term objectives, including the share of aligned versus non-aligned activities and the assessment of carbon assets at risk.
• The report notes that no IDFC member is currently fully aligned and that the path to alignment will vary based on internal capacity and political environments; some may start 'from the top' with mandate reviews, while others may start 'from the bottom' by demonstrating the compatibility of climate and development goals.

APA

Clark, A., Choi, J., Tonkonogy, B., Micale, V., & Wetherbee, C. (2019). Implementing Alignment with the Paris Agreement: Recommendations for the Members of the International Development Finance Club. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Full-Report.pdf

Chicago

Clark, Alex, June Choi, Bella Tonkonogy, Valerio Micale, and Cooper Wetherbee. Implementing Alignment with the Paris Agreement: Recommendations for the Members of the International Development Finance Club. Climate Policy Initiative, 2019. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Full-Report.pdf.

Wikipedia

{{cite report |last1=Clark |first1=Alex |last2=Choi |first2=June |last3=Tonkonogy |first3=Bella |last4=Micale |first4=Valerio |last5=Wetherbee |first5=Cooper |title=Implementing Alignment with the Paris Agreement: Recommendations for the Members of the International Development Finance Club |publisher=Climate Policy Initiative |date=September 2019 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Full-Report.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clark2019implementing, author = {Clark, Alex and Choi, June and Tonkonogy, Bella and Micale, Valerio and Wetherbee, Cooper}, title = {{Implementing Alignment with the Paris Agreement: Recommendations for the Members of the International Development Finance Club}}, 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-_-Full-Report.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }