Report finds World Bank’s coal divestment pledge not stringent enough

(Eco Business, 25 Apr 2019) The International Finance Corporation’s Green Equity Strategy is seen as a good start toward ending the lender’s coal exposure, but a new study finds what it says are loopholes that could render the strategy ineffective.

Indonesia provides a litmus test for the World Bank’s commitment to divest from coal, with a recent report revealing its continued indirect financing of some of Indonesia’s most destructive coal-mining companies.

The report by Inclusive Development International, Bank Information Center Europe and Jakarta-based coal watchdog JATAM, shows that the World Bank’s private-sector arm, the International Finance Corporation (IFC), financed commercial banks and private equity funds that then invested in six coal companies in Indonesia.

Collectively, these companies dug up 227 million tons of coal in 2017; if all of it were fed into power plants, it would generate 458 million tons of carbon dioxide emissions — higher than Brazil’s emissions, and equivalent to 12th place on the list of top emitting countries.

The report was released during a policy forum in advance of the World Bank’s 2019 Spring Meetings in Washington, D.C. The multilateral lender pledged in 2013 to end direct financing for coal.

Green equity strategy

“The IFC is taking welcome steps to address the harms in its financial-sector portfolio, including pledging to reduce coal exposure to zero and help its clients step away from coal,” said Kate Geary, co-director of Bank Information Center Europe. “But the devil is in the details, and we will be watching closely for any loopholes which allow this dirty financing to continue.”

External link

Eco Business, 25 Apr 2019: Report finds World Bank’s coal divestment pledge not stringent enough