The first challenge is to reach a common understanding of what „Paris harmonization“ means for multilateral development banks. PACTA for Banks allows banks to measure the alignment of their corporate loan portfolios with climate scenarios across a number of important climate-related sectors and technologies. It is a major step forward in the analysis of climate scenarios for lending, giving banks an overview of the climate direction of the capital stock and the spending plans of their corporate clients. The first joint financial summit resulted in a joint statement by the world`s 450 state-owned development banks that they would align funding decisions with the Paris climate change agreement. This search for „transformative“ effects is, in our view, one of the greatest challenges of alignment with the Paris Agreement. This challenge should not be underestimated, because development banks, because of the structure of the climate targets – that is, the famous commitment of 100 billion euros – are more used to thinking about the volume of financing than the impact on the climate. It is difficult for GMOs to find institutional positions on what exactly the Paris agreement requires, as this can vary considerably from country to country, according to bank officials. The agreement is based on a system of „nationally defined contributions“ so that what helps one country move towards a carbon-free economy could be a step in the wrong direction for another country. This website features the PACTA for Banks toolkit, which allows banks to operate PACTA independently. The toolkit consists of: the world`s largest banks, insurers and fund managers are under pressure from public opinion, politics and their shareholders to commit to long-term climate goals under the Paris Agreement.

Prior to the summit, a group of European development banks made a separate commitment to phase out fossil fuel investments and said they would work towards a stronger position in coal investment in time for COP 26. [Finance at the Joint Summit website] [Press release] The banks have convened a working group to hold one of their meetings on Thursday and are trying to address some of these issues. The international agreement reached at the Paris climate summit reinforces the prospect of significant transitions in many sectors in all economies over the next ten years and beyond. The world`s largest banks, insurers and money managers are under pressure from public opinion, politics and their shareholders to commit to long-term climate goals. Some have already said they will direct their funding towards the 2015 Paris Agreement and its goal of a ceiling of 1.5 degrees Celsius for climate change. Many more such announcements are expected to follow next year, in the run-up to the UN climate talks in Glasgow, Scotland, at the end of 2021, which are expected to focus on finance. The banks issued a joint statement pledging to focus more on the climate emergency. The signatories pledge to „align our activities with the objectives of the Paris Agreement“ and to support national contributions (NDCs) and long-term strategies to achieve net zero emissions as soon as possible.