A Framework for Alignment with the Paris Agreement: Why, What and How for Financial Institutions?

Expertise Level
Resource Type
Guidance and Frameworks
Developer or Source
I4CE (Institute for Climate Economics)

Since the adoption of the Paris Agreement, financial institutions and other economic actors have taken commitments to ‘align’ their activities with the goals agreed to by national governments in 2015. A growing body of literature from both the research community and practitioners has emerged on ‘alignment’ with the Paris Agreement goals – but to date no overarching framework has been proposed to define what it means and implies in practice.

This report proposes a framework to align activities with the Paris Agreement for all economic actors. It considers how the Paris Agreement’s long-term goals for adaptation, mitigation and finance and the process laid out to achieve them shifts the framing of climate action. Moving from theory to practice, the paper applies the framework to the case of financial institutions to help understand the implications of aligning with the Paris Agreement and integrating these considerations at the strategic and operational levels.