Creating a Climate- Friendly Investment Climate

More investment is needed to achieve the goals of the 2015 Paris Agreement. This Policy Brief suggests that the solution lies in increasing climate FDI-cross- border investment aligned with climate goals-by creating a ‘climate-friendly investment climate’. The authors recommend four targeted measures, drawing from a new ‘Guidebook on Facilitating Climate FDI’, to be published by the World Economic Forum in collaboration with Wavteq/ fDi Intelligence: (1) Align investment promotion agency (IPA) strategies, key performance indicators (KPIs), incentives and de-risking instruments to climate goals; (2) Create a database of sustainable suppliers and a supplier development program to help domestic firms become sustainable; (3) Map multinational enterprise climate commitments and create a pipeline of endorsed and vetted carbon-neutral investment projects that help MNEs deliver on their commitments; and (4) Include climate FDI provisions in international investment agreements and national legal frameworks. Finally, a Coalition of IPAs for Climate is proposed to increase knowledge, facilitate cooperation, and drive action to increase climate FDI. The Coalition can use the measures to help facilitate two-way climate FDI between G20 economies, resulting in mutually beneficial outcomes.