Glasgow: The European Investment Bank Group on Thursday launched its Paris Alignment for Counterparties framework.
The announcement was made at the official UNFCCC COP26 side event on aligning financial chains with the Paris goals — supporting the private sector in transition.
The EIB Group (European Investment Bank and European Investment Fund) is the first multilateral development bank to address the wider activities of clients while also helping them decarbonise and manage climate risks.
The Paris Agreement commits countries to “make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.
Already since the beginning of the year 2021, all new EIB Group projects and operations are aligned with the goals of the Paris Agreement. But this leaves open the question as to whether the EIB Group can support a green project with a client that, in its wider activities, continues to invest in high carbon activities.
The new framework launched provides clarity: From 2022 onwards, EIB corporate clients will need to develop and disclose decarbonisation and resilience plans.
In general, the EIB will no longer finance standard low-carbon projects of high-emitting corporates if the corporate continues to operate or invest in activities that are not aligned with the goals of the Paris Agreement.
Large financial institutions are asked to increase climate-related disclosures. The EIB Group is offering technical support to clients to help them prepare credible and robust climate plans.
EIB President Werner Hoyer said: “The COP26 climate conference is a milestone in the fight against climate change. There has been tangible progress since the Paris Agreement was adopted in 2015, but we are not yet on track to net-zero: more ambition is urgently needed.
“As the EU climate bank, we are fully committed to supporting the private sector in its green transition. Today’s launch of the Paris Alignment for Counterparties framework marks an important step to working with our clients to take meaningful climate action and prepare for the green economy of the future.”
