Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Increased renewable energy investments, leading to greater capacity additions despite economic challenges.
• Significant cost reductions in solar and wind technologies.

Social Achievements

• Increased adaptation finance, reflecting a broader positive trend where public actors are recognizing the importance of climate-resilient development.
• Efforts to incorporate gender lens into climate finance, though data is still scarce.

Governance Achievements

• Improved data on climate finance flows from state-owned financial institutions, particularly in East Asia & Pacific.
• Increased commitments from multilateral DFIs towards climate-related financing.

Climate Goals & Targets

Environmental Challenges

• Total climate finance flows have slowed in recent years.
• Adaptation finance continues to lag behind mitigation finance.
• Limited data availability prevents a full accounting of domestic government expenditures on climate finance and private sector investments in several sectors.
• High-emissions investments continue to flow in key sectors.
• Barriers to mobilizing private sector investment in adaptation and limitations on tracking private sector adaptation investment.
• Lack of standardized information on climate investments and definitions/metrics.

Mitigation Strategies

• Improved and standardized definitions, methodologies, and data access are key to inform necessary climate investment decisions.
• Increased efforts to track domestic climate finance flows.
• Increased commitments from public and private actors to align investments with Paris goals and net-zero pathways.
• Efforts to improve data collection and reporting on adaptation finance, particularly from the private sector.
• Increased focus on incorporating gender lens into climate finance.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Economic losses from natural disasters

Transition Risks

• High-emissions investments curbing the impact of new finance

Opportunities

• Green recovery plans and net zero strategies

UN Sustainable Development Goals

• SDG 5 (Gender Equality)
• SDG 13 (Climate Action)

Climate projects with gender equality objectives help raise visibility for and measure progress toward SDG 5 and SDG 13. Other possibilities include tracking climate finance offering biodiversity co-benefits, in turn measuring progress towards SDG 13, 14, and 15.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity

Environmental Achievements

• IDFC members reported total green finance commitments of $224 billion in 2021, a 21% increase from 2020. Mitigation finance reached $186.6 billion (27% increase from 2020). Biodiversity finance reached $18.4 billion (31% increase from 2020).

Social Achievements

• Not disclosed

Governance Achievements

• Improved reporting methodology with greater granularity, especially for energy sectors. Increased transparency through provision of project-level data from 9 members (compared to 7 in 2020).

Climate Goals & Targets

Environmental Challenges

• Adaptation finance decreased by 24% in 2021, primarily due to lower commitments for disaster risk reduction. Data gaps in certain sectors make it challenging to estimate the true volume and impact of green finance.
• Challenges in mainstreaming biodiversity into projects due to sectoral challenges and knowledge barriers.

Mitigation Strategies

• IDFC members reiterated a strong commitment to increase adaptation finance. IDFC is working to improve reporting methodology and fill data gaps. IDFC developed a toolbox on integrating biodiversity into strategies and operations.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Climate change-induced weather events

Transition Risks

• Market volatility

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: MDB-IDFC Common Principles for Climate Mitigation Finance Tracking, MDB-IDFC Common Principles for Climate Change Adaptation Finance Tracking

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

IDFC members are aligned with and work together to implement the Sustainable Development Goals (SDGs) and the Paris Climate Agreement agendas.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Impact
• Supply Chain Sustainability
• Just Transition
• Diversity & Inclusion

Environmental Achievements

• Nearly 78 GW of wind power capacity added globally in 2022 (third highest year in history)
• Continued cost reductions in wind energy making it competitive with fossil fuels

Social Achievements

• Millions of skilled jobs created globally through wind energy development
• Initiatives to promote diversity and inclusion within the wind energy workforce (Women in Wind program)

Governance Achievements

• Collaboration with governments and other stakeholders to promote sound policies and a just energy transition
• Advocacy for improved market design and procurement practices to ensure industry viability

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to inflation, rising interest rates, geopolitics, and bottlenecks
• Inadequate and inefficient permitting and licensing rules
• Race to the bottom pricing in some markets
• Limited supply chain capacity to meet growing demand
• Geopolitical tensions and trade restrictions impacting supply chains
• Lack of sufficient investment in supply chain capacity
• Shortages of key components such as blades, generators, and vessels
• Uneven distribution of supply chain capacity across regions
• Need for workforce training and skills development

Mitigation Strategies

• Advocating for supportive government policies and market conditions
• Promoting investment in new manufacturing capacity and facilities
• Encouraging collaboration and partnerships across the supply chain
• Developing alternative sourcing strategies
• Implementing incentive-based policies to stimulate supply chain investment
• Promoting workforce training and skills development
• Addressing permitting bottlenecks through regulatory reforms
• Promoting a just energy transition to ensure equitable benefits for all stakeholders
• Advocating against prescriptive localization requirements or restrictive trade practices

Supply Chain Management

Responsible Procurement

• Advocating for fair pricing and improved market design
• Promoting collaboration and partnerships across the supply chain
• Encouraging investment in domestic manufacturing capacity

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting wind farm operations

Transition Risks

• Policy uncertainty and changes in market conditions
• Competition from other renewable energy technologies

Opportunities

• Increased demand for wind energy due to climate change mitigation efforts
• Development of new technologies and innovations in wind energy

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 13 (Climate Action)

Wind energy contributes to these goals by providing clean energy, creating jobs, and reducing greenhouse gas emissions.