Climate Action Guide

Climate Action Guide

An educational tool for FI to learn about impact & scientific evidence

Why care about impact?

Large investment is needed to reach the Paris Agreement objectives. According to the IPCC, annual investments of 2.4 trillion USD over the time period of 2016 to 2035 are needed to fund the global transition to carbon-free energy systems. In 2016, investments to realize this transition totalled 455 billion USD, 230 of which came from the private sector (financial and corporate institutions). Public funding alone will not bridge this gap. Financial institutions carry significant influence over their investees and thus have the power to not only foster growth but also trigger critical transformations. Furthermore, financial institutions are heavily invested in carbon intensive sectors and must play their part to create a green future.

Financial institutions can and want to play a role. Financial Institutions have a crucial role to play in fostering the growth of low-carbon industries and the transformation of carbon-intensive ones, but how will they do this? Many financial institutions, supervisors and NGOs support portfolio alignment as the primary investment strategy to contribute to the fight against global warming.

Existing tools are not sufficient to measure impact in the real economy. Alignment tools today, however, do not (yet) tell you whether emission reductions in the real economy have actually taken place, and whether you as a financial institution have contributed to that through your actions. When communicating and interpreting results of an alignment analysis, it is therefore important to be transparent about this limitation. If the financial sector is to live up to the hope that it can actively contribute to decarbonizing the economy, it is necessary to look beyond alignment and track the drivers of greenhouse gas emissions in the real economy and track the impact of the climate actions of financial institutions.

What is the Climate Action Guide?

The Climate Action Guide helps financial institutions identify climate actions that positively contribute to reaching the goals of the Paris Agreement. It provides information about the mechanisms and existing level of evidence for impact of climate actions as well as the consequences of implementing climate actions. The Climate Action Guide also identifies opportunities for collaboration, either through existing collective initiatives or directly connecting with other financial institutions. Finally, the guide contains educational resources to facilitate understanding of the theoretical concepts.

Evidence Repository

The Climate Action Guide is based on the most recent scientific articles assessing the effectiveness of financial institutions climate actions, most of which included in a meta-study done by Kölbel et al (2020). The collection of articles called "Evidence Repository“ can be found here:

Funding information


This project is part of the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports this initiative on the basis of a decision adopted by the German Bundestag. The views expressed here are the sole responsibility of the authors and do not necessarily reflect the views of the funders.

The InvECAT project has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 785087