The World Bank Group is promoting smart development as an approach that allows countries and companies to meet urgent development needs while also building climate resilience and reducing emissions. The concept focuses on designing investments in roads, agriculture, waste management, energy, digital access and public services so they last longer, perform better and create more value.
Smart development is based on the idea that climate action and economic development do not have to compete with each other. When investments are planned well, they can strengthen infrastructure, protect communities from climate shocks, improve efficiency and support job creation at the same time.
The World Bank Group describes these added climate-related benefits as climate co-benefits. These are the parts of development projects that help them remain effective in a changing climate or use technologies and efficiencies that reduce emissions.
Climate co-benefits vary across projects. Some investments may have a large climate component, such as microfinance support for sustainable agriculture and flood-risk management. Others may include smaller but important resilience measures, such as improving access roads in flood-prone areas around industrial parks.
In the last fiscal year, the World Bank Group delivered USD 50.8 billion in development finance with climate co-benefits. Of this amount, USD 33 billion supported activities that reduced project emissions, showing how climate-smart development is being applied across multiple sectors.
Although renewable energy is often associated with climate finance, only 17 percent of the USD 33 billion in emissions-reducing finance supported renewable power generation. This shows that climate-smart investment also includes transport, agriculture, water, sanitation, health, education and other core development sectors.
In transport, smart development can include flood-resilient roads, shifting freight from trucks to rail and replacing diesel buses with electric vehicles. In agriculture, it can include heat-resistant seeds, efficient water use and climate-resilient farming practices that help protect harvests during extreme weather.
The approach also applies to schools and hospitals. Buildings with better insulation, cooling systems and storm-resistant structures can help education and health services continue operating during disasters, protecting vulnerable communities and essential public services.
Several World Bank-supported projects show this approach in practice. In India, a project in Maharashtra is helping farmers adopt climate-resilient practices across 12.5 million hectares, benefiting more than 1.3 million smallholders through farmer field schools, resilient technologies and digital services.
In Malawi, a social cash transfer programme has provided emergency support to nearly 300,000 households during droughts. This assistance has helped protect food security and support faster recovery from climate-related shocks.
In Brazil, World Bank Group support for water and sanitation has improved access to water, sewage collection and wastewater treatment in São Paulo. More than 3 million people have improved access to water and sewage collection, while over 1 million people have gained access to wastewater treatment, alongside benefits for emissions reduction and biodiversity.
The World Bank Group says projects active as of the end of June 2025 have helped 136 million people become more resilient to climate risks. They have also supported improved food and nutrition security for 208.8 million people and expanded access to energy for 214 million people.
The institution also reported improved management of 92.7 million hectares of terrestrial and aquatic areas. Its interventions are expected to reduce greenhouse gas emissions by 331.8 million metric tons of carbon dioxide equivalent per year.
The article emphasizes that the need for smart development is becoming more urgent as droughts, storms and floods become more frequent and severe. At the same time, developing markets must create jobs for millions of young people entering the workforce.
Meeting these challenges will require investment in resilient infrastructure, including roads, power, digital systems, clean air, land, water and health services. It will also require policy and regulatory reforms that can attract private capital at scale.
Overall, smart development presents climate action as a practical development multiplier rather than a trade-off. By combining resilience, emissions reduction, job creation and infrastructure investment, countries can build stronger foundations for sustainable growth.
