An unprecedented coalition of the world’s leading financial institutions have officially signed on to five voluntary Principles to Mainstream Climate Action into their operations.
The landmark move was undertaken by 26 financial institutions, from both the public and private sectors, from developing and developed countries. By signing onto the voluntary principles, the financial institutions (which together are worth a total value of more than US $11 trillion) are pledging to continue to integrate climate considerations into their investments and advisory functions, in an effort to scale up their efforts to address climate change thereby “greening” operations over time.
The Principles highlight practical, operational approaches to integrate climate into the core investments and advisory functions of a financial institution. They outline how financial institutions can:
- Commit to climate strategies,
- Manage climate risks,
- Promote climate smart objectives,
- Improve climate performance, and
- Account for climate action.
These Principles have been developed based on practices implemented by financial institutions worldwide over the last two decades. A related publication also released during the UN conference on climate change (COP21) compiles emerging practices illustrating some of the many ways financial institutions currently integrate climate change considerations into their core activities. See weblink: http://bit.ly/FImainstreaming
The African Development Bank (AfDB) joined other multilateral development banks and development finance institutions including Agence française de développement and KfW (German Development Institution) in March 2015 to begin to articulate these principles by seeking to share knowledge on best practice in promoting climate-smart development.