Dive Brief:
- The World Bank Group announced Monday it will “retire” a goal that committed 45% of its annual financing to projects with climate benefits.
- The group said the previous iteration of the target — which devoted 35% of financing to such projects over a five-year period — would also be scrapped.
- The development comes as the international organization has faced increased pressure from the Trump administration to drop the climate lending target. The World Bank updated its financing commitment to 45% in 2023 during Joe Biden’s tenure in the White House, a step up from what it had initially committed in 2020 as part of its Climate Change Action Plan.
Dive Insight:
Despite sunsetting the climate financing targets, the World Bank said it will extend the CCAP, which was set to expire Tuesday. The framework seeks to integrate climate mitigation into the World Bank’s financing and programming initiatives. The CCAP also offers countries technical support to help them cut their carbon footprint and adapt to climate change.
The World Bank said in a June 29 release that its “work on climate is and will remain firmly client driven, supporting them in delivering on their own ambitions as set out in their national plans and Nationally Determined Contributions.” The group added that it will shift its focus “from inputs to outcomes to maximize development impact.”
The organization has faced ongoing scrutiny from the current administration over its climate financing initiatives.
Earlier in April, U.S. Treasury Secretary Scott Bessent called the World Bank’s climate financing target “distortionary,” “nonsensical” and “arbitrary” during a spring meeting session held for the organization and the International Monetary Fund in Washington.
Bessent said the group should maintain its “core mission of reducing poverty and increasing economic growth, which he said would entail “jettisoning the World Bank Group’s 45% climate finance target that breeds inefficiency, distorts economic decision making, and moves the Bank away from its core mission.”
The United States — the World Bank’s largest shareholder — also declined to sign a letter last fall which endorsed the bank’s ongoing work on climate change.
The World Bank said Monday it would comply with a board request to undertake an independent evaluation of the CCAP to determine if the plan is helping countries grapple with climate change.
