On the sidelines of the COP21 climate talks in Paris the European Investment Bank and 25 other leading financial institutions from around the world today agreed to adopt five Principles to Mainstream Climate Action. The new initiative provides benchmarks that will enable greater integration of climate related considerations into both lending and advisory activity by an unprecedented coalition of the world’s leading financial institutions.

“It is crucial to ensure that all new investment contributes to more effective climate action. As the world’s largest lender for climate related investment the European Investment Bank is pleased to share experience with financial institutions from around the world. Closer cooperation outlined by the new principles is essential for strengthening our combined efforts to combat climate change. This new initiative reflects the EU Bank’s own commitment to enhance the impact of climate action and follows the EIB’s climate lending strategy adopted earlier this year that ensures that climate action will be part of everything we do.” said Jonathan Taylor, European Investment Bank Vice President responsible for climate action and energy lending.

The landmark move was undertaken by 26 public and private financial institutions, from both developing and developed countries. By signing the voluntary principles, the financial institutions, together representing more than $11 trillion, are pledging to continue to integrate climate considerations into their investments and advisory functions, in an effort to scale up their efforts to address climate change.

The Principles highlight practical, operational approaches to integrate climate into the core investments and advisory functions of a financial institution.

They outline how financial institutions can:

  • Commit to climate strategies,
  • Manage climate risks,
  • Promote climate smart objectives,
  • Improve climate performance, and
  • Account for climate action.

These Principles have been developed based on practices implemented by financial institutions worldwide over the last two decades. A related publication also released today compiles emerging practices illustrating some of the many ways financial institutions currently integrate climate change considerations into their core activities.

The five voluntary Principles to Mainstream Climate Action within Financial Institutions were initially developed by a group of multilateral development banks (MDBs) and several members of the International Development Finance Club (IDFC), a network of national, regional and international development banks. This group was soon joined by several other public and private financial institutions worldwide.

Other institutions are being invited to take part in this initiative, as part of a collective responsibility to incorporate climate change considerations throughout their operations.