Uncovering the Opacity: World Bank's Climate Finance Accountability Crisis

The World Bank has claimed to have delivered a record $42.6 billion in climate finance in fiscal year 2024, a 10% increase from the previous year. However, a new Oxfam report has found that up to $41 billion in World Bank climate finance over the past seven years is unaccounted for due to poor record-keeping practices. This raises serious concerns about the transparency and accountability of the Bank's climate finance efforts, just as the issue of climate finance is set to take center stage at the upcoming COP29 negotiations.

Uncovering the Opacity: World Bank's Climate Finance Accountability Crisis

Unaccounted Billions: The Troubling Findings

The Oxfam report found that between $24 billion and $41 billion in World Bank climate finance went unaccounted for between the time projects were approved and when they closed. This staggering amount is nearly equivalent to the climate finance the Bank claimed to have delivered in 2024 and represents almost 40% of all climate funds disbursed by the Bank over the past seven years. The report highlights the lack of transparency and accountability in the Bank's climate finance reporting, making it impossible to determine whether the funds were actually used for their intended purpose of supporting climate action in low- and middle-income countries.

Opaque Reporting: A Fundamental Breach of Trust

The World Bank's published climate finance data includes only ex ante figures, which are the amounts of climate finance a project is determined to include based on an assessment before it is approved. The Bank does not conduct ex post analyses of projects to report on the actual amount of climate finance delivered. This lack of transparency and accountability has been described as a "fundamental breach of trust" by Oxfam, as it makes it impossible to evaluate the real-world impact of the Bank's climate finance investments.

Navigating the Labyrinth: The Challenges of Accessing Information

The Oxfam report also highlighted the difficulty and time-consuming nature of finding even the most basic facts about the World Bank's use of climate finance. Researchers had to sort through several levels of complex and incomplete reports, and there were still several gaps and anomalies in the data. This lack of accessibility and transparency is alarming, as it should not take a team of professional researchers to understand how billions of dollars meant for climate action are being spent.

Undermining Trust: The Implications for Global Climate Finance

The report warned that the lack of traceable spending could undermine trust in global climate finance efforts at a critical juncture, as countries prepare to negotiate a new global climate finance goal at COP29. Climate activists are demanding that the Global North provide at least $5 trillion a year in public finance to the Global South as a "down payment towards their climate debt," and the World Bank's opaque reporting could undermine these efforts.

Recommendations: Towards Transparency and Accountability

The Oxfam report has made several recommendations to address the World Bank's climate finance accountability crisis. These include the creation of a public climate finance database that includes sufficient metadata, is searchable, downloadable, and machine-readable, and discloses actual climate finance expenditures compared with planned expenditures. The report also calls for the Bank to conduct ex post analyses of projects to report on the actual amount of climate finance delivered.