FOR IMMEDIATE RELEASE
November 9, 2022
World Bank Group and other major MDBs’ joint update on Paris alignment at COP27 lacks ambition on climate targets
Statement missing urgency and any mention of fossil funding phase out
The joint statement by the ten major multilateral development banks (MDBs) released today at COP27 once again missed the mark as it failed to provide specific details on how the MDBs will align their financial flows with a 1.5°C pathway, according to campaign group Big Shift Global.
In a letter published on 7 November 2022, Big Shift Global had urged the MDBs to “end all forms of fossil support by the end of 2022, and publish concrete strategies to rapidly scale support for clean energy access for all.” However, the update today reflected slow progress and indicated a lack of urgency by the MDBs on meeting their climate targets. Whilst the MDBs state they are on track to fulfil their Paris alignment commitments, the update gave no mention of the phasing out of fossil fuel financing.
This year, the World Bank Group, in particular, has come under increased scrutiny due to its inaction on climate. Last month, the World Bank Group annual meetings were drowned out by the noise of campaigners calling for the World Bank Group President David Malpass to step down due to his public comments that seemed to undermine the science of climate change. These calls grew even louder at COP27 in Sharm-El-Sheikh as several World Leaders once again underscored the need for the MDBs to reform so that the international financial system works for everyone.
A recent survey conducted with World Bank Group employees indicated that more than half (60.6%) of the Bank’s own employees believe that the World Bank Group is not doing enough to align itself with the Paris targets of limiting global warming to 1.5°C, whereas, more than 85% of World Bank Group employees believed that the Bank needs to be more transparent about its climate finance.
The Big Shift Global is calling for a careful review of the MDB definition of ‘Paris alignment’, which needs to go further than to support implementation of countries’ Nationally Determined Contributions (NDCs). They have also demanded that fossil gas, including liquefied natural gas (LNG), be ruled out by the MDBs as a “transition fuel” in coal dependent countries.
“We the members of Grow Green Network and Indus Consortium, being representatives of the flood affected people of Pakistan, demand that the MDBs fast track the Paris Agreement alignment process and stop all finance for fossil fuels to keep our country liveable”, said Fiza Qureshi, Indus Consortium, Pakistan.
"Instead of providing a clear signal that all forms of support for fossil fuels are unacceptable for public finance, MDBs choose to create a complicated, confusing and non-transparent methodology, that will only delay a fundamental transition in energy and other sectors", Petr Hlobil, Fossil Free Area Leader, CEE Bankwatch Networks.
“The MDB’s Paris Agreement alignment update today demonstrated that the process is too sluggish for the scale of change needed to stop catastrophic climate change. It appears that for development policy finance and intermediated finance the process has hardly started to get off the ground. It is vital that the MDBs bring the implementation date for this forward from 2025 to 2023: we cannot afford to prolong this process.” Fran Witt, Recourse.
“The MDBs update is at odds with many countries' climate goals and international pledges to end public finance to fossil fuels. They are not only not delivering on the Paris goals, they're also actively exploiting loopholes to continue financing fossil fuels. Instead of delaying action, MDBs need to step up and take the lead in leveraging finance away from fossil fuels and into renewables and the energy transition we need fast and at scale,” Charity Migwi, 350Africa.org Regional Campaigner.
“Despite claims of their Paris Alignment process being on track, MDBs are still funding fossils with no end in sight. The worst form of this is being allowed to continue through heavy-handed policy lending programs from the World Bank Group and others — locking Global South countries into expensive and volatile fossil fuel contracts and subsidy regimes. Meanwhile, MDBs have highlighted proudly in their joint statement that only 62% of their climate finance is flowing to low and middle income countries, a statistic completely at odds with securing a globally just energy transition.” Bronwen Tucker, Public Finance Campaign Co-Manager, Oil Change International.
“The MDBs’ pace and scale of action on Paris alignment does not reflect the urgency of the climate emergency. Even members of staff at the World Bank agree that the Bank is not doing enough on Paris alignment. Public finance cannot continue to fuel climate chaos. The MDBs need to get their act together and play a lead role in a just energy transition to ensure clean, secure, renewable energy for all.” Sophie Richmond, Global Lead Big Shift Campaign, Climate Action Network International.