Developing criteria to align investments with 2°C compatible pathways

Cover: Kriterien für 2 Grad kompatible Investitionen
  • The German government, through the German Federal Environment Agency, commissioned a consortium consisting of NewClimate Institute, Germanwatch, and the 2° Investing Initiative to explore criteria to measure the alignment of investment and financing with the 2°C limit. The project focuses in particular on development finance institutions.
  • Financial institutions and climate objectives are connected both from a financial risk and climate change impact perspective. 2° investing criteria can inform this link and increase  financial sector transparency and accountability.
  • Current investment and financing flows are misaligned with the 2°C limit. Financial institutions can play a prominent role in contributing to aligning these flows. A particular focus of this project is on the role of national and international development finance institutions.
  • The majority of development finance institutions have started integrating climate-related criteria into their financing decision. The existing landscape of criteria however does not ensure an alignment of these financing decisions with the 2°C limit.
  • Using the long-term perspective provided in 2°C scenarios as a starting point, 2° investing criteria can be developed on the basis of 2°C decarbonisation, technology, and investment roadmaps. Further research and consultations with investment practitioners are needed to define processes and criteria that ensure 2°C compatible investment. Such a process would benefit from broad support by G7 and other governments and participation of a broad set of public financial institutions.
  • Further research and consultations with investment practitioners are needed to define processes and criteria that ensure 2°C compatible investment. Such a process would benefit from broad support by G7 and other governments and participation of a broad set of public financial institutions.

 

Document type
Report
Author(s)
Niklas Höhne, Christoph Bals, Frauke Röser, Lutz Weischer, Markus Hagemann, Alexander El Alaoui, David Eckstein, Jakob Thomä, Morten Rossé
Pages
31
Publication date

Contact

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:: on parental leave :: Senior Advisor - Climate Finance and Investments
+49 (0)228 / 60 492-45

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Head of Policy Berlin
+49 (0)30 / 57 71 328-64

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Policy Director
+49 (0)228 / 60 492-34