World Bank drops climate funding benchmarks, shifts focus to development outcomes

The World Bank on Monday decided to continue its climate change policy framework indefinitely but removed mandatory targets for the share of its financing that must deliver climate-related benefits, according to an official statement.

The bank said it would move away from measuring climate action mainly through funding inputs and instead focus on achieving measurable development outcomes.

“We will complete our shift from inputs to outcomes to maximize development impact,” the World Bank Group said, adding that it would retire the previous targets requiring 45% of financing to have climate co-benefits and the 35% target under its Climate Change Action Plan (CCAP).

The move comes after pressure from the United States, the World Bank’s biggest shareholder, where climate policy has shifted under President Donald Trump. Trump has repeatedly dismissed climate change concerns and promoted increased investment in fossil fuels.

In April, US Treasury Secretary Scott Bessent urged the World Bank to remove its climate finance targets, arguing that they created inefficiencies and distracted from the institution’s core development mission.

The World Bank said future climate-related efforts would be guided by the priorities and demands of borrowing countries. Its climate financing goals, introduced in 2016, have largely been achieved over the years.

According to World Bank data, 48% of its total financing in 2025 included climate-related benefits, amounting to around $50.8 billion.

The decision contrasts with findings from the Intergovernmental Panel on Climate Change, which states that human activities, especially the burning of fossil fuels such as coal, oil, and gas, are the main drivers of modern climate change.

Since returning to office for his second term, Donald Trump has pushed policies favoring fossil fuels and reduced emphasis on renewable energy and climate initiatives.

The World Bank said it will continue tracking greenhouse gas emissions linked to its operations and reporting the share of projects that contribute to climate goals.

The bank’s climate work mainly supports developing nations, which have contributed the least to global warming but face some of its most severe impacts. Its climate financing includes renewable energy projects, adaptation programs, disaster resilience measures, and technical support to help countries respond to climate risks.