European Development Finance Institutions announce joint ambitions for climate action
EDFI group outlines shared commitments to phase out fossil fuels and mobilise private sector climate finance, aligning with Paris Agreement and high disclosure standards.
The Association of European Development Finance Institutions (EDFI), which has a combined $50 billion under management in emerging and frontier markets, has announced that its 15 publicly-owned member institutions will align all new financing decisions with the objectives of the Paris Agreement by 2022 and will ensure that their portfolios achieve net zero emissions by 2050 at the latest.
EDFI member institutions will immediately cease new coal or fuel oil financing and will limit other fossil fuels, such as selective investments in gas-fired power generation, to financing consistent with the objectives of the Paris Agreement until generally excluding them by 2030 at the latest. The new commitment includes direct investments, indirect investments made through investment funds and dedicated lending via financial institutions.
EDFI member institutions are determined to build on their strong track-record in climate finance and mobilise private sector climate finance by holding themselves to ambitious individual targets and reporting on their progress, while also delivering on their core development missions.
In its statement today, EDFI said: “A significant and progressive alignment of private capital flows to developing countries will be required to reach the UN Sustainable Development Goals by 2030 and to implement the Paris Agreement. Over the past five years, the European DFIs have committed €8 billion to climate finance in low and middle-income countries. Now, in the lead-up to COP 26, and as countries around the world strive to achieve a sustainable recovery from the Covid-19 pandemic, it is more important than ever that European DFIs set a collective example for investors in developing markets.”
Søren Peter Andreasen, CEO of EDFI, said: “As taxpayer funded organisations, we are committed to promoting green growth, climate adaptation and resilience, nature-based solutions, access to green energy and a just transition to a low-carbon economy. Today’s announcement underlines that commitment. DFIs are diverse institutions that will follow different paths and use their best efforts to implement these commitments, with some institutions going even further in certain areas and others needing more time for implementation. By working together on these joint ambitions, European DFIs will take full account of their effects on the planet without compromising on their development impact.”
EDFI members will also make climate-related financial disclosures in line with the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”).
For the full EDFI statement and technical specifications, please see HERE