The European Bank for Reconstruction and Development will align all its activities with the Paris Agreement goals by the end of 2022, the bank said in a statement Thursday.
The EBRD’s Board of Governors approved the decision at the Bank’s Annual Meeting 2021 with the aim of accelerating decarbonization across its regions, and supporting countries to reach net-zero emissions by 2050, the statement said.
The bank had already committed last year to raise the proportion of its green finance to more than 50% by 2025.
"Holding the increase in the global average temperature to well below 2°C is a global imperative to safeguard our planet and protect ourselves from climate-related risks. With today’s commitment the EBRD will be at the forefront among multilateral institutions to ensure that our work is directed to helping countries achieve net zero by the middle of the century," EBRD President Odile Renaud-Basso was quoted as saying in the statement.
"By way of its multilateral shareholding and private sector focus, the EBRD will help its countries of operations manage the political and economic challenges related to such an unprecedented transition. I truly welcome the push from all our shareholders to accelerate on this shared agenda," she said.
The EBRD said the changes would drive all future strategy, operations and client engagement.
The projects will be screened to ensure that they are consistent with long-term progress to low-carbon development while physical climate risks are addressed using a methodology developed jointly with other multilateral development banks.
The statement said that EBRD countries are 35% more carbon-intensive than the world average with coal accounting for over 40% of the primary energy supply in seven EBRD countries.
"Yet the EBRD regions are well positioned to benefit from the fast-growing transition to renewables, thereby reducing their reliance on fossil fuels, with excellent resource and growing capacity in wind, solar and hydropower. The bank will therefore increase financing for renewable energy and associated energy systems," the statement read.
The bank will also finance its countries of operations to be digital, equal and sustainable and invest in helping communities affected by the closure of coal mines and other carbon-intensive industries.
"The low-carbon transition requires the world economy to move in less than 30 years from a more than 80% reliance on fossil fuels to a net-zero model. This is a challenge that is unprecedented in economic history. Similarly, the associated opportunity is enormous," the EBRD’s First Vice-President Jurgen Rigterink noted.
By Nuran Erkul Kaya