By Vanora Bennett
Multilateral development banks (MDBs), including the European Bank for Reconstruction and Development (EBRD), have agreed on a set of common principles for tracking nature-positive finance, which are expected to help guide the development and implementation of their respective technical frameworks and internal methodologies.
The announcement was made at the COP28 United Nations Climate Change Conference in Dubai, United Arab Emirates, during Nature day.
Signatory MDBs include the EBRD, the Asian Development Bank (ADB), the African Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the Caribbean Development Bank, the European Investment Bank (EIB), the Inter-American Investment Bank Group (IDB), the Islamic Development Bank (IsDB) and the World Bank Group.
At COP26 in 2021, 10 MDBs signed a joint statement on Nature, People and Planet, which recognises that tackling poverty, climate change and the drivers of nature loss are inextricably linked. It also affirms their commitment to mainstream nature into their analysis, assessments, advice, investments and operations by 2025.
Under this statement, the MDBs have now defined a set of common principles for tracking nature-positive finance that can be used by each MDB and that may be informative for other investors (including, but not limited to, capital markets and domestic public budget holders).
The common principles define nature-positive finance and the eligibility criteria for identifying and tracking it. The principles also make it easier to compare MDBs’ respective screening and tracking processes, including communicating on financial contributions to nature-positive outcomes.
“These common principles are a milestone in our joint efforts to scale up nature action,” explained EBRD Director, Environment and Sustainability Adonai Herrera-Martinez. “They are an important step towards recognising projects that will not just provide tangible benefits in the protection, recovery and sustainable management of ecosystems, but that will also enable us to track nature-positive finance and, ultimately, the positive impacts of our projects on nature.”
As part of the work to establish these common principles, MDBs have been developing a list of eligible activities that could be used for screening. The list combines elements from various taxonomies already in use or in development, and takes into account the rapidly changing landscape of initiatives underway by relevant actors. Some MDBs are expected to start piloting the use of the common principles and taxonomy within their own tracking methodologies in 2024, while at the same time developing a more comprehensive nature-positive taxonomy.
