Yellen of the U.S. Department of the Treasury pushes Development Bank to strengthen climate financing efforts Reuters

David Lauder

VENICE (Reuters)-US Treasury Secretary Janet Yellen said on Sunday that she would push the major multilateral development banks to “raise their climate ambitions” and speed up the timetable for supporting the Paris Agreement to reduce carbon emissions.

Yellen said at a press conference that development lending institutions, including the World Bank, need to increase their efforts to encourage more private sector climate-friendly investments.

In his speech at the G20 Climate Forum, Yellen said: “I plan to soon convene the heads of the Multilateral Development Bank to clarify our expectation that the Multilateral Development Bank will align its investment portfolio with the Paris Agreement and net zero targets as soon as possible.”

“We also hope that they will take measures to mobilize private capital more effectively so that developing countries can increasingly benefit from private sector commitments to support climate-related and sustainable investment,” Yellen said.

Yellen has a major influence on development lending institutions because the Treasury Department manages large US equity in these institutions.

The United States is the major shareholder of the World Bank and the Inter-American Development Bank, as well as one of the largest shareholders of the Asian Development Bank and the African Development Bank. It is not a member of the China-led Asian Infrastructure Investment Bank.

Yellen said that multilateral development banks have policy expertise, relationships and financial tools that can make a significant contribution to achieving climate goals.

“As the main source of official funding, multilateral development banks need to maximize their catalytic role in supporting countries seeking to combat climate change and take advantage of the economic opportunities of transitioning to a low-carbon economy.”

Yellen also stated that she is assessing the impact of climate-related risks on the financial system through the U.S. multi-regulatory Financial Stability Supervisory Board, which she chairs.

The Treasury Department is also seeking to improve the disclosure of climate risks to investors. Yellen said she works closely with domestic regulators and international partners to promote a consistent cross-border approach to such disclosure rules.