World Bank

Nature based solutions

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

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Paris alignmentReasoning
Some progressPromotion of nature based solutions and climate-smart agriculture, no commitment to net-zero deforestation.

Explanation

Nature based solutions

In April 2019 the World Bank published a report and booklet emphasising the benefits of nature based solutions for water resource management, disaster risk reduction and climate change adaptation.  Some efforts appear to have been made to mainstream nature based solutions within the World Bank Group. The World Bank is clearly aiming to use its role as a “knowledge bank” in this area. The Climate Investment Funds have also created a “Green Guarantee for Competitive Landscapes“, part of a wider initiative to mainstream sustainable landscapes in the World Bank Group. The Bank has conducted research and analysis around peatlands in Indonesia.

Biodiversity

Through its Environmental and Social Framework, the World Bank screens all its investment projects under the lens of the standard on “biodiversity conservation and sustainable management of living resources”. It works with countries to incorporate the economic value of natural capital into decision making, through the Global Program on Sustainability (formerly WAVES). 

In terms of the IFC, the IFC performance standards include some biodiversity safeguards, including the following aspects:

  •  Seek to minimise and avoid impacts on biodiversity and implement appropriate mitigation measures, and ensure no net loss in biodiversity in natural habitats where feasible.
  • Where possible, agribusiness and forestry projects will be located on unforested land or land already converted.
  • Client must not intentionally introduce invasive alien species.
  • Client should minimise and avoid impacts on ecosystem services.

However, it is notable that the wording in this standard includes the caveat that this will be done ‘where feasible’.

The World Bank’s “PRO-BLUE” trust fund financed by Canada, Denmark the EU and others aims to support the sustainable development of marine and coastal resources in healthy oceans. It covers fisheries and aquaculture, marine pollution, oceanic sectors and seascape management. The World Bank provides support to the Convention on Biological Diversity in the development of a post-2020 Global Biodiversity Framework which is set to be adopted at fiftheenth conference of the parties to the Convention on Biological Diversity (COP15) in June 2021.

Agriculture

The World Bank is a leading financier of agriculture, with $6.8bn in new IBRD/IDA commitments in fiscal year 2018. 

It has since 2015 placed an emphasis on ‘climate-smart agriculture’ , an approach that aims to lead to improved productivity, resilience and lower emissions (although this approach has also received some criticism from civil society).

While the World Bank has focused its work on the supply end of the agricultural supply chains, there has been relatively less focus upon the drivers of deforestation such as demand for resource-intensive agricultural products. The World Banks Group’s work within the livestock sector in Vietnam, for example, has the objective of increasing the efficiency of livestock production but there have been concerns about this intensification project on the basis that it contributed to low animal welfare outcomes. The Bank’s work on forests include partnerships with the private sector including many major agricultural producers, which can lead to the promotion of large-scale agricultural practices. While increasing efficiency of livestock food chains may reduce emissions per unit of output, increasing efficiency of industrial agriculture may have the effect of reducing prices for certain types of resource-intensive products thus inadvertently leading to increased emissions. Further data on the greenhouse gas emissions associated with production changes resulting from MDB projects would be needed to explore this issue in more detail.

Forests

The World Bank is working to reduce deforestation under the New York Declaration and has acknowledged the need to address the drivers of deforestation. Its Forest Action Plan states that it introduced an exclusion of commercial logging in tropical forests in 1991. It is estimated the WBG invested an average of $465m per year in the forest sector between FY02 and FY15. Based on OECD statistics listed in its Forest Action Plan, the World Bank ranks first in the list of multilateral financiers of forest activities. The Bank claims to support growth patterns that significantly reduce deforestation and increase carbon sinks while addressing livelihoods for forest-dependent people. The World Bank has also stated that “the thoughtful management of the world’s remaining forests and trees is critical to achieving these goals”. The World Bank PROGREEN Platform is aimed at strengthening forest management, reducing deforestation, sustainable agriculture, and is financed by the German government. However, the World Bank has not made a commitment to net or zero deforestation within its own portfolio. Recent analysis has found that World Bank documents are more likely to mention forest impacts than trigger improved forest policies, and that the triggering of the forest policy was also highly inconsistent across regions and sectors. Furthermore, IFC displayed a lack of transparency in its publication of key documents such as impact assessments.

In addition to repurposing traditional instruments, the Bank’s Climate Change Management Fund Unit independently houses several initiatives including: the Forest Carbon Partnership Facility and the  BioCarbon Fund Initiative for Sustainable Forest Landscapes

It should be noted that there appears to be no publicly available bank-wide portfolio level information on the total forest impacts of the World Bank’s operations.

Landscape management is part of the sectoral five-year targets for 2025:

– Integrated landscape management in up to 50 countries, covering up to 120 million hectares of forests.

Last Update: November 2020

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