Intl. Finance Corporation making progress on reducing exposure to coal, must now address other fossil fuels

Author: Kristen Genovese, Marian Ingrams and Kate Geary, Bank Information Center Europe and Centre for Research on Multinational Corporations (SOMO), Published on: 29 November 2018

"...The IFC has transformed the way it lends over the last decade since the fnancial crisis, shifting from fnancing projects directly to investing via third parties, such as commercial banks or private equity funds. This form of ‘hands-off’ lending through fnancial intermediaries (FIs) has embroiled the IFC in a number of scandals, linking it to human rights abuses and environmental destruction from Honduras to Cambodia. Following public outcry, disastrous media coverage, damaging fndings from IFC’s independent accountability mechanism and pressure from the Board, the IFC has begun to reform its FI lending...

...By tracking 148 medium and high risk FI investments from March 2017 to August 2018, this research aimed to uncover whether real change was evidenced in how the IFC spent over $10 billion in mid to high-risk investments...

The majority (53 out of 67) of IFC’s investments in its largest FI client sector – commercial banks – are now ‘ring fenced’ to specifc purposes such as lending to small and medium enterprises (SMEs), climate fnance and women’s economic empowerment. And a step civil society has long urged has begun to be taken: in a small number of FI investments, the IFC has explicitly excluded coal and large dams and also required its clients to omit projects that cause significant harm to indigenous people and biodiversity, or that lead to resettlement of affected communities. In response to this report, the IFC claimed that it excluded coal from fully 95% of its FI portfolio, though this was not publicly available information. These are promising shifts that potentially signal a vastly different and less harmful future for IFC’s FI portfolio..."

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