In 2017, the International Development Finance Club (IDFC) together with the group of Multilateral Development Banks (MDBs) made a joint commitment to “align financial flows with the Paris Agreement”. Since then, IDFC members as well as other financial institutions committed to alignment have recognized that aligning financial flows across all activities and business lines implies transformational changes within financial institutions.
To support this process, NewClimate Institute and I4CE have developed a framework to serve as initial guidance. The operationalization framework is structured around the six principles of the 2018 IDFC position paper that lays out how members aim to achieve their alignment commitment. For each principle, the framework first lays out what the principle implies for development finance institutions at the strategic, operational, and country levels. Second, based on a review of existing tools and best practice examples, it identifies and provides guidance on a first selection of tools and approaches that may be used by an institution to start the alignment process.