Aligning finance with climate policy goals is crucial for-achieving net-zero greenhouse gas emissions and resilience to-climate change, as called for by Article 2.1c of the Paris Agreement. It can further reduce exposure to climate-related risks, increase economic resilience, foster innovation and enhance energy security. Evidence-based policymaking and-investment decisions towards such alignment need to be informed by robust assessments. To support such efforts, this second edition of the OECD Review on Aligning Finance with Climate Goals brings together best available evidence in three core areas: the implementation of climate‑related financial sector policy playbooks, the tracking of the climate alignment of financial flows and stocks, and developments in climate metrics used in the financial sector. This second edition updates trends from the first edition, addresses evidence gaps and displays further geographical granularity to highlight differences in approaches and opportunities. It identifies 14 actions policymakers can take to better assess and drive the climate alignment of finance and capture untapped transition investment opportunities.
This work was conducted under the OECD Working Party on Finance and Investment for Environmental Goals (WPFIEG) as part of the Finance and Investment for Environmental Goals output of the Programme of Work and Budget of the OECD Environment Policy Committee (EPOC). The analysis results from and contributes to a multi-year body of work designed to advance and share knowledge for assessing the consistency and alignment of finance with climate goals, including to inform finance-related information needs and discussions under the United Nations Framework Convention on Climate Change (UNFCCC).
The report was prepared by the Finance, Investment, and Global Relations Division within the OECD Environment Directorate. This publication was co-ordinated and co-authored by Jolien Noels, Economist/Policy Analyst, together with and under the supervision of Raphaël Jachnik, Finance for Climate Action Team Lead, with contributions from Giulio Mazzone (OECD Environment Directorate), as well as Angela Zha and Paola D’Orazio (independent consultants). Dominique Haleva (OECD Environment Directorate) provided editorial support.
The OECD Secretariat is thankful to delegates to the WPFIEG for comments on earlier versions of this report, and to delegates who participated in the Informal Reflection Group on Aligning Finance with Climate Goals and provided further feedback and suggestions in this context. This report also benefitted from comments and inputs from OECD and IEA colleagues at various stages of advancement.
Finally, the OECD Secretariat would like to thank OECD member countries providing funding to support this body and area of work (Australia, Austria, Canada, the European Union, Germany, Italy, Norway, Sweden, Switzerland) and in particular the German Federal Ministry for Economic Affairs and Climate Action (BMWK), which provided the bulk of the funding for the preparation of the report.