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. Evidence-based policymaking and‑investment decisions towards such alignment need to‑be informed by robust assessments. To support such efforts, this inaugural OECD Review on Aligning Finance with Climate Goals brings together best-available evidence on three core questions: (i) How is climate alignment of finance assessed? (ii) What do we know about current finance flows and‑stocks? (iii) What evidence exists on the role of financial sector policies and actions? The report identifies actions policymakers and financial sector stakeholders can take to improve the evidence base and better align finance with climate goals. It further sets out good practices to prevent greenwashing and inaccurate claims of climate alignment.
This work was conducted under the OECD Working Party on Finance and Investment for Environmental Goals (WPFIEG) as part of the Sustainable Finance 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 improving the assessment of the consistency and alignment of finance with climate policy 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 Bentje Böer (independent consultant), Angela Zha (OECD), Paola D’Orazio (Chemnitz University of Technology) and Coline Pouille (OECD). Ria Sandilands 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 colleagues at various stages of advancement: Geraldine Ang, Valentina Bellesi, Riccardo Boffo, Miguel Cardenas Rodriguez, Bopha Chhun, Joseph Cordonnier, Caio De Oliveira, Chiara Falduto, David Gaukrodger, Sirini Jeudy-Hugo, Yuval Laster, Elisa Lanzi, Etienne Lepers, Virginie Marchal, Catrìona Marshall, Ariola Mbistrova, Mathilde Mesnard, Hugh Miller, Benjamin Michel, Daniel Nachtigall, Isabella Neuweg, Kilian Raiser, Dirk Röttgers, Mohammed Saffar, Toon Vandyck, Stephanie Venuti, Isabelle Ynesta, and Robert Youngman.
The authors are also grateful to the following organisations for sharing data and insights to inform specific sections of the report: BloombergNEF, Climate Policy Initiative (CPI), MSCI, Net-Zero Data Public Utility (NZDPU) and S&P Global.
Finally, the OECD Secretariat would like to thank OECD member countries providing funding to support this body and area of work (Austria, Canada, the European Union, Germany, Italy, Norway, Switzerland, the United States of America) 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 present report.