IFC is a leading financier of clean and efficient energy for developing countries and a top issuer of green bonds supporting climate-smart projects in emerging markets. It has explicitly tracked its climate-related financing since fiscal 2005, has measured the greenhouse gas (GHG) emissions of its investment portfolio since fiscal 2010.
To qualify as climate-related, IFC projects must either: (a) reduce emissions of greenhouse gases into the atmosphere; (b) remove greenhouse gases from the atmosphere; or (c) improve resilience against climate change risks.
Often, an entire IFC project can be defined as climate-related or climate-smart. But in some cases, the climate-related component will be a smaller part of a larger project. For tracking and reporting purposes, the climate-related components of IFC projects are measured as a pro-rata share of the financing provided. This helps quantify the share of IFC’s investments going beyond “business as usual” to address and respond to climate change – in addition to the development impact of the projects.
IFC has set a goal for 20 percent of its long-term financing to be climate-related by fiscal 2015.
The emissions impact of IFC’s portfolio is measured project-by-project and across the business – including real sector investments, advisory services and initiatives through financial intermediaries.
IFC’s GHG reduction accounting methodology was designed to be as transparent as possible so that its clients and partners can understand and replicate them. It was first piloted in IFC’s real sector investments in fiscal 2012 and then extended to advisory and financial intermediary work in fiscal 2013.
In fiscal 2014, IFC’s commitments reduced at least 5.5 million metric tons of greenhouse gas emissions. This is equivalent to taking more than 2 million cars off the road or recycling more than 1.75 million tons of waste.