Social Risks of MDB-backed Projects Going Unnoticed

Lack of community consultation and accountability frameworks undermining efforts to fund a just transition, campaigners argue.

Multilateral development banks (MDBs) need to do more to identify and mitigate potential societal harms when financing companies and projects contributing to the net zero transition, according to the NGO Accountability Counsel.

“When considering how to achieve a just transition, the main thing missing is ensuring efforts are more community-centred to achieve the best impacts on the ground,” Caitlin Daniel, Communities Co-director at the Accountability Counsel, told ESG Investor.

“The way MDBs are thinking about impact has been oversimplified to [focus on] getting money out the door to big businesses and financial institutions – assuming that the positive impacts they are supposed to be ensuring are going to flow from that,” she said. “What we’re seeing in practice is that societal impacts are not being tracked, and there isn’t enough transparency or accountability in the incentive structures and systems of these MDBs to ensure that benefits are being delivered.”

Read the full article on ESG Investor here.