Defining and initiating a definitive scheme for footprinting the impact of development investments (DIFS)

The aim of DIFS is to demonstrate the potential of, and to provide confidence in the viability of climate related investment footprinting. The project aims, in the long term, at developing and deploying climate investment footprinting at scale. 

Innovation potential and Demand-side need

Finance from multilateral development banks (MDBs) will be critical to achieving the aims of the COP21 Paris Agreement. They have pledged to boost climate finance in developing countries to more than US$28 billion per year by 2020 but currently have no processes in place to assess whether the impact of their climate finance is doing enough to close this gap.  Approaches such as the IFI GHG Accounting Harmonisation Framework, and the Climate Bonds Standard do not define an adequate approach for MDBs.

The Carbon Trust’s unique experience and expertise in carbon footprinting means that they can define an appropriate set of boundaries and build a tool which is accurate yet easy for MDBs to use consistently, to allocate capital to those investments which have the highest reduction in GHG emissions. Decision makers and investors in MDBs would be able to predicate key investment decisions on actual climate impacts, hence unlocking finance to drive the climate change mitigation and development finance hand-in-hand. 

Potential Climate Impact

This project helps to overcome barriers to reducing GHG emissions, by enabling MDBs to allocate their investment funds most accurately to the best overall climate mitigation impacts. While the focus of this project is on mitigation, there is the potential for footprinting investments to extend to adaptation investments too which could have a significant positive climate change impact by helping funding to flow to adaptation projects.

Name
Defining and initiating a definitive scheme for footprinting the impact of development investments (DIFS)
Project Type

Demonstrating the potential of a footprinting tool for multilateral development banks

Lead Partner

The Carbon Trust

Project Partners

The Carbon Trust

Project Manager

Martin Barrow, The Carbon Trust

Project Location

UK

Project Start Date
December 2016
Theme

Decision Metrics and Finance (DMF)