The World Bank's Balancing Act Tips Downhill on Climate

How times change.

In 2023, World Bank President Ajay Banga signaled the beginning of a new era for the world's largest multilateral development bank, pledging to devote 45% of the Bank’s lending to climate-related projects by 2025. And in 2025, the World Bank Group (WBG) seemed to be living up to the commitment, spending a record $39.2 billion on climate finance. 

Hitting this number was no small feat. For the past two years, the World Bank has tried to walk a careful line: Keep climate action central to its mission, while staying on good terms with its most powerful member country, the United States, which has grown openly skeptical of climate science. 

On June 29, that balancing act tipped. The Bank announced it would continue with its Climate Change Action Plan (CCAP), but quietly dropped the 45% climate lending commitment. As well as sending all the wrong signals, the move effectively deprives Bank watchers of a critical metric for measuring if WBG climate spending matches its climate talk. Civil society isn't letting that go unnoticed.

The timing stung. After all, the world had just watched the WBG delivered a record $39.2 billion in climate finance in fiscal year 2025. By the WBG's count, 48% of all its investments were climate-related, beating its target. But, going forward, that target and the requirement to fund climate projects at a high level disappear. 

There was no mystery about who was behind the shift. At the Spring Meetings, US Treasury Secretary Scott Bessent called the CCAP's looming expiration "long overdue" and dismissed the 45% target as "distortionary," pushing funds where the market would otherwise never send them. Echoing the infamous previous World Bank president, David Malpass, Bessent went further, questioning whether scientists really agree that climate change is happening. 

The US position stood in stark contrast to the majority of the Bank’s board, with 19 of 25 executive directors going on record in October 2025 supporting the CCAP. Plus, a group of countries that borrow from the Bank, known as the G11+, pushed to keep the CCAP alive too. In the end, the CCAP survived. The target didn't.

Ahead of the decision, 93 civil society organizations from around the world sent a joint letter demanding "no lapse or retrogression" in the Bank's climate commitments. In plain terms: Don't let them expire and don't water them down. When the announcement came, the reaction was measured but clear-eyed.

Without a numerical target, there's no reliable way to track whether the Bank is actually expanding climate finance to meet growing needs. The Bank has promised an independent review, but the timeline remains unclear, and it's hard to escape the sense that opportunities for external verification and oversight are slipping away. 

This combination of record funding, but fewer ways to hold the Bank to it, is exactly why civil society is calling this a step backward dressed up as continuity, with less funding for real climate solutions.

This backsliding couldn't come at a worse time. Communities across the world are already feeling the cost of a fragile and unreliable energy system as “the biggest energy crisis in history” triggered by the war in the Middle East has crippled economies and fueled widespread discontent.

With the case for clean energy – cheaper, homegrown, and offering real energy security – becoming clearer by the day, a World Bank committed to “boost[ing] prosperity on a livable planet” cannot afford to backslide on its commitment to expanding clean energy and climate action.

The CCAP isn't the only fight underway, either. The International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) arms of the WBG are halfway through a years-long review of their sustainability framework. This framework sets the rules for how private projects WBG funds check for and prevent harm to people and the environment. 

Civil society organizations want two things written into the update. First, a requirement that a project's climate risks be made public before it gets approved. Second, a firm promise that no new rule will be weaker than the ones in place today. Early signs suggest IFC and MIGA management are at least listening. Whether that translates into a stronger policy or another set of good intentions without teeth is still an open question.

These days the Bank prefers to talk about jobs, private investment, and getting electricity to people living without it. Take that last one. The plummeting costs of solar and wind have made renewables the cheapest new electricity almost everywhere. and the quickest way to reach people still without electricity. In fact, they’re very technologies the CCAP was built to fund. 

Releasing press statements is easy. What counts is what the Bank pays for. A record year for climate finance is worth celebrating. A dropped target, an unfinished safeguards review, and a promised review with no deadline are worth watching.

As shareholders head to Bangkok, Thailand, for the 2026 Annual Meetings, this isn't a moment for civil society to go quiet. It's a moment to keep asking, clearly and specifically, for the World Bank to prove that "balancing act" doesn't mean climate loses – and that a Bank still funding fossil fuels isn't doing its job.

That's why a broad coalition of civil society groups, communities, and advocates have coalesced around three simple demands for the World Bank at the meeting:

1. Restore the Bank’s climate finance target. 
2. Strengthen its safeguards on climate.
3. Report publicly on its promises to communities. 

Together, we'll push World Bank management to rebalance the scales and push for climate action, even when the US disagrees. Because the World Bank exists to serve the world – not just a single shareholder. 

Learn more about the World Bank Annual Meetings and how you help push for real change by joining a Learn and Act call on October 8. Just register for the call in your region using the links below.

World Bank Annual Meetings Learn and Act Call: Africa and Europe

World Bank Annual Meetings Learn and Act Call: Asia and Pacific

World Bank Annual Meetings Learn and Act Call: North and South America