REPORTS & DATA

There is a growing focus on the need to effectively and rapidly shift capital toward sustainable solutions. However, key questions remain as to how investors, stakeholders, and decision-makers alike can best assess which companies, activities, or financial products are truly sustainable. And how can this information best be standardized across various contexts? IFC and CDP, a not-for-profit which runs the global environmental disclosure system, prepared a report analyzing the current state of best practices in environmental disclosure, examining more than 100 disclosure practices across developed and developing economies. The report, which was developed in consultation with the United Nations Sustainable Stock Exchanges Initiative (UN SSE), also highlights practical examples for developing high-quality regulation that addresses market needs and investor demands, helping to mobilize private capital flows towards sustainable solutions.

Unlocking opportunities to create a sustainable cooling strategy can help India in its post-COVID recovery by boosting investments, creating jobs, reducing emissions, and securing the supply chains of medical care products, health infrastructure as well as food. Anticipating the complex cooling energy trends and challenges facing India, in 2019, the government of India launched the India Cooling Action Plan (ICAP) to help provide sustainable cooling and thermal comfort for all. This study focused on ICAP’s thematic cross-sectoral areas including space cooling in buildings, cold chain and refrigeration, transport air-conditioning and refrigerants. The analysis identifies eight key clustered opportunities where concessional finance can play a significant role in advancing the goals of ICAP and sustainable cooling in India.

There is a growing recognition of the need to transition to sustainable business models that protect biodiversity and ecosystem services. Finance and innovative financial solutions are key to supporting this transition; and biodiversity finance has emerged as a fast-growing area in green finance with increased interest from investors, financial institutions, and issuers globally. Currently, however, there is no guidance in the market on project eligibility criteria for biodiversity finance. To address this gap, IFC has developed a Biodiversity Finance Reference Guide. This guide builds the Green Bond Principles and the Green Loan Principles and provides an indicative list of investment projects, activities, and components that help protect, maintain, or enhance biodiversity and ecosystem services, as well as promote the sustainable management of natural resources.

The World Bank Group’s Country Climate and Development Reports (CCDRs) are new core diagnostic reports that integrate climate change and development considerations. CCDRs build on data and rigorous research and identify main pathways to reduce GHG emissions and climate vulnerabilities, including the costs and challenges as well as benefits and opportunities from doing so. As public documents, the reports inform platforms for governments, their citizens, the private sector, and partners to engage on the development and climate agenda, supported by better coordination at the country level. ​CCDRs can also signal high-impact actions that may attract funding from concessional and commercial financing from development financiers, including non-traditional donors, and the private sector.

While climate change causes many types of natural disasters, including biodiversity loss, landslides and wildfires in Africa, this study focuses on the most frequent and economically damaging to infrastructure and livelihoods, namely floods and droughts. Among the 43 African countries analyzed, all of which experienced at least one drought or flood since 1990, the study finds that there are up to $100 billion in total in potential upfront adaptation investment opportunities, or $5 billion a year, between now and 2040. This is an upper-bound estimate, contingent on the investment being commercially viable with the necessary technologies available and a favorable investment climate.

Clear incentives for investors, transparent carbon markets, the backing of a partner with real financial or business clout. These are some of the features IFC believes will make a successful outcome more likely for issuers of ‘forests bonds,’ debt issued to raise money for tackling deforestation where interest rates are tied to the borrower meeting predetermined targets. The conclusions contained in this article are based on the lessons learned from IFC’s role in the first-ever forests bond, issued in 2016 that matured five years later. With 10 million hectares of forest lost every year worldwide1, triggering desertification, erosion and reducing the earth’s natural ability to absorb carbon dioxide, the need to raise funds is becoming ever more urgent.

This report is the OECD’s fifth annual assessment of progress towards the UNFCCC goal. As a continuous progress analysis of global climate finance developments, this report presents the evolution of total annual levels of climate finance provided and mobilised by developed countries for developing countries over 2013-2020. For 2016-2020, it includes an overview by climate theme, sector, financial instrument and regions.

The Common Principles for Climate Mitigation Finance Tracking consist of a set of definitions and guidelines and a list of eligible activities that allow for consistent accounting and reporting of financial flows for climate change mitigation finance.

In 2021, the volume of green bond issuance in emerging markets more than doubled to a record US$95 billion from US$41 billion in 2020. In all, 35 emerging markets and developing economies (EMDEs) issued green bonds in 2021, including seven new entrants. The fourth edition of IFC and Amundi’s Emerging Market Green Bonds Report provides a detailed update of developments in green bonds issued in EMDEs and the outlook for the coming year. For the first time, it includes a focus on social, sustainability, and sustainability-linked bonds issued in these countries. The report also looks at the need for EMDEs to scale up investments in climate adaptation and discusses global policy initiatives, including those announced at the 26th United Nations Climate Change Conference of the Parties. A final section looks at the “greening” of debt restructuring, which allows countries whose debt is unsustainable to direct capital toward green and sustainable investment.

The first thought leadership paper from the Alliance for Commercial Banks provides a primer on climate risk and its broad reverberations in the financial services industry. It offers an overview of the effects of climate risk on financial institutions and financial markets, discusses new techniques for measuring climate risk, and explores the evolving practices of financial institutions in tackling it, as well as the related regulatory initiatives. The paper concludes with a few considerations regarding climate resilience going forward. This thought leadership paper was prepared by the Alliance for Green Commercial Banks in partnership with the Hong Kong Institute for Monetary and Financial Research, the research arm of the Hong Kong Academy of Finance.