EBRD Plans to go Mostly Green by 2025
The European Bank for Reconstruction & Development (EBRD) has published its first report on the steps it is taking to become a majority green lender, it said October 14.
It says it is following the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and that the report is part of the process of aligning its metrics and disclosures relating to climate risks and opportunities.
The TCFD covers disclosure in four key areas: governance; strategy; risk management; and metrics and targets. The report also spells out the EBRD’s ambitions. It is carrying out a pilot to examine the impact and changes needed to fully implement TCFD’s growing disclosure requirements.
The EBRD said it would increase its climate-related activities. "We have a clear mandate and a strong balance sheet to do this. While we will not hesitate to take the necessary investment risks, we need to do this in an informed way. The TCFD’s recommendations provide a roadmap for this journey and we are committed to following it.”
The TCFD was established in 2015 by the Financial Stability Board, an international body under the auspices of the G20 and dedicated to promoting global financial stability. It aims to develop guidelines for voluntary climate-centred financial disclosures across industries.
Set up in 1991 in the aftermath of the Cold War, the EBRD already invests or lends to enterprises in many sectors in the former Soviet bloc, the Balkans and other regions lagging the rest of the European Union. It is a minority shareholder in Black Sea Oil & Gas' project offshore Romania which is yet to produce gas, for example.
It is owned in part by the European Investment Bank, which has said it will stop lending to fossil fuel projects by the end of next year, making it harder for some energy supply projects to finance the switch from coal to gas. Observers have called this decision short-sighted.