Campaign Pushes World Bank to Report Its Portfolio’s Carbon Footprint
International climate campaigners scored a major victory at the World Bank’s annual meeting in New York last Friday, when Bank President Jim Yong Kim promised to begin reporting carbon emissions across the institution’s lending portfolio in 2018.
“Next year,” Kim said, in a 10-second video clip during a public town hall meeting. The commitment followed sustained pressure from The Big Shift Global, a civil society campaign pushing international financial institutions to phase out fossil fuels, phase in renewable energy, and provide energy access for all.
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While Kim has declared that “we can’t end poverty without protecting the planet and its people,” and the World Bank aims to devote 28% of its funding to climate-related projects by 2020, E3G climate finance specialist Helena Wright notes the Washington-based institution has been falling behind some major corporations in confronting its own climate impact.
“For all its lofty ambitions, the development bank does not track the greenhouse gas emissions of its portfolio, let alone have a target to reduce them,” she writes on Climate Home. “In this, it is lagging behind major corporations, some of which may make unlikely climate heroes.” Walmart set a science-based target last year to align its emissions with the below-2.0°C target in the Paris agreement, then Gap Inc., Nike Inc., and Levi Strauss & Co. followed suit.
But while more than 300 major companies have now made similar commitments, “the World Bank only monitors ‘direct’ emissions: things like staff travel and office energy use,” Wright notes. “These only account for a tiny portion of its overall impact,” compared to the US$64 billion in development loans it issued in 2016 alone.
“Its investment decisions—gas plant or community solar project, bus network or airport—make a much bigger difference to the climate than how the Bank’s employees get to work.”
Those choices across the entire family of multilateral development banks (MDBs) added up to $28 billion in fossil investment between 2014 and 2016, Oil Change International revealed in a report released on the eve of the World Bank meeting. The total included $9 billion in 2016, the year after the Paris conference.
“Despite the Paris agreement being reached, multilateral development banks that say all the right things on climate are still financing billions of dollars in oil, gas, and coal projects,” said Oil Change Senior Campaigner Alex Doukas. “They are using relatively scarce public resources that need to be used as strategically as possible if we have a hope of meeting the agreement’s aims. If they really want to help lift people out of poverty, taxpayer-funded banks can no longer finance climate destruction. They must stop funding fossil fuels.”
“Global energy markets are complex, as is the role of fossil fuels in economies and human societies,” Oil Change adds in its post on EcoWatch. “But the climate science is clear. Financing long-term fossil fuel infrastructure without innovative transition plans will set countries and the world up to fail. The poor and vulnerable will be hardest hit. Because public finance often crowds in additional investment and sends broader market signals, it is especially critical that these scarce resources are used to accelerate the clean energy transition.”
Oil Change calls on the World Bank and the other MDBs to cut off all finance for coal projects and fossil fuel exploration, end all fossil financing by 2020, “except for very rare circumstances where no other option is available to support energy access for the poor”, and shift internal staff incentives and project evaluation criteria to support a transition to sustainable energy for all.
In Philippines, meanwhile, more than 100 citizens’ groups and 19 affected communities filed a complaint accusing the International Finance Corporation (IFC), the World Bank’s private finance arm, of fueling climate change by investing in a Philippine bank that has been a major source of coal industry financing.
“By providing funds to intermediaries that are bankrolling a new generation of coal plants, the IFC is lending its imprimatur to the deaths and destruction caused by coal plant operations,” said complainant Aaron Pedrosa of the Philippine Movement for Climate Justice, whose home was destroyed by Typhoon Haiyan in 2013. “The IFC is in effect issuing a licence to kill. It should be held to account.”
Coal-fired electricity “threatens the very existence of the Philippines,” Inclusive Development International (IDI) noted in a release, and “activists who speak out against such projects face grave danger. Anti-coal campaigner Gloria Capitan was murdered in July 2016 for opposing the expansion of coal, including several projects that received indirect IFC backing. In 2016, 28 environmental and land defenders were murdered in the Philippines, making the country one of the most dangerous in the world for such work.”
“If the world’s preeminent development finance institution can’t stop bankrolling dirty coal plants and instead support developing countries in making the shift to renewable energy technology, the consequences will be dire—for the Philippines and the rest of the world,” said IDI Managing Director David Pred. “Jim Yong Kim acknowledged as much last May when he said, ‘If Asia implements the coal-based plans now, I think we are finished.’ It’s now up to Dr. Kim to put his money where his mouth is.”