World Bank drops 45 per cent climate finance target, extends Climate Change Action Plan after shareholder negotiations

The World Bank has retired its target of allocating 45 per cent of annual lending to climate-related activities, marking a significant rollback of one of its flagship climate finance commitments, while extending its Climate Change Action Plan (CCAP) after negotiations among shareholders.

The move comes despite appeals from France and developing countries to preserve the target and at a time when multilateral development banks (MDBs) are expected to play a central role in mobilising at least $1.3 trillion annually in climate finance for developing countries by 2035 under the roadmap agreed at the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29).

The Bank said it would continue to report on climate finance and track climate-related outcomes. Still, it would no longer be bound by the 45 per cent climate co-benefits target announced at the 28th Conference of the Parties (COP28). It also retired the 35 per cent climate target under the CCAP.

Climate plan survives, lending target removed

In a statement issued on June 29, the World Bank said its work on climate “is and will remain firmly client-driven”, supporting countries in delivering their national development priorities and Nationally Determined Contributions under the Paris Agreement.

“Our framework has served its purpose well, embedding smart development in all we do in response to client needs and priorities. We will therefore extend the Climate Change Action Plan,” the Bank said without specifying the duration of the extension.