MDBs AT COP31 MUST BE HELD ACCOUNTABLE FOR CLIMATE DESTRUCTION

NGO Forum on ADB Statement on MDBs’ Involvement in COP31

In the present reality, the world is living on the frontlines of planetary overshoot. The latest United Nations Environment Programme (UNEP) Emissions Gap Report delivers an uncompromising warning to the international community, wherein global efforts are failing, and the world is accelerating toward a dangerous era of climate overshoot. And this is felt directly on the ground. Across Asia and the Pacific, frontline communities face the brutal consequences of systemic planetary collapse. Catastrophic landslides continue to tear through Nepal, killing more than 900 people and 4,700 missing, with a total damage of more that US$1.8 billion, which requires a huge amount of recovery needs amounting to US$ 4.77 billion. Raging forest fires destroy ecological habitats in Indonesia, with an estimated 3,560 deaths in Indonesia in September were attributed to air pollution from prolonged wildfires across the archipelago. Moreover, the unyielding super typhoons flood vast swathes of the across the Asia region, including in the Philippines, Thailand, Pakistan, and others. These regional disasters are even exacerbated by impending Super El Niño events and compounding geopolitical conflicts. Prolonged wars with regional repercussions, such as that of the Middle Eastern war, have fractured global supply chains, inflated basic living costs, and diverted critical financial resources away from humanitarian relief and resilience, leaving vulnerable populations doubly exposed. Asia and the Pacific is highly vulnerable to Middle East energy shocks, with roughly 80% of its crude oil imports passing through the Strait of Hormuz, and supply disruptions are already driving up fuel and transport costs for consumers and businesses across the region.

This year’s Conference of Parties, known as the COP31, is touted as the Implementation COP. In recognition of the slow delivery and a huge gap in direct pledges, this year is intended to fast-track accountability for the US$1.3 trillion annual target. Unfortunately, pledges for the climate finance only totalled to US$216 million last year, wherein Fund for Responding to Loss and Damage (FRLD) stalled around US$40 million, Adaptation Fund by US$ 135, and Least Develop Country Fund (LCDF) by US$ 39 million which is a glaring scenario of how historic and huge emitters failed to hold accountable for their dirty legacy and responsibility to the climate crisis. 

In the face of unprecedented loss and damage, Multilateral Development Banks, most especially the Asian Development Bank and the Asian Infrastructure Investment Bank, position themselves as conduits of climate finance and of regional climate action. Yet, if their financial portfolios are critically examined, it reveals a deep corporate model that extracts profit from climate devastation rather than offering immediate protection.

Climate finance delivered by these institutions remains severely lacking in volume and structural fairness. MDBs channel the vast majority of their climate allocations as debt-inducing, market-rate loans rather than non-repayable grants, forcing developing nations to accumulate sovereign debt simply to survive ecological shocks they did not create. Despite ADB's US$100 billion Climate finance commitment for 2019-2030. Its 2025 climate finance remained heavily loan-dependent, with 92.7% (US$13.68 billion) provided as loans and only 3.9% (US$571 million) as grants. While the energy sector accounted for 24.4% (US$3.55 billion) of its climate finance, ADB also financed US$3.303 billion in midstream and downstream fossil fuel projects and US$6.65 billion in false climate solutions. On the other hand, AIIB approved USD 10.59 billion for 57 projects in 2025, and climate-related investments made up 71% of its approved regular financing, up from 67% in 2024 and 60% in 2023. That is well above the Bank’s own target of directing at least half of annual financing toward climate. In its Corporate Strategy update of June 2025, AIIB also restated its goal of surpassing 50% in cumulative and actual climate financing between 2021 and 2030.

Moreover, private finance and capital mobilization, which both banks promote as a way to scale up climate finance, often rest on untransparent co-financing arrangements, with little information on how mobilized funds are counted, whether they would have flowed without the banks’ involvement, and who is held accountable when private investors profit while affected communities bear the social and environmental costs. Instead of prioritizing rapid, emergency grant transfers to impacted communities, institutions like the ADB and AIIB maintain financial returns, extracting debt service payments from vulnerable economies.

Furthermore, high-profile institutional pledges mask an ongoing policy backslide. Through mechanisms like the ADB Energy Policy Review, MDBs have embedded policy loopholes that allow continued funding for downstream fossil gas expansion, fossil fuel co-firing, and market-driven transition initiatives that lock Asia into decades of fossil dependency. Further, failures within Climate Change Action Plan (CCAP) reviews demonstrate a systemic refusal to align institutional capital with a true 1.5°C Paris trajectory. 

Core Demands for COP31

At COP31, the NGO Forum on ADB Network and allies, strongly call for an immediate end to MDB-driven extraction and demand institutional accountability for the past and present climate destruction caused by the MDBs and its rich shareholding states. We demand the following: 

Transform Climate Accountability & Stop Debt Creation. MDBs must immediately surrender their role as exclusive gatekeepers of global climate finance. Climate funds must no longer be held hostage by loan-based instruments or market-driven financial intermediaries that inflate sovereign debt. We demand a transition toward direct, public grant funding and full financial reparations for loss and damage.

Execute a Real, Full, and Immediate Fossil Fuel Exit. MDBs must enforce an immediate phase-out of all direct and indirect public financing, technical assistance, and guarantees for fossil fuels. All policy loopholes within energy frameworks, specifically those permitting fossil gas expansion under the guise of "transition fuels", must be formally closed.

Stop Financing for False Solutions. MDBs must cease channeling more investments toward unproven, risky, or ecologically destructive technologies. This includes an immediate stop to financing Carbon Capture, Utilization, and Storage (CCUS), Waste-to-Energy (WtE) incineration, ammonia co-firing, hydrogen technologies, large-scale hydropower and large geothermal projects that cause land displacement and ecological destruction. These institutions must also stop any financial consideration for nuclear energy, given its multiple concerns brought about by the communities affected by catastrophic disasters and an expensive and dangerous technology not fit for the urgent climate needs. 

Reject the New Extractivist Agenda in Critical Minerals. We demand an end to neo-colonial resource extraction rebranded as green energy transitions. Strategic frameworks such as the ADB Critical Minerals-to-Manufacturing Financing Partnership Facility must be ended. MDBs must stop funding destructive mineral extraction, including nickel, cobalt, lithium, and copper mining, that perpetuates land-grabbing, water contamination, and human rights violations across Indigenous territories in the Global South.

Redirect Economic Corridors Toward People and Planet, Not Corporate Interests. We demand that economic corridors be planned and financed around sustainable development goals and the needs of local communities, and the Paris Agreement’s goals, rather than export-oriented growth models that favor big tech, foreign mining corporations and multinational corporations. MDBs, including ADB and AIIB, and all financiers must ensure that interconnected power, port, mining, industrial and digital infrastructure undergo corridor-level environmental and social assessments, full disclosure of who finances what, and accountability from planning through decommissioning. No investment should be labeled “sustainable” simply because it serves the energy transition or is dressed up as green industrialization.

To end, the international community cannot accept continued compliance with a financial architecture that profits off planetary destruction while burdening the Global South with perpetual loss and damage. MDBs like the ADB and AIIB must be held accountable for their legacy and to end all measures including debt-inducing climate finance, continued fossil fuel financing, perpetuation of ‘technology agnostic’ false solutions, and promoting neo-colonial extractivism disguised as green transitions. True climate justice requires full accountability, unconditional reparations, and the immediate deployment of direct public grants to ensure frontline communities receive protection, reclaim their power, and real self-determination in an era of planetary emergency.