World Bank removes climate targets from financing after US criticism
US Treasury Secretary Scott Bessent called the bank's climate lending goals 'distortionary' as the institution pivots toward traditional economic development
The World Bank has removed quantitative targets for climate objectives from its financing framework, bowing to sustained pressure from the United States to refocus the institution on economic development and poverty alleviation.
The move marks a significant retreat from the bank’s climate ambitions, which had included directing 45% of its annual lending toward climate-related projects. US Treasury Secretary Scott Bessent had publicly labeled those targets as “distortionary” and “nonsensical,” arguing they pulled the institution away from its core mission.
What the World Bank is walking back
The World Bank’s Climate Change Action Plan set the 45% lending target as a cornerstone of its sustainability strategy. That plan is set to expire on June 30, 2026, and the removal of quantitative benchmarks effectively guts its most measurable commitment before the clock even runs out.
Here’s the thing: the bank wasn’t just hitting that target. It was exceeding it. In fiscal year 2025, the World Bank Group delivered $50.8 billion in development finance with climate co-benefits, representing 48% of its total financing. In other words, the institution scrapped a goal it was already surpassing.
The previous target had actually been raised from 35% to 45%, reflecting what was, at the time, a growing institutional consensus that climate and development finance were inseparable.
The US has been pushing for the bank to loosen constraints on fossil fuel lending, with a particular interest in expanding support for natural gas projects.
A transatlantic fault line
The decision didn’t happen in a vacuum. It emerged from an increasingly tense standoff between the US and European shareholders, particularly France, which had been actively urging the World Bank to maintain its 45% climate finance target.
Civil society groups have been sounding alarms for months as these shareholder discussions played out behind closed doors. Their concern is straightforward: once you remove the quantitative targets, there’s no mechanism to hold the bank accountable for maintaining any particular level of climate investment.