Chapter 1 | INTRODUCTION
The OPEC Fund’s strategy as outlined in its Strategic Framework 2030 focuses on maximizing development impact and becoming a leading multilateral development bank that is larger, more financially sustainable and more responsive to the needs of its partner countries. This strat- egy is driven by the OPEC Fund’s commitment to support and align with the emerging needs of partner countries, particularly in the face of climate change.
have fragile economies, large vulnerable communities and limited access to basic needs, energy, income opportuni- ties, infrastructure and connectivity. The Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Re- port (AR6) 6 indicates that 10 percent of households with the highest per capita emissions contribute 34–45 percent of global consumption-based household GHG emissions, while the bottom 50 percent contribute 13–15 percent. As global warming progresses, the adverse impacts of climate change will intensify, leading to widespread devastation
A South-South Mandate and Climate Integration
The OPEC Fund operates with a South-South mandate, which promotes cooperation among developing countries. This mandate drives its engagement in various activities which are in compliance with the OPEC Fund’s ESG Policy. 5 Developed in 2022 and effective from April 2023, the policy ensures that social and environmental risks associated with investment proposals are properly identi- fied and addressed. The policy mandates the consultation of project-affected communities and all relevant stake holders during the preparation and implementation phases of projects. Given the increasing unpredictability of climate change impacts, a heightened focus on climate issues is essential for ensuring sustainable development. Consequently, the screening of projects and assets for environmental and climate risks is becoming critical for assessing potential risks to project sustainability. To this end, the OPEC Fund is implementing such environmental and social screening while introducing mechanisms to better understand and address climate-related risks.
The Paris Agreement aims to limit the rise in global temperatures to 1.5°C above pre-industrial levels, with an ultimate goal of staying well below 2°C.
that could derail the SDGs and endanger the lives and livelihoods of millions of people, particularly in the Global South. The challenge lies in reducing emissions equitably while ensuring that vulnerable communities, especially in the Global South, do not face energy insecurity or a lack of development infrastructure. Achieving sustainable development requires resilient infrastructure capable of withstanding the growing impacts of climate change and promoting long-term progress. Vulnerable regions, often those least responsible for emis- sions such as Least Developed Countries (LDCs) and Small Island Developing States (SIDS), are experiencing significant energy insecurity. The Paris Agreement aims to limit the rise in global temperatures to 1.5°C above pre-industrial levels, with an ultimate goal of staying well below 2°C. This target was agreed by 196 countries in 2015, with commitments first outlined through Intended Nationally Determined Contributions (INDCs) and later through Nationally Determined Contributions (NDCs), de- tailing emission reduction pledges, targets and strategies.
The Growing Climate Imperative
The overarching need today is to reduce emissions while also preparing for the consequences of global warm- ing. This challenge is complicated by the fact that many countries in the Global South, which contribute the least to global GHG emissions, are among the most severely affected by climate change impacts. These countries often
5 OPEC Fund’s ESG Policy 2022 6 Climate Change 2023, IPCC
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