World Bank report supports increased finance for environmentally responsible projects

United Kingdom

The World Bank’s Independent Evaluation Group released a report on 19 July 2008 entitled “Environmental Sustainability - An Evaluation of the World Bank Group Support

This report reviewed investments in approximately 7,000 projects between 1990 to 2007. The report concluded that performance in environmental sustainability had improved, but that more work is needed.

This report will be of particular interest to financial institutions and developers who are involved in projects which are supported by the World Bank Group, including the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).

Some of the key recommendations which will be of interest to the private sector are:

  • The World Bank should update its 2001 Environment Strategy for the growing role of the private sector, climate change and transnational environmental footprints.
  • In working with client counties, the World Bank needs to take into account longer-term sustainability goals. This work should include identifying opportunities to help client countries to develop longer-term goals such as pollution reduction, greenhouse gas abatement and adaption to climate change. Areas of joint activity could include promotion and development of public-private partnerships (PPPs) for water, waste water, waste management, recycling and environmentally responsible energy projects.
  • The IFC should increase its funding for projects which promote environmental sustainability through technology transfer and development of clean production, energy efficiency and sustainable supply chain management.
  • The IFC and MIGA should further encourage the adoption and use of the Equator Principles by financial institutions and IFC Policy and Performance Standards on Environmental and Social Sustainability by multilateral development banks.
  • The IFC needs to increase its resources to help financial intermediaries identify, monitor and mitigate environmental and social risks. Clients of IFC and MIGA, especially financial intermediaries, should be encouraged, among other things, to develop strong environmental and social management systems and use more independent environmental audits as part of project completion tests.
  • Co-ordination between MIGA, IFC and the World Bank and between the World Bank Group and external partners needs to be improved.

A management response noted that, in management’s view, a number of the recommendations were already being implemented.

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