In the green trenches: the European investment bank’s quest to become the EU’s climate bank

By declaring its ambition to become ‘Europe’s climate bank’ in 2019, the European Investment Bank (EIB) positioned itself at the center of the European Union’s sustainable finance policy regime, seeking to translate climate leadership into renewed institutional legitimacy and strategic relevance. Unlike previous expansions of EIB’s policy remit, which were underpinned by dedicated EU funding or shareholder capital infusions, this significant increase in responsibilities unfolded without commensurate external financial support. While the EIB’s climate commitments could have remained largely symbolic, we identify a substantive reorientation of its business model and financing activities. Beginning in 2021, the Bank has proactively scaled up its climate financing using its own capital base, accompanied by internal reforms and a deliberate shift toward a broader portfolio of climate-aligned, higher-risk activities. We explain this thorough reorientation of the EIB in the wake of its climate pivot as a response to the path-dependent opportunities it offered to generate additional business volume, restore stakeholder legitimacy amid inter-institutional frictions, retain previously accumulated institutional capabilities, and assert leadership in the field of development banking. Focusing on the largest provider of sustainable finance in the EU, our piece sheds light on actor motivations, trade-offs, and compromises that structure this field.