This time, it's done! Last year the EIB announced that it wanted to become the leading climate bank, however, it still lacked the approval of Member States and shareholders. During its last management committee meeting, the EIB unanimously approved its new strategy and roadmap to becoming a climate bank. The EIB - the financial arm of the European Union - finances nearly €60 billion worth of projects each year. This financing is either given directly to large companies or SMEs through financing agreements with traditional commercial banks, or to public projects and infrastructure.This new roadmap should enable the EIB to fully align its activities with the Paris Agreement objectives and limit global warming below 2°C by the end of the century.
In November 2019, the management committee had already approved the decision to no longer finance fossil fuel projects. This time, the roadmap goes a bit further by detailing how the bank wants to transform. One of the key measures in the bank's new plan is screening all financing against global warming. The EIB will include criteria related to climate in its decisions, resulting in the bank being no longer able to finance projects, including airport extensions, agricultural activity extensions in natural areas, and factories that consume too much fossil fuel.
€1 trillion for the climate
Concurrently, the EIB wants to increase its share of climate finance. By 2025, climate finance should represent at least 50% of its total operations, or €30 billion annually. At the end of 2019, it had already planned on doubling the share of its funding to reach 25%. And the bank is continuing this momentum. In total, the public bank plans to generate €1 trillion in climate investments by the end of the decade.
In 2021, the EIB is expected to publish a new finance policy for transport. Additionally, the bank will help finance the transition of the most fossil fuel-dependent member countries - such as Poland - by supporting the European Commission's Just Transition Mechanism. This scheme aims to finance projects that help mitigate the socio-economic impact of phasing out fossil fuels, and is due to be unveiled some time next year. "The EIB Group will be the first public development bank to be aligned with the Paris Agreement ", commended Ambroise Fayolle, the bank's vice-president.
This new strategy was presented only a few days after the "Finance in Common" summit which brought together more than 450 public development banks around the world. At the close of the event, António Guterres - UN Secretary-General - rightly urged these institutions to green their activities by encouraging them to become CO2 neutral by 2050 and help achieve the Sustainable Development Goals ( SDGs) by 2030. The EIB, therefore, seems to have gotten a head start.