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Daily CSR

Daily CSR
Daily news about corporate social responsibility, ethics and sustainability

World Bank and Deutsche Bank gets approval to access Green Climate Funds


Representatives of civil society were aghast at finding out that the board of the Green Climate Fund has allowed institutions with dubious environmental records access to the precious Green Climate Funds.

Representatives from civil society who have attended the Green Climate Fund (GCF) board meeting in Songdo, South Korea, have strongly expressed their disappointment and disagreement with the board for their decision to accredit
Deutsche Bank with GCF funds. Deutsche Banks is the world’s largest financier of the coal industry.
The Green Climate Fund is the United Nation’s premier funding mechanism created so as to developing countries mitigate their climate change related policies.
At the Copenhagen Climate Summit in 2009, donors had agreed to mobilise $100 billion a year by 2020. This was to happen in an undefined mix through private and public funding. The GCF has been the cornerstone of this mobilisation.
Although representatives of environmental developments and social justice organisations support the GCF in principle, they feel that “it needs to change direction away from accrediting controversial big banks that are heavily invested in fossil fuels and thus actually exacerbating climate change.”
The Board has chosen to approve 13 applicants amongst whom are the World Bank, whose climate record is controversial at best, and Deutsche Bank.
“This encouraged political horse-trading between Board members over which applicants get approved, leading to tit-for-tat approval of applicants despite very serious reservations,” said the Group on Thursday.
The organisations which form part of the Group are, Friends of the Earth, ActionAid International, Women’s Environment and Development Organization (WEDO) and the Third World Network along with a host of other grassroots organisations.
“[Deutsche Bank] has been criticized for its very poor record on human rights monitoring, was awarded the ‘Black Planet Award’ for environmentally destructive business policies, and recently received a record fine for market manipulation and obstructing regulators,” said their statement.
Their statement further went on to add, “The GCF claims zero tolerance towards money-laundering, but has accredited Deutsche Bank despite the fact that two national regulators have this year fined it for the poor state of its anti-money-laundering governance.”
Lidy Nacpil, a representative of the Asian Peoples Movement on Debt and Development (APMDD), at the GCF board meeting, said, “Neither Deutsche Bank nor the World Bank can hold up to the highest fiduciary and financial accountability standards, as well as enforce social-economic and environmental safeguards.”
She went on to say, “In addition, they continue to be among the biggest bankrollers of dirty energy, as well as false solutions such as palm oil and agrofuels. And despite their public commitment to the transition to renewables and clean energy, they show no signs of slowing down.”
There are 11 other accredited institutions by the GCF Board. They are, Rwanda’s Ministry of Natural Resources, Corporación Andina de Fomento (Development Bank of Latin America), Agence Française de Développement, Africa Finance Corporation, United Nations Environment Programme, Conservation International, Namibia’s Environmental Investment Fund, Caribbean Community Climate Change Center, Inter-American Development Bank, European Bank for Reconstruction and Development and India’s National Bank for Agriculture and Rural Development.
These aforementioned institutions are allowed access to GCF funds. They in turn will disburse them to groups who will actually be implementing the projects in developing countries.
“Unfortunately, with this decision [to accredit Deutsche Bank and the World Bank], the Green Climate Fund is proving to be more ‘business as usual’ rather than ‘transformational,’” said Nacpil.
The Director of the Finance Centre of the World Resource Institute, Ms. Athena Ballesteros, welcome the inclusion of national entities, saying, “The future of effectiveness of climate financing rests on empowered national institutions which will be the main engine of countries’ implementation of climate action plans.”
“Today’s decision demonstrates that developing country institutions, even relatively small ones, can meet international standards of best practice in financial and project management and environmental and social protections,” she said.