COP27 - SHARM EL-SHEIKH (06 -18 November 2022)
Islamic Development Bank (IsDB) Group at COP27
The Conference of the Parties (COP) is the supreme decision-making body of the United Nations Framework Convention on Climate Change. All States that are Parties to the Convention are represented at the COP.
Key Task of COP
A key task for the COP is to review the national communications and emission inventories submitted by Parties. Based on this information, the COP assesses the effects of the measures taken by Parties and the progress made in achieving the ultimate objective of the Convention.
The COP meets every year, unless the Parties decide otherwise. The first COP meeting was held in Berlin, Germany in March 1995.The COP Presidency rotates among the five recognized UN regions - that is, Africa, Asia, Latin America and the Caribbean, Central and Eastern Europe and Western Europe and Others. There is a tendency for the venue of the COP to also shift among these groups.
The Egyptian Presidency anticipates the following for COP27:
- To move from negotiations and planning to implementation.
- To harmonize global efforts on climate change to meet global pledges and commitments as words must be turned into action
- To underline that urgent actions and strengthen implementation in line with creating a resilient planet
- To stress collective efforts to combat the adverse impacts of climate change to secure a sustainable future for all.
IsDB Group Business Operations Alignment with COP27 Presidency Priorities
1) Finance for Adaptation:
- A survey administered across IsDB Group’s 57 member countries (MCs) reveals that 97% of IsDB Group clients have specifically identified climate adaptation as a priority area.
- In 2021, 35% of our total commitment at IsDB was for climate adaptation across multiple sectors. In the last 5 years, an average of 55% of the Bank’s total commitments to climate action were dedicated to climate adaptation. We do anticipate doing more in the years ahead.
- For climate adaptation investment, the major challenge has often been a lack of investable/bankable projects. At IsDB Group, we understand this challenge and thus have set up capacity enhancement programs for development of climate resilient investments to support thematic and sector department/agencies/ministries in member countries on approaches to develop climate resilient investments, appealing to both public and private financiers.
2) Mobilization of Finance:
- IsDB Group encourages and supports the climate ambition of its clients and efforts towards green economy by all available means.
- IsDB is committed to a 5-Year Climate Action Plan from 2020 to 2025; with an ambitious climate finance target of 35% of total commitments by 2025.
- In 2021, 31% of the Bank’s total approvals were for climate action including adaptation and mitigation activities.
- As the world largest South-South development Bank, the IsDB Group continues to provide and mobilize climate finance resources through non-traditional sources of financing for climate action such as green sukuk and exploring other labelled sukuk including climate resilience sukuk for our clients. The Bank has had issuance of US$5 billion worth of sukuk (green and sustainable sukuks) in the last 30 months.
- To increase access to climate finance, IsDB Group continues to support its member countries through resources mobilized from specialized climate funds such as the Green Climate Fund (GCF) for readiness programs to enhance capacity and develop investable/bankable projects, the International Climate Initiative of the Ministry of Environment, Nature Conservation and Nuclear Safety of Germany which provide grants to support climate and biodiversity conservation projects, as well as initiatives such as the NDC Partnership to help in increasing climate ambition through NDC implementation and long term climate strategy support.
- IsDB Group strongly believes that innovative and alternative financing instruments play vital role to scaling up climate finance across the globe.
IsDB’s Paris Alignment Commitment to Member Countries:
- In June 2022, at the IsDB Group’s Annual Meetings in Sharm El Sheikh, Egypt, IsDB President and Group Chairman, H.E. Dr. Muhammad Al Jasser, while addressing the official opening ceremony of the Group’s 2022 Annual Meetings in Egypt, announced the Bank’s target of fully aligning its sovereign operations with the objectives of the Paris Agreement by end of 2023.
- The MDB’s Paris alignment work would further help the Bank define areas where climate finance and development resources need to be directed and prioritized in the context of recovery and restart, and how private sector capital may be mobilized for recovery and long-term plans in line with climate goals.
- Through its Paris alignment commitment, IsDB’s operations will be consistent with and support the implementation of its member countries’ Nationally Determined Contributions as well as the development and implementation of ambitious long-term climate strategies to help make their economies climate-resilient while moving towards low-carbon development, through a fair and just transition path.
Why is COP27 Important to Financiers such as IsDB Group?
We are at a juncture when financial institutions such as the IsDB are expected to develop tailored financial instruments and tools for climate action as well as financing modalities fit-for-purpose to help member countries actualize their commitments and address the challenges climate change poses within the broader context of sustainable development.
Beyond finance is the role that financiers such as IsDB could play in intensifying current efforts to support member countries in areas of capacity development for climate action and upstream engagement that allows for effective mainstreaming of climate risks and low carbon development opportunities within member countries’ partnership plans and strategies.
The collective efforts of international financial institutions are necessary and crucial, if we are to secure a sustainable future for all.
IsDB Group Participation at COP27
COP 27 in Sharm El-Sheikh in Egypt provides an excellent opportunity for IsDB Group departments, entities, and partners to highlight their work and initiatives on climate action.
This opportunity also highlights IsDB Group’s climate initiatives and strategic plans for the coming years especially in light of the realigned strategic direction of the Bank. The Bank’s delegation at COP27 consists of all departments and entities of IsDB Group.