Aligning investments with the temperature goal of the Paris agreement: challenges and opportunities for Multilateral Development Banks
This working paper assesses how Multilateral Development Banks can support the global temperature goal of the Paris Agreement. It illustrates how the banks could strengthen existing tools to align their portfolios and activities with the globally agreed mitigation goal. Other finance institutions can also profit from many of the approaches included in the paper. The analysis starts with a review of scientific scenarios to understand what the temperature goal means for different investment areas. It also reviews existing tools and activities at the Multilateral Development Banks. Building on those, the research then suggests various tools and approaches to align portfolios with the temperature goals. It focuses on the energy supply sector and transport, and provides options both for direct project investments as well as for financial intermediaries and policy-based lending.