The World Bank announced a policy shift regarding its climate finance commitments, dropping both its 45% climate finance target and the previous 35% goal it had replaced. The decision came after months of pressure from the US Trump administration, which took office in 2025 and has opposed international climate cooperation efforts.
The multilateral development bank, headquartered in Washington and supported by 189 member governments, distributed $39.2 billion in climate-related funding during 2025 alone, making it the world’s largest provider of climate finance to developing nations. When World Bank president Ajay Banga announced the 45% target in 2023, it represented an ambitious scaling-up from a previous 35% goal and resulted in climate finance more than doubling from $17.2 billion in 2020. The bank exceeded its 2025 target with climate-related projects comprising 48% of total funding that year.
Despite abandoning the numerical targets, the World Bank preserved its climate change action plan (CCAP), which was set to expire in July. Major developed-country shareholders, particularly from Europe, joined with nearly 100 developing nations to advocate for maintaining a climate framework. According to reports, 19 of 25 board directors affirmed the need for both a plan and a target, while the US, Russia, Kuwait and Saudi Arabia opposed the goals. The compromise extended the CCAP indefinitely while eliminating specific percentage targets and authorizing an independent evaluation of the plan.
Experts remain divided on the practical impact of the decision. Some note that the World Bank indicated climate finance would remain driven by client demand from recipient countries, with developing nations consistently expressing support for renewable energy investments. Research found 79% of developing-country officials polled wanted multilateral development bank investment in solar projects. However, observers acknowledged the symbolic significance of abandoning quantitative climate goals from an institution previously positioned as a climate champion.
The outcome carries implications for global climate finance targets, including the $300 billion annual commitment developed nations pledged by 2035 under the Paris Agreement. The World Bank is expected to provide approximately half of the $120 billion in climate finance that multilateral development banks committed to delivering by 2030, making its direction critical to achieving international climate finance objectives.