COMMON APPROACH TO MEASURING CLIMATE RESULTS Update on Indicators NOVEMBER 2024 INTRODUCTION Multilateral Development Banks (MDBs) share a collective vision for supporting countries, and public and pri- vate sector clients to transition toward an equitable low-carbon and climate-resilient future while continuing to pursue core sustainable development objectives. Central to this vision is supporting the achievement of the ambitious mitigation and adaptation goals of the Paris Agreement through a wide range of financing and advisory services, and supporting climate policies, plans, and frameworks. In April 2024, the MDBs published a Common Approach to Measuring Climate Results (the Common Approach) presenting the first common framework to define, measure, and link global progress on climate mitigation and adaptation with climate results of MDB activities. This is the first time MDBs are looking at results jointly and represents a significant step, in addition to tracking and reporting climate finance, and implementation of the COP24 Paris Alignment framework.1 The Common Approach aims over time to provide stakeholders with a clearer view of climate results of MDBs and to enhance consistency in measuring results across MDBs. This note expands on the April 2024 publication by providing an initial list of common indicators. To ensure indicators are compatible with MDB business models, this work is founded on individual MDB experiences in results measurement as well as other MDB joint approaches.2 It has also benefited from technical exchanges with external stakeholders. Over time, MDBs will continue to add to and refine the indicators proposed, applying lessons learned through operationalization and further engagement and dialogue with relevant stakeholders, including those also working on harmonization of climate results metrics such as the Multilateral Climate and Environment Funds. This process will further inform the list of common indicators (and their methodologies), allowing the Common Approach to be responsive to the evolving international sustainability and impact measurement and disclo- sure landscape, and to reflect the best available global knowledge. In this way the Common Approach will pro- vide a basis for incorporating further important interconnections that relate to climate change in sustainable development frameworks, such as the Sustainable Development Goals, the Kunming Montreal Global Biodiver- sity Framework, and the Sendai Framework for Disaster Risk Reduction; as well as for examining how to report results that support systemic change. CONTEXT The list of initial common indicators that are presented represent an initial in-depth reflection of the impact of the MDB contribution to achieving the goals of the Paris Agreement. The indicators leverage existing individual MDB frameworks for tracking climate-related results, as reported elsewhere, including routine project- and corporate-level documents. Beyond existing indicators, these initial common indicators introduce new indica- tors to cover areas where MDBs contribute or have an impact but are not yet systematically capturing results. While this set of common indicators is intended to be flexible, the following common guiding principles were applied to shape the initial common indicators chosen: See Joint Declaration of MDBs Alignment Approach to Paris Agreement. 1 See in particular the joint methodological principles for assessment of Paris Agreement alignment of new operations; the common prin- 2 ciples for climate mitigation finance tracking; common principles for climate change adaptation finance tracking, and the Framework and Principles for Climate Resilience Metrics in Financing Operations. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 1 z Results: MDBs primarily include ex-ante expected outputs and outcomes in this initial list of common in- dicators.3 This approach allows MDBs to identify expected results from operations at the time of commit- ment. Over time, results will include considerations of ex-post results analysis where this is appropriate. z Coverage: This initial set of common indicators is not exhaustive. While the common framework captures all MDB financing, not only climate finance, it does not intend to cover all MDB climate-related results from this financing. MDBs rely on a broad set of indicators and tools to tell their unique stories on climate results and impact and may use other indicators to cover areas where MDBs contribute or have an impact. z Commonality: The initial common indicators proposed seek to identify common areas of focus - with this initial list covering indicators with the potential for commonality among MDBs. These indicators reflect common results areas at a high level; however, results in these areas may or may not be tracked, and if tracked, may use different methods or approaches across institutions. At this stage, definitions are in- tentionally flexible to reflect the differences that can exist across MDBs in mandates, business models, processes, and clients. z Connectivity: Where applicable, MDBs will disaggregate indicator results by topic such as gender, con- flict, and fragile countries. Understanding the importance of the climate and social nexus, this will be further informed by related work that is ongoing in the MDB and international community – such as the climate and gender, and climate, fragility and conflict metrics work ongoing in the MDB gender working group and the Abu Dhabi group, respectively.4 z Reporting coverage: Flexibility is maintained to accommodate each MDB’s selection of indicators and their unique processes for tracking and reporting, as well as clients’ capacity to collect data against this proposed set of indicators. MDBs will report on results achieved through their respective systems and re- porting processes, and work to support their clients in their efforts to collect data across these indicator sets. COMMON APPROACH TO MEASURING CLIMATE RESULTS This note continues to frame the Common Approach around three levels (Figure 1) adding a thematic-based perspective to articulate the theory of change behind MDBs contributions to achieving the goals of the Paris Agreement. At this stage, MDBs have focused on indicators at level 1 (global and country context) and level 2 (results from operations).5 Level 3 indicators capturing MDBs' institutional efforts will be developed as a later step. The following sections describe Level 1 and 2 common indicators for (i) Adaptation and Resilience; (ii) Global Temperature Goal, mitigation, and GHG emissions, and (iii) Country and Client Transition. 3 OECD 2022. Glossary of Key Terms in Evaluation and Results-Based Management. 4 See Annex 6, below for further background on related climate and social interlinkage workstreams. 5 Level 2 indicators are reported as expected results at the time of commitment. MDBs then follow their individual procedures for report- ing actual results later in the project cycle (see Results under Context). COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 2 Figure 1. Common Approach to Measuring Climate Results Development Objective SUPPORT ACHIEVEMENT OF PARIS AGREEMENT GOALS Global Adaptation & Resilience Global Temperature Goal & Mitigation Level 1. Global and Country Context Country Transition Progress Inform Contribute Level 2. Adaptation & Resilience Mitigation & GHG Emissions Results from Operations Country and Client Transition Support Level 3. Institutional Efforts MDB Resources and Finance LEVEL 1 AND 2 INDICATORS FOR ADAPTATION AND RESILIENCE Climate resilience is not a static attribute, but a dynamic and complex physical characteristic that changes over time and space making it complex to establish universal metrics for climate adaptation and resilience. Furthermore, the multi-dimensionality of climate adaptation and resilience means that a suite of metrics are needed to more accurately represent the topic. The initial common indicators proposed to measure the pos- itive climate adaptation and resilience impacts of MDB operations aims to capture the wide range of results from the variety of climate adaptation activities financed, acknowledging the importance of context to track- ing this progress. The Common Approach builds on the individual systems and frameworks of MDBs reporting climate results. It also builds on the continued MDB cooperation for several years, including with other entities, on climate re- sults reporting.6 Throughout the process of identifying initial common indicators for adaptation and resilience, extensive consultation has been undertaken with leading climate adaptation and resilience results metrics 6 See in particular Framework and Principles for Climate Resilience Metrics in Financing Operations. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 3 experts. MDBs will continue to learn from and collaborate with each other and external experts and organiza- tions, particularly under the ongoing process of developing indicators for the Global Goal on Adaptation (GGA) of the United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement. Level 1 - Global Climate Adaptation and Resilience The UAE Framework for Global Climate Resilience (UAE FGCR)7 recognizes that climate adaptation is a process and sets relevant process-based targets that are critical for achieving climate resilience. Tracking people at high risk from climate shocks is a global indicator which can help to track global progress on adaptation and resilience. TABLE 1. Adaptation and Resilience Context Indicator Context Area Indicator Global Adaptation and Resilience Percentage of people at high risk from climate-shocks globally [%] Recognizing that this indicator does not capture all dimensions of global climate adaptation and resilience, MDBs will continue to work to identify other additional indicators which can enrich the characterization of the global state of climate adaptation and resilience. Level 2 - Climate Adaptation and Resilience Results from MDB Operations The Common Approach presents climate adaptation and resilience indicators in line with the MDB climate resilience metrics framework, focusing on project results, specifically outputs and outcomes. Climate adap- tation and resilience outputs and outcomes relate to adaptation activities which credibly address a context of climate vulnerability.8 Without a climate vulnerability context, the indicators may reflect a positive devel- opment outcome but not a climate resilience outcome. The high-level principles underpinning the Common Approach and proposed indicators are presented in detail in Annex 1. The Global Goal on Adaptation (GGA)9 of the United Nations Framework Convention on Climate Change (UNF- CCC) Paris Agreement provides a foundation for the development of indicators to track progress on climate resilience and adaptation. To structure the wide variety of results from MDB climate adaptation activities, the Common Approach includes a set of indicators against six of the seven key areas.10 These thematic results areas reflect improved climate resilience across the lens of people, planet, and economy. This lens provides a clear focus on the climate adaptation and resilience impact of MDB investments in terms of the social, envi- ronmental, and economic benefits that they confer11. 7 UAE Framework for Global Climate Resilience was created to advance how global progress on adaptation is tracked, assessed, and re- ported on to advance progress on the Global Goal on Adaptation (GGA) of the Paris Agreement agreed to at COP28. 8 Adaptation and climate resilience outputs and outcomes need to be directly related to adaptation activities as defined through the three steps outlined in the joint MDB methodology for tracking adaptation finance. Critically, there needs to be a direct and logic link between project activities, from which adaptation and climate resilience results are reported, and the climate vulnerability context of the project. 9 The GGA process, also known as “UAE – Belém work programme” established at the COP 28 in Dubai in 2023, aims to develop indicators to measure progress towards the targets outlined in the UAE Framework for Global Climate Resilience. The framework includes a range of thematic and dimensional targets for climate adaptation and resilience. 10 The seventh area, cultural heritage, has not been included as further analysis is needed to understand how MDBs' activities may relate to results in this area. 11 As is described in the ARIC Adaptation and Resilience Investors Collaborative paper, Adaptation and Resilience Impact, a measurement framework for investors April 2024. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 4 Adaptation and climate resilience results (i) are cross-cutting and often delivered beyond typical economic sector areas, (ii) can lead to both direct and indirect outcomes, and (iii) contain significant interaction and often overlap between the results areas. Activities in one results area could lead to positive outcomes in one or more areas. For example, improvements in water stewardship may increase yields in food productivity. Ad- ditionally, gains in access to reliable energy can lead to positive outcomes in health, food security, education and wider social benefits. Likewise, improvements in infrastructure systems may improve health outcomes. Descriptions of each results area can be found in Annex 1. The following proposed indicators reflect project results in terms of outputs and outcomes. They are inten- tionally ambitious and given the relatively early stage of development of climate adaptation and resilience indicators, are therefore subject to further refinement and development moving forward. Further details, in- cluding descriptions for each indicator, can be found in Annex 2. TABLE 2. Adaptation and Resilience Results Indicators12 Dimensions People Planet Economy Thematic Results Area Indicator Water Volume of water made available in a climate related water-stressed context [m3] Considers water as a Beneficiaries with new or improved access to water, sanitation, or hygiene in a sector as well as water climate-related water-stressed context [Number] as a medium for building climate resilience. Beneficiaries of adaptation measures to manage water-related hazards [Number] Beneficiaries of climate adaptation measures in agriculture and food systems Food and Agriculture [Number] Considers the food and agricultural system as a Increased and/or maintained agricultural productivity (i.e. yields) with sector as well as access implementation of adaptation measures [Tons] to adequate food and nutrition. Beneficiaries of improved or maintained access to food and nutrition due to adaptation measures [Number] Health Considers the healthcare sector as well as the People with strengthened capacity to prevent, detect and respond to climate-related health-related outcomes health emergencies [Number] of improved climate resilience. In order to respond to the three dimensions of people, planet and economy, beneficiary indicators can include but are not limited to 12 people, firms, and ecosystems. Additionally, beneficiaries can be divided into two categories (direct and indirect) for the purposes of measuring the impacts of MDB operations. Direct beneficiaries are those individuals, ecosystems and firms targeted by an intervention or benefitting directly from the intervention. Indirect beneficiaries capture those individuals, ecosystems and firms which are not the primary target of the intervention, but receive benefits through the ripple effect of the intervention’s impact on the direct beneficiaries. The Adaptation and Resilience Results Indicators allow MDBs to capture all (direct and indirect) beneficiaries. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 5 TABLE 2. Adaptation and Resilience Results Indicators (continued) Dimensions People Planet Economy Thematic Results Area Indicator Ecosystems and Biodiversity Beneficiaries of adopted nature-based solutions for climate resilience [Number] Considers all forms of ecosystem and biodiversity, including terrestrial, inland Area of terrestrial and aquatic ecosystems under protection, conservation and/or water, mountain, marine enhanced management in response to climate variability and change [Hectares, m2, and coastal ecosystems. etc.] Beneficiaries of infrastructure (including all assets, services, and systems of the Infrastructure & Human built environment) that integrates adaptation measures and/or enables adaptation Settlements [Number] Considers the climate Note, services include the services that infrastructure provides, including access to resilience of infrastructure energy, and emergency management services, and captures all types of adaptation and human settlements activities. as well as the climate resilience benefits that Reduced service disruption, or reduced damage, or increased benefits provided due they provide. to climate resilient infrastructure services that integrate adaptation measures and/ or enables adaptation [e.g. Days of downtime, or $] Poverty Eradication and Beneficiaries of adaptive social protection programs [Number] Livelihoods Includes activities that Poor and vulnerable people actively engaging in adaptation decision-making reduce the adverse effects [Number] of climate change on poverty eradication, and Beneficiaries accessing financial products and services to manage physical climate financial inclusion, through risk [Number] adaptive social protection, livelihood diversification, People with access to adaptation finance that promote gender equality and social and adaptation activities inclusion [Number] that are locally led, gender- transformative, fragile, and Beneficiaries of livelihood resources to manage climate risk [Number] conflict sensitive. LEVEL 1 AND 2 INDICATORS FOR GLOBAL TEMPERATURE GOAL, MITIGATION, AND GHG EMISSIONS The ambitious temperature goal of the Paris Agreement is to keep global warming well below 2 degrees Cel- sius with efforts to limit it to 1.5 degrees Celsius. The latter part of the goal and the urgent actions needed for it were reconfirmed by parties to the convention at COP28, including in the longer-term achieving net zero greenhouse gas (GHG) emissions by mid-century which involves structural transformations across all sectors of the economy. MDBs will measure results from their operations (Level 2) within the broader context of global- and country-specific emissions (Level 1). COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 6 Level 1 - Global Temperature Goal and Mitigation The global emissions profile provides valuable insights on worldwide progress towards the temperature goals outlined in the Paris Agreement, and highlights the level of urgency required to avoid dangerous climate change impacts. TABLE 3. Global Temperature Goal and Mitigation Context Indicators Context Area Indicator Global GHG emissions [GtCO2e/year] Global Temperature Goal and Mitigation Global GHG atmospheric concentration [ppm] Level 2 – Mitigation and GHG Emissions Results from MDB Operations The initial common indicators for mitigation results seek to reflect the MDB contributions to support the prog- ress of public and private sector clients towards equitable and low emissions development. Two types of indi- cators are considered: i. Indicators that capture the effects of projects in terms of GHG emissions. ii. A set of sector-specific indicators, which seek to reflect progress in the transformations needed in rele- vant sectors. These two types of indicators are complementary: some projects for which sector indicators are not pertinent are covered by estimation of GHG emissions and vice versa. The indicators do not capture more indirect, sys- temic, nor long-term contributions to transformation which MDB projects can stimulate. For example, some projects may lead to an increase in emissions and yet be instrumental in achieving decarbonization. The foundation of choosing these sectors and developing these indicators has been guided by (i) the UNFCCC sector classifications for GHG emissions reporting by countries (which map across broadly to the sectors used as part of the Common Principles,13 and (ii) the outcomes of COP28 to track progress against Paris Agreement objectives, particularly in areas such as renewable energy and energy efficiency improvements.14 Greenhouse gas emissions results indicators Absolute and relative emissions are two key metrics used to track and manage greenhouse gas emissions. Both play important roles in shaping climate strategies. MDBs recognize, however, that there are significant methodological issues to address under each metric, which require further work. As an initial step, the prin- ciples for relative emissions are outlined in Annex 3, providing a foundational framework to guide emissions reporting. With regards to absolute emissions, the MDBs will work on the development of principles for calcu- lating and reporting this indicator. 13 Where applicable, the Common Approach mitigation indicators refer to specific activities within Common Principles for Climate Mit- igation Finance Tracking Revision version 5 December 2023. Eligible activities and associated references may change over time with periodic updates to the Common Principles. 14 See: COP 28 (here), Energy (here), Transport (here), Industry (here), buildings (here), Circular Economy (here), Agriculture (here). COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 7 TABLE 4. Greenhouse Gas Emissions Results Indicators Mitigation Results Indicator Relative GHG emissions per year [tCO2e/year] GHG Emissions Results Absolute GHG emissions per year [tCO2e/year] Mitigation sectoral results indicators The table below sets out common sector areas where eight indicators are proposed for these sectors as well as two cross-sectoral indicators. These indicators are informed by the definitions in the Common Principles with further details, including descriptions for each indicator, found in Annex 4.15 TABLE 5. Mitigation Results Indicators Sector Result Area Indicator Energy Renewable energy capacity enabled [GW] Passenger trips by low-carbon mode or vehicle [Passenger-trips/year] Transport Transport of goods by low-carbon mode or vehicles [Tons/year] Industry Conversion of energy source in industrial processes [MWh/year] Buildings Floor area with emission reductions in new or retrofitted buildings [m2] Amount of solid waste processed with low-emission systems [Tons] Waste, wastewater and circular economy Volume of wastewater processed with low-emission systems [m3] Agriculture, forestry, land Terrestrial and aquatic areas under conservation or sustainable management use and fisheries [Hectares] Energy efficiency improvements under activities [MWh/year] Cross-sectoral Beneficiaries with access to financial products and services via financial intermediaries that support climate mitigation activities [Number] LEVEL 1 AND 2 INDICATORS FOR COUNTRY AND CLIENT TRANSITION SUPPORT To deliver on the goals of the Paris Agreement, MDBs consider country and client ambition and progress in the transition toward low-emission, climate resilient, and equitable economic development, as an important consideration for their engagement. This progress informs MDBs' understanding of country and client needs and shapes their support in designing and implementing transition plans and enabling policy environments. Common Principles for Climate Mitigation Finance Tracking Revision version 5 December 2023 www.eib.org/attachments/documents/ 15 mdb_idfc_mitigation_common_principles_en.pdf. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 8 Level 1 – Country Transition Progress At a global and country level, the country transition progress indicators reflect established reporting and trans- parency frameworks under the Paris Agreement - providing insight into the status of country-level ambition in terms of GHG emissions reduction, climate resilience, and related social considerations, and country and client progress in delivery of this ambition.16 Further details, including descriptions for each indicator which integrate how the client progress will be assessed and supported, can be found in Annex 5. TABLE 6. Country Transition Progress Context Indicators Context Area Indicator Countries with Long-term Strategies [Number] Countries with Nationally determined contributions [Number] Country Countries with climate vulnerability and risk assessment [Number] Transition Progress Countries with National Adaptation Plan [Number] Countries with resilience monitoring, evaluation and learning systems [Number] These key sources of information will be supplemented by MDB diagnostics and objective third-party analysis of transition progress, both in terms of public sector ambition and delivery and in relation to countries’ adop- tion of international standards and regulations, as well as emerging best practice in private sector (enterprise and financial sector) regulation. Level 2 – Country and Client Transition Support Results from MDB Operations MDBs support countries in the development and implementation of climate policies, strategies, and plans at na- tional, sub-national, and sectoral levels. MDBs also support private sector clients (corporates and financial inter- mediaries) in developing readiness conditions and credible transition plans for aligning to the Paris Agreement. Recognizing that, if not properly managed, the socioeconomic change resulting from the green transition can worsen social inequality, or that the green transition may stall, MDBs acknowledge the critical importance of ensuring a just transition to a low emission and climate resilient economy that simultaneously improves social development. This includes gender equality and women’s economic empowerment, and reducing the adverse effects of climate change on conflict, fragility, migration and forced displacement. In addition to the provision of climate finance themselves, MDBs also mobilize climate finance from a range of partners and market actors. Building on climate co-finance volumes which are already jointly reported in the annual Joint MDB Climate Finance Report, the Common Approach proposes to include the already reported figure of private climate finance mobilized, and a limited number of additional indicators, to reflect MDB sup- port in particular to (i) increasing the outreach of financial institutions in deploying climate finance, particularly MDBs recognize the critical role we can play in supporting countries as they work toward their climate commitments under the Paris 16 Agreement. We also acknowledge that the submission of documents such as NDCs, LTSs, and NAPs does not alone guarantee substan- tive progress, and we aim to support countries in continually strengthening their climate governance by encouraging a focus on the quality and effectiveness of their policies. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 9 to MSMEs which MDBs do not finance directly, and (ii) enabling public and private sector clients to issue climate related bonds, thus leveraging finance from the capital markets and supporting further capital markets’ en- gagement in this sphere. MDBs will continue to work to refine and adjust these indicators to capture additional support given by MDBs to catalyze climate action through financial systems and support market mechanisms, such as Article 6 implementation and supporting carbon pricing, which can enhance client’s fiscal space. Table 7 lists an initial set of proposed indicators that reflect MDB support to countries and clients, while a discussion on the areas of engagement and challenges in capturing catalytic effects can be found in Annex 6. TABLE 7. Country and Client Transition Support Results Indicators Thematic Results Area Indicator Countries supported in climate policy, legal and regulatory development, and implementation [Number] Client Transition Support Corporates and financial intermediaries supported in climate transition plan and readiness condition development and implementation [Number] Common Just transition indicators, beyond the considerations under Country support, above, remain under development. See Annex 5. Just Transition and wider Common indicators demonstrating joint Gender/climate and Fragility/climate results, social interlinkages beyond those included in the Adaptation, Mitigation, Country support and Finance mobilization, sections of this paper also remain under consideration, as outlined in Annex 5. Volume of private climate finance mobilized both directly and indirectly [US$ mn] Beneficiaries accessing climate financing via financial intermediaries and funds [Number] Finance mobilization17 Beneficiaries accessing climate finance via other instruments mobilizing private finance [Number] Issuance supported by MDBs of climate related bonds [number of issuers and US$ mn] The MDB and IFI working group on private finance mobilization is working to update their methodologies, expected early in 2025. This 17 will be considered in future improvements to these indicators. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 10 NEXT STEPS AND OPERATIONALIZATION The indicators in this initial list are intended as a flexible menu for MDBs to adopt as appropriate to their spe- cific mandates and their feasibility within the constraints of their results management systems and resources. After COP29, MDBs will assess the potential of their individual institutions to operationalize some or all these initial common indicators within the context of their mandates and institutional data collection and reporting systems. Those indicators adopted may be reported by each MDB through their respective result reporting mechanisms. MDBs will continue to refine and adjust the Common Approach through lessons learned and collaboration across MDBs, including considerations on ex-post results analysis where this is appropriate. This process will also be informed by further dialogue with stakeholders, advances in relevant technical areas, and evolving global reporting standards. The process will also act to continuously improve the list of common indicators and develop methodologies to facilitate consistency in future data collection and reporting. Over time, col- laboration on common indicators will help improve MDB reporting and narrative on results that support MDB reporting, and systemic change and transformative impact. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 11 ANNEX 1 CLIMATE ADAPTATION AND RESILIENCE RESULTS The Common Approach and proposed initial common indicators are underpinned by the following principles that guide the development and application of the metrics. Physical Climate Vulnerability Context Adaptation and climate resilience outputs and outcomes are required to be directly related to adaptation ac- tivities as defined through the three steps outlined in the joint MDB methodology for tracking adaptation fi- nance. Critically, a direct and logical link between project activities is required, from which adaptation and climate resilience results are reported, and the climate vulnerability context of the project. Without a direct link, the indicators may reflect a positive development outcome but not a climate resilience outcome.18 Timeframes of Project Results Climate resilience metrics must be compatible with the variable and often long timescales over which intend- ed project results may be delivered. There may be long time lags between project design and implementation and the delivery of climate resilience results. Therefore, the indicators are flexible to ensure they are appropri- ate for project-specific temporal as well as spatial scales. Uncertainty Regarding Future Climate Projections Climate resilience metrics must be able to cope with the inherent uncertainties associated with future climate conditions. The longer the timescales for project implementation and the assessment of project results, the greater the climate uncertainties and their implications for project performance. This makes estimating fu- ture project results even more challenging. Therefore, the application of indicators and the interpretation of the results, requires flexibility and cognizance of such uncertainties. The capacity to cope with uncertainty reduces maladaptation risks at the same time. Scales of Results MDB climate adaptation activities include both adapted activities and activities that enable climate resilience at the system level; they therefore deliver both asset level and system level results. Furthermore, these results may be direct or indirect (e.g. at the level of the project or within the supply chains). Therefore, the indicators are flexible to be applied in the relevant project-specific context and capture the project results at different scales while being conservative in nature. Types of Indicators Project results include outputs, outcomes and impacts: z Outputs are the products, capital goods, and services that are delivered through the MDB finance, re- sponding to the project-specific context of climate vulnerability in order to build climate resilience. They may also include changes resulting from the project that are relevant to achieving outcomes. This includes all type 1, type 2 and type 3 activities, even if they incur no additional costs, and all acute and chronic climate hazards are 18 relevant. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 12 z Outcomes are the likely or achieved effects of MDB finance, which may take the form of adjustments of physical, human, or environmental systems and associated economic benefits, responding to the proj- ect-specific context of climate vulnerability in order to build climate resilience. z Impacts can be inferred from outputs and outcomes and may be expressed in purely qualitative or de- scriptive terms. Structure of Sectors and Results Areas To structure the wide variety of results from MDB climate adaptation activities, the Common Approach iden- tifies sectoral results areas that reflect improved climate resilience at the most fundamental level of people (e.g. individuals, families, or communities), the planet (e.g. natural habitats, ecosystems or biodiversity) and/ or the economy (e.g. economic assets, economic activities or economic systems). The ‘people, planet, and economy’ lens provides a clear focus on the climate adaptation and resilience impact of MDB investments in terms of the social, environmental, and economic benefits that they confer.19 The Global Goal on Adaptation (GGA) of the United Nations Framework Convention on Climate Change (UNFC- CC) Paris Agreement provides a foundation for the development of standard metrics and common indicators to track progress on climate resilience and adaptation. Recognizing that achieving climate resilience is a dynam- ic process, MDBs propose a series of enhanced results that can facilitate the scaling up of climate adaptation finance and ensure that all financing flows are aligned with climate adaptation and resilience goals as outlined in the GGA. The Common Approach also includes a set of example indicators against six of the seven key areas defined within the UAE FGCR, agreed to at COP28, which contribute to the delivery of this overarching aim. The seventh area, cultural heritage, has not been included as further analysis is needed to understand how MDBs' activities may relate to results in this area. There is significant interaction and overlap between the results areas. They should be understood as broad interlinked categories, where activities in one results area could result in positive outcomes in another, or in multiple areas. For example, improvements in water stewardship may increase yields in food productivity. Likewise, improvements in infrastructure systems may improve health outcomes. Adaptation and climate re- silience results are cross-cutting and often delivered from beyond typical economic sector areas. For exam- ple, the results of sectors such as Industry, Education or Social Protection can be seen in the results areas of infrastructure, health, and poverty and livelihoods. FAO 2013. Climate-Smart Agriculture: Sourcebook. Rome, Italy: Food and Agriculture Organization of the United Nations. 19 COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 13 TABLE 1. Climate Adaptation and Resilience Results Areas Climate Adaptation and Resilience Results Areas and Topic Descriptions Dimensions People Planet Economy z Considers water as a sector as well as water as a medium for building climate resilience. z Includes activities that significantly reduce climate-induced water scarcity and Water enhancing climate resilience to water-related hazards. z Includes activities that support a move towards climate-resilient water supply, climate-resilient sanitation, and towards access to safe and affordable potable water for all. z Considers the food and agricultural system as a sector as well as access to adequate food and nutrition. z Includes activities related to climate-resilient food and agricultural production and Food and Agriculture supply and distribution of food and agricultural products. z Includes activities that increase sustainable and regenerative production and equitable access to adequate food and nutrition for all. z Considers the healthcare sector as well as the health-related outcomes of improved climate resilience. z Includes activities that promote climate-resilient health services. Health z Includes activities that enhance resilience against climate change related health impacts, and/or significantly reduce climate-related morbidity and mortality, particularly in the most vulnerable communities. z Considers the climate resilience of infrastructure and human settlements as well as the climate resilience benefits that they provide. Infrastructure & Human z Infrastructure and Human settlements include all assets, services and systems of Settlements the built environment, from cities and urban areas, to rural settlements, buildings and infrastructure assets and services, whether for private organizations or public use (e.g. transport, energy, water, information and communication technology, etc.). z Considers all forms of ecosystem and biodiversity, including terrestrial, inland water, mountain, marine and coastal ecosystems. z Considers the impact of climate change on ecosystems and biodiversity as well as the climate resilience benefits that they provide. Ecosystems and Biodiversity z Includes activities that reduce climate impacts on ecosystems and biodiversity, including through their management, enhancement, restoration, conservation, and protection. z Includes activities that accelerate the use of ecosystem-based adaptation and nature-based solutions. z Includes activities that substantially reduce the adverse effects of climate change on poverty eradication, and financial inclusion, in particular by promoting the use of Poverty Eradication and adaptive social protection and livelihood diversification. Livelihoods z Includes adaptation activities that are locally led, gender-transformative, fragile and conflict sensitive, and aim at empowering vulnerable communities in climate adaptation decision making. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 14 Climate Adaptation and Resilience Results Areas and Topic Descriptions Dimensions People Planet Economy z Considers the protection of cultural heritage from the impacts of climate change as well as the guidance that traditional knowledge, indigenous peoples’ knowledge, and local knowledge systems can provide in adapting to climate change and enhancing Cultural Heritage climate resilience. z Further work is required to understand which types of MDB activities would be included and how results would be delivered. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 15 ANNEX 2 CLIMATE ADAPTATION AND RESILIENCE INDICATORS Global Context Indicator – Adaptation and Resilience Indicator Definition The percentage of people at high risk from climate shocks globally is defined as the number of people who are both exposed to a set of key climate-related hazards (floods, droughts, cyclones, and heatwaves), and are also highly vulnerable (i.e., have a propensity to be Percentage of people at adversely affected or unable to cope with the impacts), as a share of global population. high risk from climate- Specifically, people are counted as at high risk from climate shocks if they are exposed shocks globally [%] to at least one hazard and are identified as highly vulnerable on at least one dimension of vulnerability. Source: Percentage of people at high risk of from climate-related hazards globally. Results Indicators – Adaptation and Resilience Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: Additional water made available, either through water savings or through the provision of additional usable water, including Volume of water made conventional and unconventional water sources. Further, this available in a climate includes water supply and water storage capacity added or related water-stressed improved in a climate-related water-stressed context and context [m3] unconventional water resources capacity added or improved to respond to climate-related water stressed context, through Water treatment, recycling, and reuse. Considers water as a sector as well as water Beneficiaries include people, ecosystems, and firms that directly as a medium for building Beneficiaries with new or indirectly benefit from a reliable and continuous access to climate resilience. or improved access to secure water (through for example well managed water sources, water, sanitation, or additional or improved hygiene, enhanced water supply system’s hygiene in a climate- redundancy, reduction of water losses, non-revenue water, related water-stressed use of smart metering, Internet-of-things, among others). This context [Number] indicator should be disaggregated, where possible, by gender, rural/urban, etc. Beneficiaries of Beneficiaries include people, ecosystems, and firms that adaptation measures to directly or indirectly benefit from specific adaptation measures manage water-related oriented towards managing observed and/or anticipated hazards [Number] hydrometeorological risks exacerbated by climate change. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 16 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: Water-related hazards include floods, cyclones, landslides, or any other relevant hazard. In the context of drought, if a project has a primary objective of drought risk management and includes irrigation as a measure to manage drought risk, then irrigation should be captured here. Otherwise, irrigation is covered under the thematic results area of infrastructure Beneficiaries of and human settlements. The outcomes of addressing other adaptation measures to non-water-related climate hazards (e.g. heatwaves) are covered Water (cont.) manage water-related under infrastructure. hazards [Number] This indicator should be disaggregated, where possible, by gender, rural/urban, etc. This outcome may be delivered through the achievement of the output of Area protected through adaptation measures to manage water-related hazards [Hectares, m2, etc.]. Food systems include all the ways through which food is grown, gathered, harvested, processed, delivered, accessed, and consumed, and how these intersect with health, environment, economy, and society. Climate resilient food systems integrate climate risk and adaptation considerations, thereby helping in reducing climate risk. Climate Smart Agriculture is defined as “agriculture that sustainably increases productivity, enhances resilience (adaptation), reduces/removes GHGs Food and Agriculture (mitigation) where possible, and enhances achievement of Beneficiaries of climate national food security and development goals”. 20 Considers the food and agricultural system as a adaptation measures Climate resilient agriculture refers to the ability of an sector as well as access in agriculture and food agricultural system to anticipate and prepare for, as well as to adequate food and systems [Number] adapt to, absorb, and recover from the impacts of changes in nutrition. climate and extreme weather event frequency and intensity. This indicator should be disaggregated, where possible, by gender, rural/urban, etc. This outcome may be delivered through the achievement of the output of Number of agricultural and food producers and enterprises benefitting from adaptation measures [Number] which includes adaptation measures such as climate information services, agricultural insurance, capacity building on soil management, access to climate resilience finance, etc.) FAO 2013. Climate-Smart Agriculture: Sourcebook. Rome, Italy: Food and Agriculture Organization of the United Nations. 20 COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 17 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: Additional or maintained capacity for agricultural potential achieved through improved climate resilience. This includes environmentally sustainable improvements in crop yield that can be expected from improved climate resilience, for example, through adaptation measures or climate resilient management practices, such as reduced soil tillage/erosion, using climate resilient crop varieties, improved irrigation techniques Increased and/or such as drip irrigation, integrated pest management, use of maintained agricultural agroforestry techniques, crop rotation, intercropping, enhanced productivity (i.e. yields) nutrient management, etc., while recognizing that climate with implementation of resilience objectives may be supported by reducing agricultural adaptation measures production. [Tons] This outcome may be delivered through the achievement of the output of Terrestrial and aquatic area under climate resilient management practices [Hectares, m2, etc.] Outcomes of improved climate resilient food and agriculture systems that affect income levels are captured in the poverty and livelihoods thematic results area. Food and Agriculture The number of beneficiaries across multiple sectors that (cont.) strengthen food security in the face of climate change by applying adaptation measures. These interventions may span the universally accepted dimensions of food security, including the availability of food, access to food, utilization of food, and the stability of the food system. Examples of such interventions could include operations which relate directly to food production and consumption, such as climate-resilient agriculture and food Beneficiaries of systems; social protection; nutrition services; agriculture supply improved or maintained chains; financial and trade finance operations that support food access to food and inputs; imports and distribution of food, etc.; increasing the nutrition due to income of small-scale food producers; water for agriculture; adaptation measures agricultural services; improved practices and technologies; [Number] integration of (smallholder) farmers into markets; clean and energy efficient cooking that addresses a climate vulnerability context. Food security is defined when all people, always, have physical and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life. As such improved nutrition can also be an impact here. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 18 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: Capacity to prevent, detect and respond to a climate-related health emergency will depend on the nature of climate hazard and may include, for example, improving awareness among Health People with communities to stay hydrated during heat waves; use of vaccine Considers the healthcare strengthened capacity for vector borne diseases that are increased due to changing sector as well as the to prevent, detect and climate; improving national health surveillance system preparing health-related outcomes respond to climate- climate-related health emergency management plans; and of improved climate related health access to educational material allowing a better understanding resilience. emergencies [Number] of specific climate change impacts and vulnerability context, etc. This indicator should be disaggregated, where possible, by gender. Beneficiaries of nature-based solutions are beneficiaries of “actions to protect, conserve, restore, sustainably use and manage natural or modified terrestrial, freshwater, coastal Ecosystems and and marine ecosystems which address social, economic, Biodiversity and environmental challenges effectively and adaptively, Considers all forms Beneficiaries of while simultaneously providing human well-being, ecosystem of ecosystem and adopted nature-based services, resilience, and biodiversity benefits”.21 This indicator biodiversity, including solutions for climate refers to climate adaptation and resilience through ecosystems. terrestrial, inland water, resilience [Number] Beneficiaries can include people and firms and can be mountain, marine and disaggregated by gender where possible. coastal ecosystems. This outcome may be delivered through the achievement of output of Ecosystem-based adaptation solutions implemented to manage physical climate risks. [e.g., Number, hectares, m2]. Definition from United Nations Environment Assembly, Nairobi February 2022 (UNEA 5.2)  resolution 5/5 adopted 2 March 2022. 21 COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 19 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: The indicator measures the terrestrial and inland/marine aquatic areas that are under enhanced protection, conservation, restoration, and/or sustainable management in response to climate variability and change. This includes diverse landscapes (e.g. forests, grass/shrub lands, woodlands, wetlands, water bodies, watersheds, oases, urban green and blue spaces) and seascapes (e.g. ocean and coastal zones, including wetlands, Area of terrestrial and deltas, mangroves, and reefs) that have been improved from a aquatic ecosystem nature perspective. These are expected to improve the extent under protection, or condition of these areas relating to biodiversity or other conservation and/or ecosystem services and address drivers of nature loss. Relevant enhanced management activities may reduce and reverse natural resource degradation, in response to climate protect and enhance natural habitats and their ecosystem variability and change services, and therefore provide nature benefits to dependent [Hectares, m2, etc.] Ecosystems and communities. This indicator does not include terrestrial Biodiversity (cont.) or aquatic areas managed as offsets for project-related biodiversity impacts (public or private sector). Production landscapes or seascapes (e.g., plantations, agriculture, and aquaculture areas) may be included where practices are applied that result in demonstratable benefits to nature, while not involving conversion of natural habitats. Area of terrestrial and aquatic ecosystem under protection, This outcome may be delivered through the achievement of the conservation and/or output of Area of terrestrial and aquatic ecosystem managed enhanced management with climate adaptation practices. [Hectares, m2 etc.] . in response to climate variability and change [Hectares, m2, etc.] COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 20 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: Beneficiaries of climate resilient infrastructure includes those who benefit from all assets, services and systems of the built environment that integrate adaptation measures or enable adaptation. Services includes the services that infrastructure provides and captures all types of adaptation activities. Services also includes emergency management services. This also includes improved access to reliable energy which is considered a climate adaptation measure in specific contexts where such access directly addresses a physical climate risk; such as in Beneficiaries of the case of cooling during heatwaves, access to power during infrastructure that extreme weather events, and the provision of early warning integrates adaptation systems in extreme weather. measures and/or Beneficiaries can include but are not limited to people, firms, enables adaptation and ecosystems and can be disaggregated by gender and social [Number] Infrastructure & inclusion, income, and geographic coverage. This includes both Human Settlements direct and indirect beneficiaries as relevant. Considers the This outcome may be delivered through the achievement of climate resilience of the output of [Unit] of infrastructure integrating adaptation infrastructure and human measures against physical climate risk considerations and/ settlements as well as or enabling adaptation (disaggregated where possible by the climate resilience geography – rural, urban, cross-border etc.). Units may vary benefits that they for linear infrastructure (e.g., km), point infrastructure (e.g. provide. number), and/or area (e.g. m2 in case of buildings). Reduced service disruption includes the reduction in the Reduced service amount of time that a system or elements of a system are disruption, or reduced rendered inoperable due to physical climate risks (in other damage, or increased words, lost operational time). Reduced damage includes the benefits provided due reduction in the physical damage to assets (in other words, to climate resilient lost capital expenditure) due to improved climate resilience to infrastructure physical climate risks, associated to rapid or slow onset climate services that integrate impacts. Increased benefits include the value of infrastructure adaptation measures protected or other measurable value delivered. and/or enables This outcome may be delivered through the achievement of adaptation [e.g. days of the output of Value of infrastructure integrating adaptation downtime, or $] measures against physical climate risk considerations and/or enabling adaptation [$] COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 21 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: Social protection refers to a set of policies and programs designed to reduce poverty and vulnerability by promoting labor market functioning, diminishing people’s exposure to risks, and enhancing their capacity to protect themselves against hazards and the interruption or loss of income. Adaptive social protection refers to program that helps build the resilience of poor and vulnerable households by investing in their capacity to prepare for, cope with, and adapt to Beneficiaries of climate-related shocks, ensuring that they do not fall (deeper) adaptive social into poverty. The scope of adaptation measures implemented protection programs through the program will depend on the type of social protection [Number] intervention (social assistance, labor market, or social Poverty Eradication and insurance). Livelihoods “Beneficiaries of adaptive social protection program” refers Includes activities that to individuals, households, or firms receiving assistance from reduce the adverse adaptive social protection programs. This indicator should be effects of climate change disaggregated, where possible, by gender. on poverty eradication, and financial inclusion, This outcome may be delivered through the achievement of through adaptive social the output of Number of adaptive social protection programs protection, livelihood implemented [Number]. diversification and adaptation activities that “Poor people” are those from households living on less than $2.15 are locally led, gender- a day using 2017 prices. transformative, fragile and conflict sensitive. “Vulnerable people” refer to (as relevant for a particular project) ethnic minorities, hard-to-reach remote populations, migrants, and internally displace and/or conflict-affected people, persons Poor and vulnerable with disability, returning refugees, HIV/AIDS-affected individuals people actively and households, the elderly, and households headed by women. engaging in adaptation “Active engagement” refers to participation of poor and decision-making vulnerable people in the adaptation planning process, [Number] influencing the volume of adaptation finance meeting the local needs, and in social audits to determine the effectiveness of adaptation implementation. This indicator should be disaggregated, where possible, by gender, demography, indigenous populations, people with disability, and other vulnerable groups. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 22 Adaptation and Climate Resilience Results – Indicators by Thematic Results Area Dimensions People Planet Economy Thematic Results Area Indicator Description: “Financial products” include credit, savings and insurance for managing physical climate risk. “Financial services” include secure and convenient access to credit, savings, and insurance; improved access to finance and Beneficiaries accessing e-commerce opportunities for micro-, small-, and medium-sized financial products and enterprises; and other improved financial services that can help services to manage people and firms to manage physical climate risk. physical climate risk Beneficiaries include enterprises and individuals, disaggregated [Number] by gender, income level, etc. This outcome may be delivered through the achievement of the output of number of beneficiaries, such as MSMEs, cooperatives and individuals that receive financial products and services for adaptation including via financial intermediaries [Number]. Poverty Eradication and Livelihoods “Gender equality” refers to the equal rights, responsibilities and (cont.) opportunities of women and men and girls and boys to benefit People with access from adaptation measures. to adaptation finance that promote gender “Social inclusion” is defined as the process of improving the equality and social terms of participation for adaptation-related decision making, inclusion [Number] particularly for people who are disadvantaged, through enhancing opportunities, access to resources, voice, and respect for rights. “Livelihood resources” refers to a range of technical, financial, Beneficiaries of including income diversification, capacity building and skill livelihood resources to development-related support provided to manage physical manage climate risk climate risks. [Number] Beneficiaries include enterprises and individuals, disaggregated by gender, income level, etc. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 23 ANNEX 3 PRINCIPLES FOR GREENHOUSE GAS EMISSIONS RESULTS – RELATIVE GHG EMISSIONS MDBs will prepare ex-ante estimates of the relative GHG emissions of the projects they finance during the project approval process.22 This is performed by mapping the causal chain of effects of the intervention and estimating all the significant differences in GHG emissions and removals between a baseline scenario and a project scenario. The baselines will be defined according to the Framework for a Harmonised Approach to GHG Accounting pre- pared by the IFI TWG.23 The assessments deliver a figure of annualized relative emissions expressed in tons of carbon dioxide equiv- alent per year (tCO2e/year). A positive figure represents an increase in emissions vis-à-vis the baseline, and a negative figure represents a reduction in emissions. Each MDB will define what project types will be assessed (for example, direct investments, policy loans, loans through financial intermediaries, equity investments, corporate loans). Within each project type, MDBs will de- fine the screening criteria to determine the projects that will be assessed based on their materiality (for exam- ple, financial threshold, and/or physical threshold based on relative and/or absolute emissions). The numbers can also be presented in specific sub-sectors. Review of the Ex-Ante Estimates A review of the ex-ante estimate may be carried out at the time of the project’s final results report.24 It is rec- ommended that this figure be informed by the actual outcomes of the project (i.e., activities delivered) and not necessarily changes in the assumptions used. Importantly, it is suggested that the counterfactual be based on the ex-ante estimates (made during project preparation).25 MDBs will continue to refine and shape the manner through which ex-ante GHG accounting estimates are re- viewed and updated across project implementation. 22 Depending on the terminology adopted by an IFI, relative emissions can also be referred to as “net emissions.” 23 International Financial Institutions’ Technical Working Group on GHG Accounting, 2022. Framework for a Harmonised Approach to GHG Accounting. 24 The timing of the project’s final results report depends on each MDBs operational procedures and financial products. For example, in some MDBs direct investment projects stop producing results reports after the last disbursement. In other MDBs this happens when a loan is fully repaid. 25 If there are other assumptions beyond the counterfactual definition that cannot be verified, ex-ante assumptions should be used in a similar way as described. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 24 ANNEX 4 MITIGATION SECTORAL INDICATORS These common mitigation indicators are informed by the definitions in the Common Principles, reproduced below.26 z Greenfield activities relate to projects in new sites or in existing facilities where the vast majority of a plant and equipment is new and where, in the case of projects in existing facilities, all the critical items of equipment are decommissioned. Greenfield activities include also those that primarily acquire and deploy new appliances or equipment. z Brownfield activities relate to projects that modify existing facilities, equipment, appliances, systems or processes. Where there is gradual replacement or retrofit of a whole facility dedicated to the same activ- ity over a longer period of time, this may be considered as a series of brownfield projects. z Where there is a physical expansion of an existing site, a significant increase in output capacity, or a sig- nificant extension of the expected life of the site, facility or the equipment, the activity should be disag- gregated into brownfield and greenfield components whereby the one corresponding to such an increase or extension should be considered as greenfield development. z The phrase “low carbon” is used to denote projects or materials that have low levels of CO2e emissions associated with them. z Where an activity proposed is the replacement of a chemical compound with another with much lower global warming potential, the phrase “a reduction in CO2e emissions” is used. z The columns in the tables use inclusive “or”—equivalent to “and/or” for the series of options presented. For example, if A, B or C are listed as covered activities, carrying out any one of these activities and meeting the corresponding descriptions and criteria would be sufficient for eligibility. Global Context Indicators – Global Temperature Goal and Mitigation Indicator Definition A measure of annual emissions of greenhouse gasses (GHG) disaggregated at the global level by four gas categories—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and F-gasses— and 13 subsectors within the energy, industry, waste, agriculture, and land use, land use change, and Global GHG forestry sectors, standardized to carbon dioxide equivalent values. At the country level, data are emissions further disaggregated by the six greenhouse gases covered by the Kyoto Protocol—CO2, CH4, [GtCO2e/year] N2O, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and Sulphur hexafluoride (SF6)—plus hydrochlorofluorocarbons (HCFCs) and nitrogen trifluoride (NF3) and 15 subsectors that further disaggregate the agriculture and the waste sector. Source: Global greenhouse gas emissions (GtCO2e/year) 26 Specific definitions have been informed by the Common Principles for Climate Mitigation Finance Tracking and extensive work produced on definitions there. This includes definitions and scope related to greenfield and brownfield activities; and the use of phrases such as “low carbon” and “a reduction in CO2e emissions.” COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 25 Indicator Definition Global GHG A measure of the atmospheric concentration and trends of greenhouse gasses (GHG) disaggregated atmospheric at the global level by four gas categories—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), concentration and sulfur hexafluoride (SF6). [ppm] Source: Carbon Cycle Greenhouse Gases – Global Monitoring Laboratory. Results Indicators – Greenhouse Gas Emissions Mitigation Indicator Definition Results Annualized estimations of the relative GHG emissions calculated as the difference between the project emissions and baseline emissions and Relative GHG emissions including all relevant effects. Emissions are captured in CO2e emissions per year [tCO2e/year] of the following: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons, perfluorocarbons, and sulphur hexafluoride (SF6). Emissions can be disaggregated by sector and gas, if available. GHG Emission Results Annualized estimations of the GHG emissions from sources within the project assessment boundary. Emissions are captured in CO2e emissions Absolute GHG of the following: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), emissions per year hydrofluorocarbons, perfluorocarbons, and sulphur hexafluoride (SF6). [tCO2e/year] Emissions can be disaggregated by sector and gas, if available. The MDBs will work on development of principles for calculating and reporting this indicator. Results Indicators – Mitigation Sectoral Indicators Sector Result Indicator Definition Area This indicator measures the generation capacity of renewable energy to be enabled with (i) direct investments (i.e. physical infrastructure (greenfield), or (ii) indirect support (i.e. enabling infrastructure and activities (transport and energy storage); and support to investment Renewable energy in renewable energy markets (project and corporate financing and Energy capacity enabled guarantees). Renewable energy generated may be electricity, heat, [GW] cooling energy, or mechanical energy. Eligible renewable energy is described in activities 2.1 and 5.10 of the Common Principles. The capacity enabled should be additional to the existing capacity. (i) The units for non-electric applications are in equivalent GW. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 26 Sector Result Indicator Definition Area This indicator measures the trips made by passengers using vehicles with lower GHG emissions than those operating on fossil fuels, or fossil fuel transport vehicles that generate a modal shift. It includes all eligible activities in the Common Principles in projects where passenger trips are measured, activities 8.1–8.9. Broadly, indicator 2 covers: (i) public transport, railway, or waterway passenger transport with modal shift or improvement of existing systems, (ii) electric, hybrid, or hydrogen fuel Passenger trips by low- cell vehicles, or vehicles operating on biofuels or synthetic fuels with carbon mode or vehicle low lifecycle emissions (with or without modal shift), and (iii) electric or [Passenger-trips/year] human-powered personal mobility. Where possible MDBs may enrich the indicator by providing the distance traveled per passenger resulting in a passenger-kms/year indicator. i.e. Passenger trips by low carbon mode [Passenger-kms/year]. Where applicable, the indicator can be disaggregated to pinpoint the activities that produce no direct emissions i.e. Passenger trips in vehicles with zero direct emissions [Passenger trips/year]. Transport This indicator measures the weight of goods transported each year using vehicles with lower GHG emissions than those operating on fossil fuels, or vehicles operating on fossil fuels that generate a modal shift. It includes all eligible activities in the Common Principles in projects where the mass of freight is measured, activities 8.3, 8.5–8.7, and 8.9. Broadly, indicator 3 covers: (i) railway or waterway transport with modal shift or improvement of existing systems, and (ii) electric, hybrid, or hydrogen fuel cell vehicles, Transport of goods by or vehicles operating on biofuels or synthetic fuels with low lifecycle low-carbon mode or emissions (with or without modal shift). vehicles [Tons/year] Where possible MDBs may enrich the indicator by providing the distance over which the goods have been transported resulting in tons-kms/year indicator i.e. Transport of goods by low-carbon mode or vehicles [Tons- km/year]. Where applicable, the indicator can be disaggregated to pinpoint the activities that produce no direct emissions i.e. Transport of goods in vehicles with zero direct emissions’ [Tons/year]. This indicator measures electrification and hydrogen to decarbonize Conversion of energy industrial processes. It includes all eligible activities, as described Industry source in industrial in activity 4.4 and use of hydrogen as described in activity 4.9 in the processes [MWh/year] Common Principles. Floor area with emission reductions Emission reductions in buildings refers to the criteria in activity 9.2 of the Buildings in new or retrofitted Common Principles (including greenfield and brownfield buildings). buildings [m2] COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 27 Sector Result Indicator Definition Area This indicator measures the tons of solid waste processed in a manner Amount of solid waste consistent with activities 7.3–7.12 of the Common Principles. processed with low- Waste, emission systems Where applicable, the indicator can be disaggregated to pinpoint the wastewater [Tons] amount of solid waste processed in a manner consistent with activities and circular 7.3-7.8 of the Common Principles. economy Volume of wastewater This indicator measures m3 of wastewater processed in systems that are processed with low- improved or established in a manner consistent with activities 6.4-6.8 of emission systems [m3] the Common Principles. The indicator measures the terrestrial and inland/near-shore aquatic areas (hectares) that are under enhanced protection, conservation, restoration, or sustainable management that sequester or reduce Terrestrial and emissions. This captures: Agriculture, aquatic areas (i) Natural surface area under conservation or sustainable environmental forestry, under conservation management including natural land and water bodies, as covered by land use and or sustainable activities 5.2, 5.6, and 5.7 of the Common Principles; and fisheries management [Hectares] (ii) Agricultural and aquaculture areas under sustainable management including cultivation of crops, livestock farming, fisheries, and production of forestry products, as covered by activities 5.1–5.5 and 5.8 of the Common Principles. This indicator captures activities in projects that improve energy efficiency in activities. This includes: (i) Energy efficiency improvement in production and transport of energy or conversion from waste to energy – as captured by activities 2.5–2.7, 2.10, 2.11, 2.13, and 4.10 of the Common Principles; and (ii) Energy efficiency improvement or use of energy from waste in Energy efficiency Cross- consumption of energy – as captured by activities 4.1–4.3, 5.1, 7.13, 9.1, improvements under sectoral 10.1–10.2, and 12.1–12.2 of the Common Principles. activities [MWh/year] (iii) Energy efficiency improvements in water supply and wastewater management – as captured by activities 6.1-6.5 of the Common Principles. (iv) Activities that reduce curtailment of renewable energy complements indicator 1 and concerns projects involving storage, transport, or other measures that decrease curtailment of renewable energy in existing capacity, in contrast to installation of new capacity in indicator 1. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 28 Sector Result Indicator Definition Area This indicator will track the number of businesses and people, supported Number of by MDBs via financial intermediaries, accessing financial products and beneficiaries with services to fund eligible mitigation activities included in the Common access to financial Principles. products and Cross- Where applicable, this indicator should be disaggregated to present services via financial sectoral the percentage of women or female owned or led businesses accessing intermediaries that support climate financial products and services. This can be captured under the proposed mitigation activities indicator or tracked directly as ‘Number of female beneficiaries with [Number] access to financial products and services that support climate mitigation activities’. MDBs will endeavour to avoid potential double counting. For example, if a building has on-site renewable ener- gy generation under the buildings indicator, the installed capacity should not be counted again under the first indicator on renewable energy. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 29 ANNEX 5 COUNTRY AND CLIENT TRANSITION INDICATORS Global Context Indicators – Country Transition Progress Context Area Indicator Definition This indicator captures the number of countries with a formal Countries with Long-term submission to the UNFCCC of an LTS (with consideration of Strategies [Number] countries with quantified analysis). This indicator captures the number of countries having Countries with Nationally formally submitted Nationally determined contributions to determined contributions UNFCCC, by the most recent submission deadline and having [Number] submitted documentation on delivery progress, including National communications and Biennial transparency reports. This indicator captures the number of countries having Countries with climate conducted up-to-date assessments of climate hazards, climate Country vulnerability and risk assessment change impacts and exposure to risks and vulnerabilities, as Transition [Number] referenced in National adaptation communication submissions Progress to UNFCCC. This indicator captures the number of countries having Countries with National put in place gender-responsive national adaptation plans, adaptation plans [Number] policy instruments and planning processes or strategies, as referenced in National adaptation plan submission to UNFCCC. This indicator captures the number of countries having Countries with resilience designed, established and operationalized systems for monitoring, evaluation and monitoring, evaluation and learning for national adaptation learning systems [Number] efforts, as referenced in National adaptation communication submissions to UNFCCC. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 30 Results Indicators – Country and Client Transition Support Results Area Indicator Definition This indicator measures the number of countries supported by MDBs through advisory activities and technical assistance. Policies supported should enable countries and clients (including via capacity building provided by MDBs) to undertake a just transition to low-carbon, climate-resilient and sustainable development. The indicator tracks the number of countries receiving Countries supported in climate support at the national, sub-national, and sectoral levels, policy, legal and regulatory including, but not limited to those supporting Long-term development and implementation strategies, Nationally Determined Contributions, National [Number] Adaptation Plans, Just Transition strategies, green economy plans, frameworks for greening financial systems and carbon markets development. The indicator is intended to capture both the development of new policies and the improvement of existing ones and would be disaggregated, inter alia by thematic coverage, sector and inclusion of wider social and gender considerations, and potentially by stage of development/implementation and number of beneficiaries of capacity building where applicable and feasible. Transition This indicator tracks the number of corporates and financial Support intermediaries receiving support in the development and/ or implementation of climate-related strategies, plans, procedures, frameworks, disclosures and related capacity building from MDB advisory activities and technical assistance. The interventions are expected to support clients in their efforts to decarbonize, enhance resilience, and improve climate-related governance and operations. Corporates and financial Key areas of support include: transition plans and related intermediaries supported governance and implementation procedures supporting in climate transition plan decarbonization and building climate resilience; climate- and readiness condition related disclosures aligning with international reporting development and standards (e.g., TCFD, CDP, ISSB); readiness conditions for implementation [Number] less advanced clients, including the development of GHG accounting systems, physical climate risk management capabilities. The indicator could be disaggregated inter alia by institution type, thematic coverage, sector and inclusion of wider social and gender considerations, and potentially by stage of development/implementation and number of beneficiaries of capacity building. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 31 Results Area Indicator Definition Common Just Transition indicators, beyond the considerations under Country support, above, remain under development. Just Transition and wider social Common indicators demonstrating joint Gender/climate and Fragility/climate results, beyond those interlinkages included in the Adaptation, Mitigation, Country support and Finance mobilization, sections of this paper also remain under consideration This indicator tracks the volume of activity climate finance by private direct mobilization and private indirect mobilization Volume of private climate (i.e. total private mobilization) climate finance. This finance mobilized both directly recognizes and measures the private capital mobilized in and indirectly [US$ mn] MDB project activities, as reported in the Joint MDB Climate Finance Report. This indicator will track the number of businesses, including MSMEs, supported by MDBs via financial intermediaries, in Beneficiaries accessing getting access to financial products and services to fund climate financing via financial eligible activities included in the Common Principles for intermediaries and funds Climate Mitigation and Adaptation Finance Tracking. It will [Number] be disaggregated by thematic coverage and gender where applicable and feasible. Finance mobilization27 This indicator will track the number of clients supported Beneficiaries accessing climate by MDBs using instruments that will help them to mobilize finance via other instruments private finance to support eligible activities in the Common mobilizing private finance Principles for Climate Mitigation and Adaptation Finance [Number] Tracking. It will be disaggregated by thematic coverage and gender where applicable and feasible. This indicator tracks the number of sovereigns, sub- nationals, corporates, and financial institutions that issue Issuance supported by MDBs of climate related bonds, including green, blue, sustainability climate related bonds [number and sustainability-linked bonds, with the support of MDBs; of issuers and US$ mn] and the volume issued. It may be disaggregated by issuer type, thematic coverage, and gender considerations, where applicable and feasible. The MDB and IFI working group on private finance mobilization is working to update their methodologies, expected early in 2025 this will 27 need to be considered in future improvements to these indicators. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 32 ANNEX 6 CONTEXT FOR COUNTRY AND CLIENT TRANSITION Country and Client Transition Support MDBs provide a range of finance and advisory services to support countries in their efforts to reduce green- house gas (GHG) emissions and drive adaptation and resilience, while delivering on broader development goals. The Common Approach focuses on a sub-set of catalytic engagements which includes the following: z Increasing climate ambition and ownership: Including the provision of market signals to boost investor confidence, improving policy instruments and implementation by engaging a range of stakeholders and improving in-country coordination; z Enabling regulatory environments: Supporting the development of policies, laws and regulations that help countries transition towards low-emission, resilient, and equitable economic development; z Climate governance and capacity building: Providing advisory and technical support to help public and private clients build climate governance at system-level, improve climate risk management, and enhance transparency and knowledge; z Greening financial systems and developing green capital markets: Engaging with central banks and financial regulators, encouraging the development of environmentally sustainable financial practices across financial institutions, and developing local green capital markets to increase demand for green finance. While the results of direct investments can be identified through the indicators set out in the climate miti- gation and adaptation sections above, capturing the effects of these catalytic engagements is often more challenging, largely due to: z Attribution complexity: The difficulty of isolating the specific contribution of a single intervention (e.g., MDB support) from the broader ecosystem of actors and factors influencing outcomes. z Time lag in results: Catalytic interventions often take a significant amount of time to produce visible out- comes. Reforms in financial systems, for example, may take years to fully materialize, making it difficult to capture results within typical project evaluation periods. z Indirect outcomes: Catalytic effects can lead to indirect or second-order impacts, such as encouraging private sector investments or influencing policy reforms. These often follow complex pathways that are harder to track and measure using traditional metrics. z Behavioral, institutional change: Catalytic interventions often seek to trigger shifts in behavior or institu- tional practice, which are qualitative and harder to measure using conventional metrics. Just Transition and Wider Social Interlinkages: In 2021 MDBs agreed on a set of high-level principles to guide MDB support for a just transition, and to ensure consistency, credibility, and transparency across their frameworks. Building on these principles, in 2024 MDBs worked on a set of Just Transition (JT) indicators. This remains work in progress, with the aim of proposing common JT indicators under the Common Approach by the end of 2025. JT indicators are expected to closely align with existing indicators that MDBs already use to report on so- cio-economic outcomes, including under Enabling conditions, above. However, for indicators to qualify as COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 33 Just Transition-specific, the transition context must be understood, and the intention ascertained in advance. This is necessary to distinguish JT initiatives from other general development interventions. The alignment of JT initiatives with NDCs or LTSs provides further clarity, linking them to national decarbonization and adapta- tion policies. Further, it is important to recognize that not all JT interventions are strictly linked to MDB climate finance; some may support climate objectives indirectly or go beyond the scope of the project or program financed by an MDB. Categories and examples of Just Transition indicators: z Institutions and stakeholders: This includes JT diagnostics, strategy development, planning, and stake- holder engagement, which are vital to align policy and institutional frameworks with JT goals. Example indicator: Just transition advisory services delivered (number of engagements) z Employment, skills, and livelihoods: Indicators in this area focus on education, skills development, job retraining, employment opportunities, and social protection measures aimed at supporting workers and communities during the transition. Example indicator: Directly and indirectly affected workers receiving support and benefiting from the project (number of beneficiaries) z Infrastructure and Productivity: This captures economic productivity, sectoral diversification, support for small and medium enterprises (SMEs), site repurposing and rehabilitation, and the development of low-carbon infrastructure essential for a sustainable future. Example indicator: People benefiting from access to upgraded infrastructure and services (number of ben- eficiaries) Further, in recognizing (i) that social inclusion and gender equality can accelerate GHG emissions reductions and climate resilience; and (ii) the risk that the transition can create new or deepen existing social inequality, the Common Approach underlines the importance of engaging wider considerations, such as social inclusion, gender equality, conflict and migration, health, and economic inclusion in the design and delivery of climate action, and seeks also to reflect MDB support to an inclusive transition. Support to gender equality and women’s economic empowerment is therefore included as a cross-cutting con- sideration across Common Approach indicators, through relevant indicators (e.g. in resilience building) and targeting and disaggregation of beneficiaries (population and enterprises) where relevant (e.g. disaggregation of MSMEs supported by women-owned or led enterprises, according to established 2X, WE-FI or similar MDB, criteria). Further, MDBs recognize the need to reflect whether supported climate transition plans, included under Enabling conditions above, are informed by gender and social equity considerations and more broadly, to reflect the proportion of their climate infrastructure and service investments that have been designed with a gender lens to contribute to reduce a known gender gap or expand access for women. In addition, recognizing the heightened vulnerability of those living in fragile and conflict-affected environ- ments to the impacts of climate change, MDBs are considering specific climate-related Fragility, Conflict and Violence (FCV)-oriented indicators. Options include standardizing reporting on climate results in fragile or conflict-affected situations, as well as establishing dedicated sector results focused on the climate/FCV nex- us. This could include capturing interventions that support displaced people and host communities, as well as communities otherwise affected by conflict, through the provision of adequate services and livelihoods that enhance climate resilience. The development of such indicators will be guided by technical bodies, including the Cross-MDB Working Group on FCV. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 34 Finance Mobilization Public sector climate co-finance and private sector climate co-finance (including both private direct and pri- vate indirect climate finance mobilization, following the definitions and recommendations of the MDB Task- force on Private Investment Mobilization), are reported as climate co-finance in the annual Joint Report on Multilateral Development Bank’s Climate Finance. Given the wide range of activities that MDBs undertake in support of public and private sector clients and the customized nature of their interventions, the limited set of indicators proposed under the Common Approach is not presented as an exhaustive or definitive list, but is rather considered a basis for further development, to improve the robustness and comprehensiveness of the list proposed. COMMON APPROACH TO MEASURING CLIMATE RESULTS • UPDATE ON INDICATORS 35