The World Bank Group Tuesday said it will stop financing upstream oil and gas after 2019, as part of a wider commitment to global efforts to halt climate change.
"As a global multilateral development institution, the World Bank Group is continuing to transform its own operations in recognition of a rapidly changing world," the bank said Tuesday in a statement.
"The World Bank Group will no longer finance upstream oil and gas, after 2019," it said.
However, in exceptional circumstances, the bank will consider financing upstream natural gas in the poorest countries where there is a clear benefit in terms of energy access for the poor, and if the project fits within the country's commitments under the Paris Agreement, the multilateral lender said.
The World Bank Group made the announcement at the One Planet summit in Paris, which it convened along with President Emmanuel Macron of France and United Nations Secretary General Antonio Guterres.
Of the bank's total lending of $22.6 billion in fiscal 2017, $4.4 billion went to energy and extractive industries, according to its 2017 annual report.
The World Bank Group also said it is on track to meet its target of 28% of its lending going to climate action by 2020 and to meeting the goals of its Climate Change Action Plan, which it developed following the 2015 Paris Agreement on climate change.
"In line with countries submitting updated and potentially more ambitious Nationally Determined Contributions, the World Bank Group will present a stock-take of its Climate Change Action Plan and announce new commitments and targets beyond 2020 at COP24 in Poland in 2018," it said.
In addition, starting in 2018, the bank will report the greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy. The results will be published annually starting late 2018, it said.
The World Bank will also apply a shadow carbon price in the economic analysis of all projects in key high-emitting sectors where design has begun since July 2017, through its two lending arms, the International Bank for Reconstruction and Development and the International Development Association, it said.
Shadow carbon prices allow an organization to model the economic impact of carbon pricing on assets, investments or strategies.