World Bank asked to exclude fossil fuel investments
Senior officials from Europe have urged the World Bank’s management to expand its climate change strategy to exclude investments in oil and coal-related projects around the world, and gradually phase out investment in natural gas projects, according to three sources familiar with the matter.
In the six-page letter, World Bank executive directors representing major European shareholder countries and Canada, welcomed moves by the bank to ensure its lending supports efforts to reduce carbon emissions.
But they urged the World Bank - the biggest provider of climate finance to the developing world - to go even further.
“We...think the bank should now go further and also exclude all coal and oil-related investments, and further outline a policy on gradually phasing out gas power generation to only invest in gas in exceptional circumstances,” the European officials wrote in the letter, excerpts of which were seen by Reuters.
The officials took note of the World Bank’s $620 million investment in a multibillion-dollar liquefied natural gas project in Mozambique approved by the bank’s board in January, but did not call for its cancellation, one of the sources said.
The World Bank confirmed receipt of the letter but did not disclose all its contents. It noted that the World Bank and its sister organisations had provided $83 billion for climate action over the past five years. “Many of the initiatives called for in the letter from our shareholders are already planned or in discussion for our draft Climate Change Action Plan for 2021-2025, which management is working to finalise in the coming month,” the Bank told Reuters in an emailed statement.
The bank’s first climate action plan began in fiscal year 2016.
The United States, the largest shareholder in the World Bank, this month rejoined the 2015 Paris climate accord, and has vowed to move multilateral institutions and US public lending institutions toward “climate-aligned investments and away from high-carbon investments.”
World Bank President David Malpass told finance officials from the Group of 20 economies on Friday that the bank would make record investments in climate change mitigation and adaptation for a second consecutive year in 2021.
“Inequality, poverty, and climate change will be the defining issues of our age,” Malpass told the officials. “It is time to think big and act big in finding solutions,”
He said it was also launching new reviews to integrate climate into all its country diagnostics and strategies, a step initiated before the letter from the European officials, said one of the sources.
Published in The Express Tribune, February 28th, 2021.
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