Approaches to Meeting the Paris Agreement Goals

The report analyzes how public development banks (PDBs) can align their operations with the Paris Agreement, distinguishing between 'project-level alignment' and 'portfolio-level net-zero' approaches. It argues that project-level alignment is the essential foundation for PDBs to support national low-emission climate-resilient development pathways, while portfolio-level tools can provide strategic benefits for those engaging with the private sector. The document details 11 operational benchmarks—such as inclusion/exclusion lists, shadow carbon pricing, and risk assessments—and provides case studies of institutions like the EBRD, BNDES, and AFD to illustrate practical implementation.

• PDBs are obligated to align their operations with the Paris Agreement by providing support that is "entirely consistent with recipient countries’ low-emission climate-resilient development pathways."
• The primary strategy for PDBs is 'project-level alignment,' which uses assessments to ensure new financing activities align with national pathways. This differs from the 'portfolio-level net-zero' approach used by private institutions, which focuses on reducing financed emissions and is deemed insufficient on its own to achieve full Paris alignment for PDBs.
• The report identifies 11 common operational benchmarks used to steer financial flows, including 'Inclusion Lists' and 'Exclusion Lists' for screening activities, 'Shadow Carbon Pricing' for cost-benefit analysis, and 'Physical Risk Assessments' to mainstream adaptation and resilience.
• Case studies of five PDBs show that all implement project-level alignment, often using a multi-criteria approach. Some, such as BII and BNDES, also integrate net-zero portfolio benchmarks to manage private-sector engagement or maintain long-term institutional consistency.
• PDBs operating across multiple geographies and sectors face greater challenges due to data scarcity and the need for context-specific benchmarks to avoid 'last mile' problems where national pathways exist but investable project pipelines do not.
• Effective Paris alignment requires a 'do no harm' minimum condition, meaning activities should not be counterproductive to climate objectives or inconsistent with national sustainable development pathways.
• Strong stakeholder and counterparty engagement is critical; PDBs should encourage clients to develop their own transition plans and emissions reporting to ensure the credibility of the bank's own targets.
• The report recommends that PDBs without a comprehensive approach start with project-level alignment and that governance bodies (boards and senior management) must formally review these approaches regularly to address gaps.

APA

Chin, N., Pinko, N., Olutoke, J., Eschalier, C., Santos, L. Z., & Bendahou, S. (2024). Approaches to Meeting the Paris Agreement Goals. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf

Chicago

Chin, Neil, Nicole Pinko, Jide Olutoke, Claire Eschalier, Luis Zamarioli Santos, and Sarah Bendahou. Approaches to Meeting the Paris Agreement Goals. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf.

Wikipedia

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BibTeX

@techreport{chin2024approaches, author = {Chin, Neil and Pinko, Nicole and Olutoke, Jide and Eschalier, Claire and Santos, Luis Zamarioli and Bendahou, Sarah}, title = {{Approaches to Meeting the Paris Agreement Goals}}, institution = {Climate Policy Initiative}, year = {2024}, month = jul, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }