Public and private financial institutions demonstrate their support for cities and subnational governments on climate action

At the Global Climate Action Summit, the 42 financial institutions part of the Climate Action in Financial Institutions Initiative released a Joint Statement demonstrating how they are moving from commitment to action – both individually and collectively - in supporting local climate action.

Made up of financial institutions with collectively over USD 13 trillion of total assets, the Climate Action in Financial Institutions Initiative focuses on integrating or ‘mainstreaming’ climate considerations into their activities to support the objectives laid out in the Paris Agreement.

The participating financial institutions of the Initiative reconfirm their commitment to collaborate to accelerate progress and address common challenges in the integration of climate considerations in their activities, while promoting transparency and accountability.

Today, during the Global Climate Action Summit held in San Francisco, Rémy Rioux, CEO of the French Development Agency (AFD) and Chair of the International Development Finance Club (IDFC) announced the release of the Joint Statement of the Supporting Institutions of the Climate Action in Financial Institutions Initiative:*

“Financial institutions play a pivotal role in scaling up and directing investments and assets that are necessary for transitioning to low-carbon, resilient economies. The integration of climate considerations by the financial community at large, as promoted by the Climate Action in Financial Institutions Initiative, is an absolute necessity to reach the objectives of the Paris Agreement. In so doing, the initiative’s Supporting Institutions are increasingly focusing on supporting subnational and city-level actors, who are fundamental drivers of climate-smart and sustainable development.” Said Rémy Rioux, CEO of the French Development Agency (AFD) and Chairperson of the International Development Finance Club (IDFC).

Aligned with the objectives of the ‘Talanoa Dialogue’, the Statement takes stock of over 40 new and existing commitments, programs and efforts of financial institutions supporting local climate action.

Institutions are advancing four priority areas for the mobilization of finance and technical support, with a special focus on supporting subnational climate action. These including the vertical integration of Nationally Determined Contributions (NDCs) at the city and subnational level; municipal technical assistance and financing; strengthening city- and subnational- capacity for resilience; and subnational climate-focused financial instruments and products.

“Cities are a key entry point for effective NDC implementation and can support higher ambition” says Amal-Lee Amin, IDB Chief of the Climate Change and Sustainability Division. “The concept of vertical integration will help align countries NDCs and city climate action plans with a view to increasing finance and other support for climate related investments at the city level.”

Moreover, to help both its Supporting Institutions and the broader financial community fulfill these ambitions, the Initiative is also launching an additional online resource today, Connecting the Dots between Climate FinanceInitiatives,** providing an overview of the work conducted by 30 of the most prominent ‘Organizations’, ’Convened Processes’ and ‘Calls to Action’ related to the Initiative’s 5 Mainstreaming Principles.

The Climate Action in Financial Institutions Initiative calls for other financial institutions to join their work and support the 5 Mainstreaming Principles as a model for the financial sector to move from commitments to action.

“Engagement of financial institutions is crucial to achieve low-carbon, climate resilient development and successfully implement the Paris Climate Agreement. The Climate Action in Financial Institutions initiative plays a key role in further developing and sharing mainstreaming best practice needed to maximise climate action, including in the urban sector. The EIB is proud to be at the forefront of this initiative and, along with other partners, remains actively committed to implementing its essential principles,” said Jonathan Taylor, European Investment Bank Vice President responsible for climate action