World Bank drops climate finance targets, extends policy framework

WASHINGTON: (Web Desk) – The World Bank has extended its climate change policy framework indefinitely while removing its targets for the share of financing required to deliver climate-related benefits, marking a significant shift in its climate strategy.

In a statement issued on Monday, the World Bank said it would move from measuring inputs to focusing on development outcomes to maximise the impact of its projects. As part of the change, it will retire its target of allocating 45 percent of financing to climate co-benefits and the 35 percent goal outlined in its Climate Change Action Plan.

The decision comes after the United States, the bank’s largest shareholder, called for an end to climate financing targets. In April, US Treasury Secretary Scott Bessent argued that such targets created inefficiencies and diverted the institution from its core development mission.

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The World Bank said future climate-related work would be driven by the priorities and demands of client countries rather than fixed financing targets.

According to the bank, climate-related projects accounted for 48 percent of its financing in 2025, representing approximately US$50.8 billion. It added that it would continue reporting on net greenhouse gas emissions and the proportion of projects delivering climate benefits.

The World Bank’s climate programmes mainly support developing countries through renewable energy investments, climate resilience projects and technical assistance to help communities adapt to the growing impacts of climate change.