Measuring Alignment with the Paris Agreement and Financial Risk in Financial Markets

Implementing organization:    Duration: 07/2018 - 06/2021 Main counterpart: Asociación Mexicana de Administradoras de Fondos para el Retiro (AFORES), Asociación Mexicana de Instituciones Bursátiles (AMIB) IKI area: Mitigación







Initial situation 

The project responds to the Paris Agreement’s objective of aligning financial flows with global climate goals by developing and disseminating assessment frameworks for alignment with 2°C scenarios to at least 100 financial institutions with investments in emerging-market countries, as well as by developing an open-source framework that can be adopted by other actors.

The project will enable policymakers to measure the alignment of their capital markets with a 2°C scenario and gain access to an accountability framework for domestic investors. In addition, the project supports the development of an open-source tool for analyzing climate change-related financial risks.

The tools and outreach activities developed over the course of the project will create the necessary infrastructure for investors and banks in partner countries to measure, free of charge, the alignment of their portfolios with a 2°C scenario and access climate risk assessment tools. At least 40 risk assessments for partner countries are expected to be provided free of charge under the project, along with 100 alignment tests against a 2°C scenario. The project is part of the IKI COVID-19 response package.

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