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  • 03.11.2025
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Ahead of the COP30 climate summit in Brazil, this briefing examines the growing role of multilateral development banks (MDBs) in climate finance, where not all that glitters is gold.

Despite long-standing civil society criticism of the negative track record of MDB financing — including ongoing support for fossil fuels, lack of commitment to human rights, undemocratic governance structures, and increasing financial subsidies to the private sector — the power that MDBs wield over climate outcomes and finance flows continues to soar.

This briefing aims to give civil society, government negotiators, and journalists engaged in climate and environmental issues a short, accessible background on the latest developments around MDBs, the main criticisms of their approach, and how they impact climate finance delivery and the achievement of the Paris Agreement. It will go from specific to broad — starting with MDBs’ direct role in climate finance delivery, to their overarching ‘Paris alignment’, to their wider development agenda championing private finance de-risking over human rights.

MDBs are not fit for purpose to deliver climate finance, and major reforms are needed to make them ‘better’ in a meaningful, justice and rights-based way before making them ‘bigger’. This briefing gives key recommendations for reform, including:

  • Better accounting and transparency around what counts as ‘climate finance’;
  • Better quality of finance for countries that need it the most: more adaptation, to low-income countries, and less debt;
  • MDBs to align their climate finance with the Paris Agreement/1.5°C, close loopholes and exclude all fossil fuels;
  • MDBs to exclude all fossil fuels and instead bank on sustainable renewables;
  • Public over private interest for a people-centred, rights-based approach to development and climate action.
  • Better safeguards and stronger rights to ensure all MDB projects and policies meet the highest standards of consent, environmental protection, and women’s and Indigenous rights.

The briefing is available in English and Spanish.

Banner photo by Vugar Ibadov for UN Climate Change (Flickr CC BY-NC-SA 2.0).

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