Compared with the total investment required over the next fifteen years to meet the goals set by the Paris Agreement, the climate finance gap is $2.5 – 4.8 trillion. Bridging this gap would require an additional $166 – 322 billion per year based on current investment estimates*.

IFC’s extensive global experience and local market knowledge in climate finance and sustainability risk management allows the Alliance for Green Commercial Banks (the Alliance) to support financial institutions with:


Growing financial institutions’ green portfolios

Designing new product

Designing new products and services for green projects and businesses

Improving bank

Improving employees’ knowledge capacity on green finance

Reducing and off-setting banks’

Reducing and off-setting financial instituions’ carbon footprints

Screening banks’

Screening portfolios against a 2-degree transition pathway and exposure to climate risk

Adherence to international good practice

Adherence to international best practices in managing environmental and social risk and performance in lending and investments

IFC has been piloting successful green finance models in China, Ukraine, and some parts of Latin America. Leveraging IFC's expertise, the Alliance aims to inspire more financial institutions globally to explore differentiated and distinctive green development paths that meet a robust and credible standard. If successful, this will reshape the green finance market globally and mobilize more resources in climate-related industries to reduce GHG emissions.


Following the Paris Agreement, 192 parties* around the world submitted their Nationally Determined Contributions (NDCs) with pledges to reduce greenhouse gas (GHG) emissions under the United Nations Framework Convention on Climate Change.

To achieve these climate targets, many countries have created policy packages to green their economies. Green financing needs however remain unmet, indicating a significant untapped potential for banks to grow their green financing products and services. The green financing gaps will only be bridged if commercial banks adopt strategies and targets to develop green finance products and services to support the real economy in the green transition. To achieve global climate targets and respond to the policy packages needed to green national economies, tremendous financing is required that cannot be met by the public sector alone. Private sector financing is crucial to a green transition.

The financial sector, and commercial banks in particular, therefore have an important role to play, especially in emerging markets where government budgets are limited. This need also offers tremendous investment opportunities. IFC research estimates more than $29 trillion in climate investment opportunities in cities in emerging markets over the next decade. Sectors include green buildings, public transportation, electric vehicles, waste, water, and renewable energy.

Meanwhile, adopting green practices offers banks -- especially regional and boutique banks in emerging markets-- a powerful means to differentiate themselves and grow by attracting international capital and customers seeking sustainable finance options. By reducing risk and unlocking new lending opportunities, green banking can help these financial institutions outperform and reposition themselves against other market competitors, gain market share, and increase profitability.

* UNFCCC data as of September 17th 2022