Supranational Banks’ New ESG Goals May Boost Private Investment in Green Finance

Multilateral development banks in Europe have new criteria and higher targets for green and sustainable investments, which will draw more private capital. The EIB and EBRD have announced plans to align their financing activities to the climate goals in the Paris agreement and reflect the EU taxonomy. The EIB will spend €1trn on green projects through 2030 and increase the share of its green financing to over 50% of total annual financing by 2025. The EBRD set the same target as part of the new Green Economy Transition approach, up from 40% of total financing and €11bn spent per annum. European developments have set the benchmark for the wider market. The region accounted for the bulk of global green bond issuance in 2020 (40% denominated in euros). The EIB will act as a “test case” within the EU taxonomy framework and provide through leadership rooted in business practice.