Greening investments: Make Multilateral Development Banks work for the Paris Agreement

In the landmark Paris Climate Agreement, the international community committed to limit global warming to well below 2°C, if not 1.5°C above preindustrial levels. World leaders also committed to foster adaptation and to make all financial flows consistent with climate resilient, low greenhouse gas development. The G20 as group of the leading industrial nations and emerging economies, being responsible for 80% of global greenhouse gas emissions, provides an important platform for joint action towards implementing the Paris Agreement.

Multilateral Development Banks (MDBs), which are dominated by G20-states, play a major role in this regard. This background paper describes most important areas of action for MDBs to achieve the climate and development goals as set out in the Paris Agreement and Agenda 2030. Specific measures for making MDB-portfolios climate-compatible, scaling-up financial means for MDBs, providing technological and institutional support for climate-compatible capacity building in MDB target countries, as well as tools for mobilising and shifting private finance are presented and discussed with a view to current developments.

Specific policy recommendations to the G20 are provided, such that the G20 states as major MDB shareholders use their power in the MDB boards to work towards comprehensive climate-compatible investment- and multiplier-strategies.