World Bank drops 45% climate lending target

The World Bank has formally ended its quantitative target for climate-related lending, a significant policy shift following sustained pressure from the United States. The institution announced on Monday, June 29, that it would retire its goal of directing 45 percent of annual lending to projects with climate co-benefits, a target that was set to expire on Tuesday, June 30. Instead, the bank will extend its broader Climate Change Action Plan framework but pivot to focusing on development outcomes rather than input-based quotas.

This decision marks a departure from the climate finance ambitions championed during the Biden administration and adopted in 2023. The bank had not only met but exceeded the 45 percent target, allocating 48 percent of its financing, or approximately $39.2 billion, to climate-related projects in the last fiscal year. The previous target had been raised from 35 percent, reflecting a period when climate and development goals were increasingly integrated.

The policy change follows explicit criticism from the Trump administration. U.S. Treasury Secretary Scott Bessent has repeatedly argued that the bank's focus on climate financing targets was "myopic" and...