A coalition of international climate and aid organizations is pressing the World Bank and other major development banks to disclose their carbon footprints, as more and more major corporations are already doing.
“Given that these large institutions are publicly funded, they ought to be taking the lead on these issues—especially as virtually all governments have agreed to take action on climate change under the Paris agreement,” writes E3G Senior Policy Advisor Helena Wright. “As the old adage goes, ‘you can’t manage what you don’t measure’—and having the right data is crucial for these banks to better manage their impacts.”
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Climate Action Network-International and Christian Aid are two of the major international organizations behind the Big Shift campaign, and Bank of England Gov. Mark Carney’s Task Force on Climate-related Financial Disclosures has also urged banks and insurers to disclose their GHG emissions. But “strikingly, given that the World Bank Group is one of the largest development institutions, it appears to be falling behind,” Wright notes.
“The Inter-American Development Bank (IDB), European Bank for Reconstruction and Development (EBRD), and European Investment Bank (EIB) are the leaders among the main six development banks, as they report on their emissions over their portfolio,” she adds. “The Asian Development Bank has recently committed to do this, but the World Bank Group and the African Development Bank still have some way to go.”
The development banks are particularly important to the task of aligning global finances with the goals of the Paris agreement because they operate in emerging economies with growing emissions, Wright explains. “If they continue to invest in high-carbon infrastructure they will be locking the world into a high-carbon future—contributing to dangerous impacts of climate change,” she notes. “The development banks need to urgently rule out projects not in line with global climate goals, such as fossil fuel exploration, or efficiency projects that extend the lifetime of polluting plants.”
She also warns that none of the banks have committed to zero deforestation policies, in contrast to private sector giants like McDonald’s, Unilever, Cargill, and Mars that have already done so.
While “metrics can be misleading”, and measuring emissions is just a step on the road to setting and achieving decarbonization targets, “reporting on emissions over the whole portfolio is a first step,” Wright concludes. “We need a clearer insight into the impact of these banks on climate change,” and the tools to gather that information “are already out there”.
