Reporting Accountability February 2025(FROM WB Accountability Mechanism)

https://accountability.worldbank.org/en/news/2025/Reporting-Accountabili...

Welcome to the February 2025 round-up of accountability knowledge products. Following on from the “finance COP” in Baku, Azerbaijan in November 2024, it’s perhaps not surprising that there has been a slew of reports related to climate finance. Two reports from Recourse address the big numbers touted by multilateral development banks as addressing climate change, while IFC’s Sustainability Framework also comes under scrutiny by its Compliance Advisor Ombudsman. There’s also a report on the need to temper the transition mineral rush. Finally, the Defenders in Development Campaign considers whether it's wise to invest development finance in highly repressive contexts. 

Strengthening greenhouse gas mitigation in IFC-financed projects: CAO Insights Series to inform IFC’s Sustainability Framework Review

IFC’s Environmental and Social Sustainability Framework, including the Performance Standards, is being reviewed, and its Compliance Advisor Ombudsman (CAO) has produced an advisory report analyzing selected IFC-financed projects, including relevant CAO cases, a review of global good practices, and experts’ advice.

In the context of the World Bank Group’s commitment to align with the Paris Agreement on climate, the report provides an overview of IFC’s responsibilities under its Sustainability Framework to reduce and report on greenhouse gas (GHG) emissions from projects it finances and areas where IFC’s efforts could be strengthened. These recommendations include aligning client GHG reporting requirements with good practice; extending protection for carbon sinks to ensure that ecosystems that store or sequester carbon are protected; and facilitating the adoption of innovative clean technologies.

The report also suggests aligning IFC’s GHG accounting and reporting practices, and its substantial investments in financial intermediaries, with global standards.

A safe pair of hands? How the multilateral development banks fail to live up to expectations on climate finance

Climate finance from multilateral development banks (MDBs) is reaching new heights, at USD 125 billion in 2023, but a report queries the validity of such claims. Far from representing significant progress toward delivering global action on climate change, Recourse finds that MDBs are funding fossil fuels and highly polluting projects, and failing to prioritize the most climate-vulnerable countries. The report builds on  existing evidence that much of climate finance is poorly categorized, lacks transparency, and actually adds to debt distress in many countries. 

This report examines the MDBs’ record on climate finance to assess whether they are actually moving away from financing climate-damaging policies and practices, or whether business as usual prevails. It also makes recommendations for how MDB climate finance should be defined and accounted for to align with the Paris Agreement’s goals.

Banking on Renewables criteria for public investment in renewable energy for climate, for people, for planet

Alongside a report critiquing MDB claims to be at the forefront of delivering finance for climate change mitigation and adaptation (see above), Recourse has also published a set of criteria for public investment in the just transition. The Banking on Renewables criteria acknowledge that MDBs will have a massive role to play, and noting that much of their current efforts miss the mark, call on them to:

·         Power people and protect the planet

·         Ditch fossil fuels and false solutions

·         Invest in 100% renewable energy systems

·         Put people’s rights and needs before profit

·         Bank on renewables that do no harm.

The report uses case studies from India, Indonesia, Kenya, Tanzania, and Rwanda to demonstrate how involving communities early in the design and implementation of renewable energy projects can improve outcomes, while failing to do so has the opposite result.

Stop and listen: Pathways to meaningful engagement with rightsholders in the global rush to mine for transition minerals

Given the mining industry’s record of human rights and environmental abuse, the global scramble to extract transition minerals to power the shift to renewable energy should be seen as anything but clean or just. The Business & Human Rights Resource Centre highlights the sector’s flaws and the self-destructive consequences of failing to meaningfully engage with rightsholders such as local communities, including indigenous peoples, as well as governments. On the other hand, the report argues, a corporate commitment to engage can expedite the clean energy transition precisely because it is fair, and thereby much more likely to avoid social unrest, conflicts, and litigation.

Such an approach includes fair negotiations and true access to information; respect for human and environmental rights; and commitment to shared prosperity with mining-affected communities. Three case studies, from India, Brazil, and Portugal, are used to warn of the risks of not adequately engaging with local communities.

Financing repression – Defenders in development

“Financing Repression”, by the Coalition for Human Rights in Development, International Accountability Project, and Early Warning System, uses data from the latter’s database to look at investments by MDBs in countries in highly repressive contexts, characterized by a shrinking or closed civic space where people cannot publicly voice their concerns and civil society groups are unable to operate freely.  

The report finds, for example, that the biggest MDBs have invested at least USD 88 billion in over 1,000 projects in 18 such countries between 2019 and 2023. Five case studies from Azerbaijan, Egypt, Tajikistan, Uzbekistan, and Vietnam show how civic space restrictions pose serious risks for human rights defenders and communities that speak out about development projects. While there are differing opinions on whether MDBs should invest at all in highly repressive contexts, the report makes a strong case for extreme caution in doing so.

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