Italy has markedly increased its climate ambition in recent years, with the Italian Climate Fund (ICF) emerging as a major driver of its international climate action. The ICF (EUR 4.4 billion over 2022-2026) is managed by CDP and primarily finances mitigation and adaptation projects in agriculture, energy, transport and water infrastructure. Projects to protect biodiversity and combat desertification are also included. It applies Rio marker screening, assesses expected climate impacts ex ante and ex post, and requires consistency with partner countries’ climate strategies. The ICF’s structure, combining grants, loans, blended finance and technical assistance, provides a strong basis for supporting Paris Agreement-aligned transitions in partner countries, particularly in Africa where over half of ICF projects are concentrated. In line with the DAC Declaration [OECD/LEGAL/0466] and the United Nations Framework Convention on Climate Change (UNFCCC) pillars, Italy has also strengthened engagement on loss and damage, including a EUR 100 million pledge to the new Fund for Responding to Loss and Damage. Italy’s overall climate finance portfolio also reflects a strong focus on LDCs and Small Island Developing States (SIDS) across both bilateral and multilateral channels.
Beyond the ICF, Italy has taken steps to strengthen climate mainstreaming across its development co‑operation tools. AICS requires Rio marker screening for all operations and applies a two-stage process combining compliance checks and the integration of climate objectives, supported by thematic review from headquarters. Italy’s climate-finance reporting framework follows UNFCCC and EU requirements, with AICS responsible for validation and quality control of all climate-relevant financial data reported to the DAC. Italy has also endorsed the Locally Led Adaptation (LLA) principles, introduced a new adaptation performance review tool, and advanced targeted adaptation initiatives such as support to early warning systems and climate-resilient agriculture. Italy continues to play an active role across the Rio Conventions, including a leading position under the United Nations Convention to Combat Desertification (UNCCD) and sustained engagement on biodiversity, which it increasingly seeks to integrate into a coherent climate-environment portfolio. Multilateral partnerships remain a core strength, including support to UNFCCC COP28 outcomes, the Fund for Responding to Loss and Damage, the Green Climate Fund, the Global Environment Facility, the Climate Investment Funds, the Global Shield, and long-standing collaborations with the World Bank’s Energy Sector Management Assistance Program (ESMAP), the Promoting Africa’s Green and Climate Resilient Development (AGREED) programme and the United Nations Industrial Development Organisation (UNIDO).
Italy is also contributing to broader global processes aimed at Paris Agreement alignment. Within Team Europe, it participates in joint programming discussions linked to the Global Gateway, and it plays a leading role in the coffee-climate nexus through the Team Europe Initiative (TEI) on Coffee in Africa, which embeds climate resilience at the core of value chain development. Domestically, Italy’s updated National Sustainable Development Strategy and whole-of-government emphasis on ecological transition offer a supportive framework for international alignment.
CDP applies sustainability sector policies, including exclusion criteria and climate-alignment requirements, across both its own financing and the third-party resources it manages, including the Italian Climate Fund. System-wide Paris Agreement alignment remains incomplete, however, and there is limited evidence of a unified methodology across all actors for assessing whether ODA is consistent with partner countries’ nationally determined contributions (NDCs), national adaptation plans (NAPs) or long-term decarbonisation pathways. Greater clarity on how these approaches are applied and co‑ordinated across all actors would help ensure consistent alignment, in line with the DAC Declaration.
Planning tools pose an additional constraint. The absence of up-to-date country strategies and slow PPPD cycles limit the integration of climate objectives into multi-year programming, particularly in sectors where climate risks are high (agriculture, energy, water, infrastructure). Co‑ordination challenges across ministries further risk fragmentation, as climate-relevant activities may take place in parallel without systematic alignment with MAECI/AICS planning or partner country climate goals.