The World Bank just made a decision that affects how billions in public finance gets spent on climate action. After support expressed by a majority of the Bank’s biggest shareholders and client countries and nearly 100 civil society organisations demonstrated it has agreed to extend its Climate Change Action Plan (CCAP). Despite pressure from the US, the Bank’s largest shareholder, to scrap the plan altogether, the extension will be accompanied by an independent review.
The plan remains alive but targets for expenditure on climate finance have been removed. By removing the 45% target for climate finance the Bank is no longer committing to dedicate a minimum share of its financing to climate action. The loss of this target means the World Bank’s climate commitments have been weakened, bowing to a US administration that has made clear it does not accept the scientific consensus on climate change, even as the deepening climate crisis causes irreversible harm around the world and climate impacts threaten development goals more severely than ever. It also means rich countries can no longer realistically point to the World Bank as fulfilling their climate finance fair share as outlined in the New Collective Quantified Goal on climate finance (NCQG) agreed at COP29 in 2024.
The vague update issued by the Bank leaves key questions unanswered, including the timeframe of the extension, and how it will improve its focus on the impact of its climate work. Lack of clarity around the timeline of the Independent Evaluation Group’s review, and how this will inform the development of future climate finance commitments, creates additional uncertainty about the future of the Bank’s climate work.
Quotes:
Haneen Shaheen - MenaFem Movement (Egypt): “Climate action is not an optional add-on to development-it is the foundation of it. Any attempt to dilute the World Bank's climate commitments while communities face escalating debt, displacement, and climate disasters is a step backwards. The Global South needs transformative, accountable public finance, not diluted frameworks and disappearing targets.”
Jon Sward, Bretton Woods Project (UK): “After a long and difficult negotiation among World Bank shareholders, the Bank’s Climate Change Action Plan has survived, but despite the efforts of other board members, US pressure has weakened the Bank’s climate work with the retirement of the 45% climate finance target. The Bank must clarify how the IEG’s review will shape the development of the CCAP going forward, and how global civil society - who have been shut out of this process - will be consulted. While the release is light on detail, it does clarify that the Bank will continue to report on climate finance, and will deepen its focus on measuring the impact of its climate work - which is welcome. Civil society will be closely monitoring how the CCAP extension progresses with a view to preventing further retrogression.”
Rajneesh Bhuee, Recourse (Kenya): “We welcome the extension of the World Bank's Climate Change Action Plan, though the announcement leaves critical questions unanswered. The Bank's decision to remove its minimum climate finance target is disappointing, at a time when climate impacts are undermining development gains across the Global South. The independent review must not become an exercise in lowering climate ambition. It should include meaningful consultation with civil society in borrower countries and deliver a stronger plan for the Bank to support clean, sustainable economic development that benefits people rather than locking countries into costly fossil fuel dependence.”
Fiza Qureshi, Big Shift Global (Pakistan): “Extending the Climate Change Action Plan is a positive step, but the statement remains silent on one of the defining challenges of our time: ending support for fossil fuel expansion. Without clear commitments to phase out fossil fuel finance, prevent LNG expansion, avoid stranded assets, and align all finances with a 1.5C pathway, the World Bank risks falling short of the climate leadership the world urgently needs.”
Ute Koczy, Urgewald (Germany): “The CCAP remains, but climate protection is taking a back seat at the World Bank. Particularly disappointing is the retirement of the CCAP’s climate targets, which were put in place to secure a minimum level of climate finance. This is a disgrace given the rapid rise in global temperatures.”
For further comment or interview please contact Sophie Richmond srichmond@climatenetwork.org