In fiscal year 2025, the World Bank Group directed 48% of its total lending — $39.2 billion — to projects with climate co-benefits. The target it had set for itself was 45%. It was not failing to hit the goal; it had already exceeded it by three percentage points. On 29 June 2026, the institution announced that it was retiring both the 45% target and the predecessor 35% target from its Climate Change Action Plan. The CCAP itself will continue, extended indefinitely. The number against which performance was measured will not.
The pressure came from Washington. The Trump administration, through US Treasury Secretary Scott Bessent, had argued since April 2026 that the 45% climate co-benefits target was "distortionary, nonsensical and arbitrary" and that it moved the bank away from its core mission of poverty reduction and economic growth. The US is the World Bank's largest shareholder and holds effective veto power over significant institutional decisions. Nineteen of the bank's twenty-five largest shareholders had signed a letter in support of preserving the targets. France made a last-minute public appeal at the Hamburg Sustainability Conference. Neither was sufficient. The bank's statement on 29 June announced the extension of the CCAP alongside the retirement of its defining metric.
The World Bank did not abandon its climate work. Individual arms of the institution retain their own climate targets — the International Development Association, the bank's fund for the poorest countries, maintains a 45% climate target through its current replenishment cycle, which runs to 2028. The bank will continue to count and report climate co-benefits for the vast majority of its activities. Bank officials have said that some projects will simply be redesigned and approved under a development lending framework — and that the underlying portfolio may not change dramatically in the near term. The Economist, in an analysis published this week, noted that the bank had already committed to providing $120 billion annually by 2030 alongside other multilateral development banks at COP29 — and that dropping its own fixed lending target places significant strain on its ability to make credible commitments toward that figure.
What is most significant about this development is not the immediate portfolio impact — it may be modest — but what it signals about the durability of voluntary institutional climate commitments under political pressure. The World Bank exceeded its target. It was removed anyway. The signal this sends to other multilateral institutions, to sovereign governments that use MDB climate finance targets as planning assumptions, and to private investors who reference multilateral ambition as a floor for climate capital allocation, is not benign. If commitments can be retired when inconvenient — even when they are being met — then the benchmark function of those commitments is compromised, not just for the World Bank, but for the system of multilateral climate accountability more broadly.
For asset managers with sovereign or quasi-sovereign exposure to MDB-linked instruments, this is a governance risk signal worth incorporating into ESG monitoring frameworks. For corporate sustainability teams that reference multilateral climate finance in their transition planning narratives or their CSRD financial-effects disclosures, the reduction in multilateral ambition at the headline level is a material external factor. The number was dropped. What it measured did not stop mattering.
Sources: World Bank drops climate finance target — Carbon Brief Q&A Trump pressure forces World Bank to ditch climate targets — The Economist World Bank abandons 45% target — Down To Earth