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 year 2005 and has measured the greenhouse gas (GHG) emissions of its investment portfolio since fiscal year 2010.
To qualify as climate-related, IFC projects must be coherent with the IFC Definitions and Metrics for Climate-Related Activities. Climate related projects 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 28 percent of its long-term own account financing to be climate-related by fiscal year 2020 and has approved its Climate Implementation Plan to 2020.
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 year 2012 and then extended to advisory and financial intermediary work in fiscal year 2013.
IFC’s commitments along fiscal years 2014 - 2016, represented greenhouse gas emissions reductions of 73.5 million metric tons per year. This is equivalent to taking 26.7 million cars off the road or recycling more than 23.38 million tons of waste.