Your Excellencies, distinguished colleagues, ladies and gentlemen. It’s an honour to address you today at this important discussion. Mobilizing ambitious commitments from a broad range of actors has been a real achievement of the One Planet process, and the World Bank is pleased to work in partnership with France and the UN on this effort.
I would like to commend France’s leadership not only in bringing business and finance players into the tent, but also for providing a forum for tracking progress on those commitments to achieve a low-carbon, sustainable economy.
We know that developing countries no longer have an opportunity to develop first in a high carbon-intensive way and then clean up and decarbonize later. There is the wake up call to do better and to do more, but for developing countries it is about shifting urgently and at scale to a long-term low carbon development path that will bring green, resilient and inclusive development, and go towards net zero.
That is why the World Bank Group has set a much more ambitious target of 35% of all our lending going towards climate finance in the next five years. Most importantly we will be working to support countries to integrate climate and development objectives, including through Country Climate and Development Reports which will become a core diagnostic for the WBG and inform engagements with clients.
This is the kind of paradigm shift embodied our Climate Change Action Plan for 2021-2025: moving from investing in "green" projects to greening entire economies, and from inputs to measuring impacts.
Delivering on climate and development and the required sector transitions, including transition out of fossil fuel to clean energy, will require technological breakthroughs, and funding at scale. This cannot only come from public sources, domestic and international, but it will need contribution of the private sector. There is a need to create robust pipelines of high impact climate projects that can meaningfully reduce Greenhouse gas emissions. This speaks to the country platforms Mark Carney talked about.
Getting the right policies in place is a first, critical step: from climate-proofing a financial system, to regulating vehicles or setting energy efficiency guidelines, to national climate plans, whether NDCs or long-term strategies.
Setting a clear low-carbon direction of travel most importantly sends a signal to the private sector. Our private sector arm, IFC, is deploying innovative platforms, creating and strengthening local capital markets, and greening domestic financial sectors. This will help generate opportunities for transformative projects and private capital to flow at scale for both mitigation and adaptation activities.
The One Planet Data Hub will provide a one stop data base that will help monitor private sector commitments, provide transparency and accountability, and measure the efforts of the private sector in the green transition.
We also recognize that establishing global sustainability and climate-focused taxonomies, disclosure frameworks, and reporting standards will be critical to ensuring that private-sector and green finance commitments will actually be met, especially with respect to investments in developing countries.
In this context, we are pleased to see the progress made on what Mark Carney is calling the plumbing of the system. Let me mention the international corporate sustainability reporting standards by the International Financial Reporting Standards (IFRS) Foundation, which build on the framework put forward by the Taskforce on Climate-related Financial Disclosures (TCFD).
With COP26 starting in Glasgow in just a few days, and as countries seek sustainable pathways out of the disruption caused by the COVID-19 pandemic, it will be important to ensure that these transparency and monitoring tools do not present unintended constraints on emerging market capital flows. Developing countries’ needs should be taken into consideration in designing these standards; and we are committed to helping them to implement the standards once they are finalized.
Let me end with a reminder that people must be at the center of climate action. Global inequality is growing; the share of global wealth in low-income countries is below 1 percent despite being home to about 8 percent of the world’s population. More than a third of low-income countries have experienced declining wealth per capita since 1995, and climate change threatens to exacerbate these trends. We need to tackle climate change and development together addressing inequality wherever we see it.