Corporate clients are asked to show decarbonisation or resilience plans
Financial institutions must increase climate-related disclosures
EIB Group offers technical support to prepare credible climate plans
The European Investment Bank Group launched today 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. A recording of the event is available here.
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 decarbonize 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 today provides clarity: From 2022 onwards, EIB corporate clients will need to develop and disclose decarbonisation and resilience plans. In general, 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 commented: “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.”
EIB Vice-President Ambroise Fayolle added: “The global financial sector must align its activities with the Paris Agreement goals. We are now extending our existing Paris Alignment framework beyond projects we finance, to include activities of corporates and financial intermediaries. The EIB is the first multilateral development bank to do so, and is thereby leading the way to green the global financial system and support the Paris Agreement goals.”
EIF Chief Executive Alain Godard stated: “To make the European Union the first carbon neutral continent by mid-century we must support companies and financial institutions to take climate action now. As the specialist provider of risk finance, the EIF has an important role in supporting a green recovery from the COVID-19 pandemic. I am delighted that the EIF, as part of the EIB Group, is launching the Paris Alignment for Counterparties framework to support the green transition of our financial partners across Europe.”
EIB at COP26
The EIB is present with a pavilion in Hall 4 of the Scottish Event Campus and runs a series of side events on numerous topics. You will find the full agenda here. You are welcome to join our virtual attendee hub to follow the sessions either live or in replay and network with attendees. With an easy two-steps registration, you will always have the latest information on our agenda.
The European Investment Bank is active in around 160 countries and is the world’s largest multilateral lender for climate action projects. The EIB Group has recently adopted its Climate Bank Roadmap to deliver on its ambitious agenda to support EUR 1 trillion of climate action and environmental sustainability investments in the decade to 2030 and to deliver more than 50% of EIB finance for climate action and environmental sustainability by 2025. Also, as part of the Roadmap, from the start of 2021, all new EIB Group operations will be aligned with the goals and principles of the Paris Agreement.
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments, which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
On Wednesday, the EIB Board of Directors, composed of representatives from the EU member states, approved the Climate Bank Roadmap (CBR) that sets out in detail how the EIB Group aims to support the objectives of the European Green Deal and sustainable development outside the European Union.
On 12 December 2015, the international community made history when it adopted the Paris Agreement. Five years on, the United Nations, United Kingdom and France are organising the Climate Ambition Summit 2020, in partnership with Chile and Italy. Leaders from governments and non-state actors will present new commitments to deliver on the Paris Agreement. The summit marks an important milestone ahead of next year’s COP 26 conference in Glasgow.