Strengthening Public Financial Institutions
Strengthen key policies and governance elements in strategically-important institutions in order to promote financing for sustainable activities and discourage financing for unsustainable ones.
Multilateral and national public financial institutions remain major providers of finance for sustainable, climate-compatible activities. These institutions’ investments and knowledge will be critical for meeting the climate and other sustainability challenges, as well as to meet the goals of the Paris Agreement. The institutions include the multilateral development banks (MDBs); specialized funds such as the Green Climate Fund (GCF), the Adaptation Fund, and the Climate Investment Funds; and national development banks under the umbrella of the International Development Finance Club (IDFC).
The Finance Center seeks to strengthen key policies and governance elements in a small set of strategically-important institutions in order to promote financing for sustainable activities and discourage financing for unsustainable ones. We rely on our deep knowledge of these institutions, the UNFCCC finance negotiations, and of the climate finance architecture; on our convening power; and on our in-house sectoral expertise to produce timely research products to inform key decisions. While our efforts apply to a broad range of financial institutions, our focus is primarily on:
- MDB policies, practices, and governance
- Policies, practices, and governance of specialized climate funds, especially the GCF
- UNFCCC finance negotiations
- IDFC analytical and strategic activities
In addition to the MDBs, other development finance institutions (DFIs), such as national, bilateral, and regional development banks, play an important and growing role in financing sustainable development, including providing climate finance. The International Development Finance Club (IDFC), an association of national, bilateral and regional development banks from around the world, committed $85 billion of climate finance in 2014.
The Finance Center has provided analytical and strategic support to the IDFC in areas such as green finance tracking and development of the Principles for Mainstreaming Climate Action. Present and future work may include helping the IDFC to mainstream climate considerations into their investment decisions, tracking climate finance, and fully implementing the Principles.