Operationalization framework on aligning with the Paris agreement
In 2017, the International Development Finance Club (IDFC) together with the group of Multilateral Development Banks (MDBs) made a joint commitment to “align financial flows with the Paris Agreement”. Since then, IDFC members as well as other financial institutions committed to alignment have recognized that aligning financial flows across all activities and business lines implies transformational changes within financial institutions. To support this process, NewClimate Institute and I4CE have developed a framework to serve as initial guidance. The operationalization framework is structured around the six principles of the 2018 IDFC position paper that lays out how members aim to achieve their alignment commitment. For each principle, the framework first lays out what the principle implies for development finance institutions at the strategic, operational, and country levels. Second, based on a review of existing tools and best practice examples, it identifies and provides guidance on a first selection of tools and approaches that may be used by an institution to start the alignment process. The framework is based on the premise that there is no single tool or metric that will allow an institution to align with the Paris Agreement; rather, a tailored combination of tools will be needed for each financial institution, based on its individual mandate, alignment objectives and strategy, its institutional culture as well as areas and sectors of interventions.
