Aligning financial intermediary investments with the Paris agreement
In order for development finance institutions, including multilateral development banks and bilateral, regional and national development banks to “align” themselves with the Paris Agreement, they must make sure that their activities conducted through financial intermediaries are also aligned. It is important for intermediated finance to align with overall temperature and resiliency objectives both in terms of direct but also indirect impact. In addition, development finance institutions should conduct due diligence to ensure that intermediaries meet transparency and governance requirements on an institutional level track implementation and compliance. This working paper written by Germanwatch, NewClimate Institute and WRI provides input into ongoing discussion of Paris consistency and alignment of financial flows according to the Agreement’s Article 2.1c.