Leading development and environment NGOs, including Christian Aid and Friends of the Earth, have today welcomed the commitment by The Co-operative Bank to hold no investments in the World Bank’s private sector arm, the International Finance Corporation (IFC).
It is understood that the Co-operative Bank had become increasingly concerned about the IFC’s commitment to fossil fuel extraction and its failure to provide meaningful investment for renewable energy projects. Industry monitors estimate that in 2005 IFC was the world’s largest multilateral financier of fossil fuel extraction. Meanwhile, the agency devoted a mere 4 per cent of its total energy lending to renewables in the past year, and has set no concrete goals for increasing such financing. “We are very pleased at The Co-operative Bank’s action. Climate change is the single greatest threat facing the planet. Yet the IFC uses public funds to subsidise rich oil giants who exploit fossil fuel resources in developing countries,” said Tony Juniper, Executive Director of Friends of the Earth, England, Wales and Northern Ireland.
“We’ve looked at the recent investments of the World Bank’s IFC and concluded that there is an unhealthy focus on fossil fuel technologies. Henceforth, we will withhold investments until such time as renewable technologies are much better supported”, said Paul Monaghan, Head of Sustainable Development, at The Co-operative Bank.
the Co-operative Bank had become increasingly concerned about the IFC's commitment to fossil fuel extraction
The IFC – a publicly-backed development institution – is consistently unable to show evidence that its investments in oil, gas and mining have positive impacts on poverty alleviation. “Poor people are on the frontline of climate change and yet the IFC continues to pump public money into fossil fuel projects on their doorstep. Not only is this immensely ironic but these projects themselves are so often also a source of misery to the poor communities living around them,” added Andrew Pendleton of Christian Aid (2).
The Bretton Woods Project (3), a watchdog of the World Bank and IMF, believes the timing of the announcement is significant. “The IFC has just finished systematically weakening the environmental and social safeguards which act as standards for private finance (4). It has abandoned any pretension to a leadership role in the debate over the role of private finance in development,” said Project Coordinator Jeff Powell. “We hope this decision by The Co-op will lead other banks to look again at their holdings. This is what it will take to force the IFC into a fundamental re-think of their failed development model.”
Notes to editors:
- (1) http://www.foe.org.uk/campaigns/climate/
- (2) http://www.christian-aid.org.uk
- (3) http://brettonwoodsproject.org
- (4) See the joint NGO press release on the IFC safeguard policy review at http://brettonwoodsproject.org/article.shtml?cmd=x-126-528662