Strengthening Greenhouse Gas Mitigation in IFC-Financed Projects

Summary

As the urgency of the global climate crisis intensifies, it is essential for development finance institutions to take decisive action. In this context, CAO has released a new Advisory Note, Strengthening Greenhouse Gas Mitigation in IFC-financed Projects, as the first thematic input in a series of insights to guide the upcoming review of IFC Sustainability Framework. The report analyzes IFC’s current practices for quantifying, mitigating, and reporting greenhouse gas (GHG) emissions in its financed projects.

CAO's research emphasizes the need for IFC to strengthen its GHG mitigation approach to align with the World Bank Group's commitment to Paris Agreement, particularly the goal of limiting global warming to 1.5 degrees Celsius. The report outlines specific areas for improvement within IFC’s Sustainability Framework, including: i) aligning client GHG quantification, mitigation and reporting requirements with good international industry practices; ii) amending IFC’s Performance Standards to ensure the protection of ecosystems that store or sequester carbon; iii) bringing IFC's portfolio GHG accounting and reporting practices in line with current global standards for the financial industry; and Iv) revising its approach to Financial Intermediaries (FI) investments to strengthen and align mitigation of GHGs in FI subprojects with industry good practices. By addressing these areas, IFC can play a pivotal role in advancing effective climate action.

See our press release here.