World Bank drops 45% climate finance target while extending climate action plan
The World Bank Group has confirmed it will retire its target of directing 45% of its financing towards climate-related projects, marking a significant shift in its approach to measuring climate action while extending its existing Climate Change Action Plan (CCAP).
The decision comes after months of scrutiny over the Bank’s climate spending and follows reports that the move was made amid pressure from the United States under the Trump administration. Despite removing the headline climate finance target, the World Bank stressed that climate action will remain a core part of its development strategy and continue to be driven by the priorities of borrowing countries.
In a statement, the World Bank said its work on climate would remain “firmly client driven”, supporting countries in delivering their own national development plans and Nationally Determined Contributions (NDCs) under the Paris Agreement. The Bank said the existing Climate Change Action Plan had successfully embedded climate considerations across its operations and would therefore be extended.
As part of the changes, the World Bank will also retire the 35% climate target contained within the Climate Change Action Plan. Instead, it plans to shift its performance framework away from measuring financial inputs towards assessing development outcomes.
The Bank said future progress would be judged by the results achieved for client countries rather than the proportion of funding classified as climate finance. It added that outcomes would continue to be shaped by countries’ own climate ambitions and supported through its expanding knowledge and advisory services.
An independent evaluation of the Climate Change Action Plan will be carried out by the World Bank’s Independent Evaluation Group (IEG) following a request from the Board of Executive Directors. The review will assess the effectiveness of the framework and help inform the Bank’s future climate strategy.
Although the climate finance targets are being removed, the World Bank said it will continue to monitor and publicly report two key climate indicators through its institutional scorecard: net greenhouse gas (GHG) emissions and the number of people benefiting from improved resilience to climate risks.
The institution also confirmed it would continue reporting climate co-benefits for all projects, alongside quarterly and annual portfolio updates, maintaining transparency around climate-related investments and contributing to joint reporting efforts with other multilateral development banks.
Looking ahead, the World Bank said it will explore new ways to strengthen its engagement on climate adaptation, nature and pollution as part of its evolving development agenda.
The changes signal a move away from measuring success through climate finance volumes alone, with the World Bank placing greater emphasis on development outcomes while maintaining climate action as a central element of its support for developing countries.
