As the climate crisis escalates, public pressure is mounting for action by investors to stop financing fossil fuels. The call for ‘fossil free finance’ is targeting public development banks, whose mandates are at odds with climate-wrecking oil, gas and coal expansion. The World Bank Group is currently developing its new Climate Change Action Plan for 2021-25, providing a vital opportunity to align its policies and operations with the Paris Climate Agreement.
The World Bank’s private sector arm, the International Finance Corporation (IFC), has taken significant steps to decrease its exposure to coal as a result of years of campaigning by affected communities and their NGO allies. For example, IFC’s Green Equity Approach (GEA), in operation since 2019, aims to help some financial intermediary equity clients reduce their exposure to coal to zero or near zero by 2030, while excluding clients who have no plan to exit coal.
Recourse and Trend Asia today publish a new briefing focusing on the loopholes that allow IFC support for oil, coal and gas to continue via its financial intermediary equity clients. The briefing finds that IFC clients continue to fund coal plants and invest in gas and oil exploration and production all over the world. It also reveals that in the two years since its launch, IFC has signed up just two clients to the GEA, one of which has gone on to fund two massive new coal plants – Java 9 & 10 – in Indonesia.
The briefing calls on the IFC to: