By Niclas Aleff
One of the key issues of fighting global warming is the financing. It appears as a fact that in order to tackle this problem effectively, big corporations from the public as well as the private sector will have to act in concert. This of course includes investments away from fossil fuels and is often linked to a reorganization of the corporation’s strategies and structures. Today I attended a side event titled “Mainstreaming climate change within financial institutions”, which was hosted by Corporation Andina de Fomento (CAF), Asociacion Interamericana para la Defensa del Ambiente (AIDA), and the European Investment Bank (EIB).
At the start of the event, world bank’s vice president Rachel Kyte defined the term “mainstreaming” for the following session as well as the “Common Principles for Climate Change Adaptation Finance Tracking”, a set of voluntary principles developed by the Multilateral Development Banks (MDB) and the International Development Finance Club (IDFC) preceding COP21. The objective of the principles is to effectively track adaption finance in order to invest in and support sustainable development projects. According to Rachel Kyte the 26 banks who have submitted to the principles already see this as an opportunity for themselves, and their clients to be first-movers. To reduce financial risks and inefficiencies, the network consisting of banks that have submitted to the principals shall also provide a platform for knowledge and practice sharing.
The introduction was followed by the panelists explaining their understanding and interpretation of the five principals.
Enrique Garcia, CEO of CAF, emphasized the bottom-up approach of the principles and underscored that mainstreaming of adaptation finance in financial institutions can only succeed, when the senior management is convinced of the economic and ecologic sense and therefore supports the implementation of actions against climate change in the corporation’s strategies and structure.
One of the key ambitions of the project is to “bring it forward”, as detected by Jonathan Taylor, vice-president of EIB. Tools like the mentioned knowledge sharing platform will be essential to attract and finally convince other financial institutions than banks of the opportunities in adaptation finance.
The event as such was interesting as it gave an insight on the financing methods of development projects as well as the mainstreaming of climate change issues into banks and financial institutions, a topic that I personally have been unfamiliar with so far.
However, in my opinion it needs to be mentioned that the event also provided a platform for banks like Credit Agricol, which according to banktrack was still one of the Top10 coal banks in 2014, to improve their public image.
For this reason I’m leaving the event with mixed feelings. On one hand I am hopeful that voluntary approaches like this one are a first step to integrate banks, the big players of the private sector, into the financing of climate change related projects. On the other hand I am afraid that instead of doing the second and the third step the toddler will fall back on his knees and crawl again.
Find the principles here.
Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily represent those of the International Forestry Students’ Association.