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World Bank Group’s new Climate Change Action Plan fails to end financial flows to fossil fuels

WASHINGTON, D.C. – June 22, 2021 (Investorideas.com Newswire) Today, the World Bank Group released its new Climate Change Action Plan 2021-2025, which sets target timelines to align its operations with the Paris Agreement, and sets targets to increase climate finance. The plan also commits to support countries on a just transition away from coal and to reduce emissions across sectors.

The Bank’s first Climate Change Action Plan in 2016 laid out actions to expand climate investments in developing countries, but did not commit the Bank to eliminate fossil fuels from its portfolio.

The World Bank Group is the largest source of climate finance to developing countries. It also provides more support to fossil fuels than any other multilateral development bank, most of it to gas. Fossil gas, the fastest growing source of fossil fuels emissions globally, made up more than 75 percent of known fossil fuel support from multilateral development banks in 2020.

Luisa Galvao, International Policy Campaigner at Friends of the Earth U.S., issued the following statement in response:

The World Bank Group’s selective approach to phasing out fossil fuels is about as effective as throwing both water and gasoline at a house fire. With far-away Paris alignment dates, this Plan fails on both science and justice metrics.

The Climate Change Action Plan allows the World Bank Group to continue to expose the countries and communities it’s supposed to be supporting to the risks and harms of fossil fuel development.

Click for a full analysis of what the Climate Change Action Plan is missing.

Earlier this year, Friends of the Earth U.S. joined over 150 organizations in a letter calling on World Bank President David Malpass to adopt a whole-of-institution approach to end all its support for fossil fuels.

In 2016, nine multilateral development banks (MDBs), including the World Bank, committed to align their financial flows with the goals of the Paris Agreement. Despite this, the World Bank Group has provided $12 billion to fossil fuels through direct lending since then. However, that figure does not account for policy-based assistance, which has been proven to influence government tax and regulatory policies in favor of fossil fuel producers. That figure also omits the finance flowing to fossil fuels through the WBG’s increasing financial intermediaries portfolio, due to a troubling lack of data disclosure.

Friends of the Earth fights to create a more healthy and just world. Our current campaigns focus on promoting clean energy and solutions to climate change, ensuring the food we eat and products we use are safe and sustainable, and protecting marine ecosystems and the people who live and work near them.

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