Public development banks, representing a total annual investment of $2.3 trillion, announced forming a global coalition in response to the COVID-19 pandemic.
The coalition is expected to contribute to the achievement of the United Nations’ Sustainable Development Goals (SDGs) as well as the objectives of the Paris Agreement to combat climate change, the European Bank for Reconstruction and Development (EBRD) said.
EBRD, which joined the coalition, said the banks inked a joint declaration at the first Finance in Common Summit held on Wednesday.
“The COVID-19 crisis has demonstrated that only joint action allows us to address the most urgent global challenges effectively and efficiently. In overcoming the crisis, our goal must be to build economies that are sustainable, resilient and inclusive,” said President of the EBRD Odile Renaud-Basso.
At its 2020 annual meeting in October, the EBRD adopted a new strategy for the next five years that increased its annual green investments to more than 50 per cent of the bank’s total investment through 2025.
EBRD’s Green Economy Transition (GET) approach for 2021-2025 commits the bank to focus on alignment with the Paris Agreement goals, with a decision on full alignment to be considered within the next two years.
In implementing GET for 2021-25, the EBRD is expected to pay particular attention to the social implications of change.
The public development banks commit to supporting the transformation of the global economy and societies towards sustainable and resilient development, according to the joint declaration.
The signatories stressed their determination to collectively shift their strategies and operations, commit to enhancing the crowding-in of private investment, increase the scale and sustainable development impact of private financial flows, and to foster capital market development and the alignment of these markets with the SDGs and the Paris Agreement through innovative approaches, alternative finance and blended finance.
The Finance in Common Summit groups more than 450 institutions.
During the summit, the signatories stressed the crucial role of public development banks in reconciling short-term responses to the crisis with sustainable recovery measures that will have a long-term impact on the planet and society.