IFC's Work in Climate Business

As the largest development finance institution supporting the private sector in emerging markets, IFC is uniquely positioned to build new markets for climate business. We invest directly in climate-smart sectors, developing new de-risking and aggregation mechanisms, and engaging public and private sector stakeholders through international forums and working groups. In doing so, IFC is mainstreaming climate business in high-growth sectors - opening new markets in key areas such as clean energy, sustainable cities, climate-smart agriculture, energy efficiency, green buildings, and green finance.

IFC does not work alone. We collaborate directly with governments, the private sector, financial institutions, and other development banks. As part of the World Bank Group’s new Climate Change Action Plan, IFC is intensifying its work across sectors and regions. IFC will align 85% of new direct investments with the objectives of the Paris Agreement starting July 1, 2023 (FY24), and 100% of these investments starting July 1, 2025 (FY26). IFC is also developing a methodology in partnership with other MDBs to assess Paris Alignment for investments in financial institutions and funds. From now through fiscal year 2025, IFC will seek to increase its climate finance to 35% on average from our own account, up from 30% in fiscal year 2020, working to create markets and unlock private sector climate investment. We will also expand our work in the following areas: screening investments for climate risk, scaling up private sector climate finance for adaptation, and developing new approaches and business models to expand our biodiversity finance.