Evolving World Bank mission & practice to support climate-safe integral human development

Briefing note representing stakeholders’ views and concerns for ongoing reform of multilateral development finance

SUBMITTED TO THE WORLD BANK ON JULY 25, 2023

Citizens’ Climate International works to support citizen stakeholders in their efforts to engage decision-makers to support transformational climate policy. We manage engagement between our network and intergovernmental policy processes. Our Resilience Intelligence and Civic Diplomacy programs include a focus on just, climate-related reform of international financial institutions and arrangements.

With The Fletcher School of Law and Diplomacy at Tufts University, we co-convene the Earth Diplomacy Leadership Initiative, which provides training to participants and observers in the UNFCCC process and related areas of decision-making and diplomacy. At the COP27 in Sharm el-Sheikh and at the forthcoming COP28 in Dubai, we will support allies working to launch a global co-investment platform for food systems transformation.

The Evolution Roadmap aims to update the mission, practice, and financial capacity of the World Bank Group, to respond to an atmosphere of cascading and compounding global crises, recognizing:

The devastating impacts of climate change, fragility, debt, pandemics, and other threats to our natural world require a significant shift in the global response. The World Bank Group is central to these efforts, and our shareholders, clients, and partners, want the Bank to be able to do more for global public goods.

We submit this briefing note on behalf of stakeholders from 76 countries.

Summary of Asks

Below we detail principles and strategies for effective, inclusive, just, and resilience-building reform of the World Bank Group and of international financial institutions more broadly. Among the recommended principles and strategies, you will find examples of leadership and suggested areas of emerging multilateral innovation in policy, finance, information sharing, and accountability.

For ease of use, we summarize our overall list of asks here:

Invest to support the health of all human beings and all of nature.
Recognize human rights, and don’t punish the vulnerable.
Support multilateral cooperative arrangements to accelerate integral human development.
Include stakeholders in design, delivery, and tracking of development finance.

Reinventing Prosperity

From the early days of the COVID-19 pandemic, we hosted weekly check-ins with interested members of our network. All were facing complicated disruptions of everyday life; experiences were diverse, with some facing far more immediate physical threats than others. What we found everyone had in common was the sense that “essential workers” provided high-value services that were greatly undervalued, and sudden-onset crisis made it more difficult to meet everyday needs. We needed to find ways to build resilience and set a course for inclusive prosperity.

Those discussions led to the Principles for Reinventing Prosperity:

We are all future-builders – Everyone’s empowerment and agency have real value for everyone else.
Health is a fabric of wellbeing and value – Human health, economic health, and planetary health are inextricably connected to justice and prosperity, and their benefits enhance and reinforce each other.
Resilience is a baseline imperative – To recover from and transcend our current multi-faceted crisis, we must rebuild for a better future.
Leave no one behind – Include everyone in the building of a better future, by ensuring everyone’s health, agency, and cooperative capabilities can go to work.
Design to transcend crisis – Adaptive, inclusive, resilient prosperity is within reach, if we work to eliminate critical system failures.
Maximize integrative value creation – Value (wellbeing) emerges from complex interactions; assessing value must include assessment of health and resilience as a product of these interactions.

We offered a selection of policies and solutions that could put these principles into practice, and we committed to report on progress, year to year. All 18 of those areas of work remain relevant to the challenge of transforming finance to build macrocritical resilience and secure a livable future.

Capital to Communities

Our 2022 Reinventing Prosperity Report centered on a participatory ‘Capital to Communities’ approach to designing, delivering, and tracking climate-related solutions and investments.

The report examines the Sustainable Development Goals as an integrated and holistic strategy for achieving economic freedom for people and communities, and for whole countries.
It also emphasizes the value of decentralizing value creation through active and ongoing engagement of communities and stakeholders.
And, it calls for a shift toward an integral and holistic planetary health standard for resilience-building investment, citing examples of leadership on adaptation, bioregions, food finance, and multidimensional metrics.

The report also recognizes the vital role of human rights in setting the standard for high-ambition policy, investment, practice, and outcomes. This includes:

the right to a livable climate future;
the right to engage in participatory planning and decision-making processes;
the right to know—to access, share, and act on climate-related information and innovations.

We also outlined two core climate rights related to focused investment in reducing vulnerability:

the right to restoration, or funding to overcome loss and damage (FOLD);
the right to resilience, or finance for adaptation and resilience measures (FARM).

Strong models already exist for FOLD (restoration) and FARM (resilience), as separate and distinct categories of locally led development, disaster response, insurance, and infrastructure investment. These mechanisms work best when local communities hold capacity to assess and deliver impact, and when some of the critical services involved are everyday activities of effective community organizations, transparent public agencies, or local businesses.

Citizen participation in decision-making is a crucial enhancement of climate-related policy-making and financial decision-making.

Optimization of development finance flows must mean building operational connections between communities (marginal, front-line, unbanked, and underserved), and the wider system of financial and commercial exchange.
Stakeholders, especially the vulnerable and at-risk, have a governing interest in the ambition, design, delivery, and performance of development finance.
To uplift people and communities, and to deliver not just national development assistance but a measurable and reliable increase in human dignity, safety, and wellbeing, communities should take on a key role in decision-making processes.

Our experience is that inclusion enhances ambition, accelerates and improves implementation, while making high standards more actionable, enforceable, transparent, and achievable.

World Bank Reform

Throughout 2023, CCI has supported citizen stakeholders wishing to engage with leadership at the World Bank around the ongoing process of institutional evolution. In April, stakeholders from 31 countries sent letters to the World Bank Executive Directors representing their country or region. The letters focused on four core asks:

Support the Bridgetown Initiative of the Prime Minister of Barbados Mia Mottley. It is gaining support and beginning to work.
Ground all reforms in human rights and gender equality.
Welcome meaningful, ongoing citizen input into the reforms and future operations. This must go beyond the World Bank Civil Society meetings.
Investigate direct delivery of money to households in need, and develop an implementation plan to do so.

In July, we are supporting a second round of outreach, focusing on four additional asks that came back from our network in response to news about emerging climate-related financial and policy innovation:

World Bank financing must address the longer term needs of building climate-resilient infrastructure. Infrastructure projects generally take about 30 years; restoring nature to meet the goals in mitigation, biodiversity and adaptation plans could take generations. Financing must reflect the reality of the need for long-term sustained investment and action.
Recognizing the sovereignty and rights of Indigenous peoples is essential for sustainable conservation efforts. The free, prior, and informed consent standard should be recognized in regular practice, and preservation of nature on Indigenous lands should be additional to the ‘30-by-30’ benchmark set by the United Nations Global Biodiversity Framework, not a primary way of meeting it.
We must not only protect countries from the climate impacts; stranded assets are also a concern. Guardrails for financing are needed to avoid greenwashing. The World Bank Group and the Private Partnerships must abide by the United Nations report ‘Integrity Matters’.
Hampering the capacity of the multilateral development banks to unwind global economies from fossil fuels is the lack of a global framework. The World Bank and IMF should join the European Union, Fiji, Austin (Texas), the World Health Organization and a plethora of organizations, governments and thought leaders in asking for the United Nations to develop a Fossil Fuel Non Proliferation Treaty.

The thread running through all of this is the recognition that value is created far beyond the transactional edge of specific financial arrangements. Failure to value that wider landscape has led to worsening vulnerability, climate disruption, nature loss, and preventable harm. We have a responsibility to invest in ways that honor and uplift that wider landscape of value creation. Leaving no one behind is not an act of charity; it is an operational imperative.

Non-market approaches

Article 6, paragraph 8 of the Paris Agreement (Article 6.8) provides guidance for non-market international cooperative approaches to accelerate climate action. Non-market approaches should become multifaceted multilateral cooperative agreements on food, energy, finance, and trade. Article 6.8 calls for such cooperative agreements to support poverty eradication—the core imperative of the World Bank’s mission.

Article 6.8(c) calls for “coordination across instruments and institutional arrangements”, which suggests in turn working across Conventions and across dimensions of performance evaluation. Integral human development in line with climate, nature, and sustainability goals, is a natural extension of this standard. It also calls for public and private collaboration, with all of the above clearly suggesting a role for multilateral institutions.

Our briefing note on non-market approaches for the SB58 round of UNFCCC negotiations outlines four areas of work each, under four overarching categories:

Policy, Pricing & Incentives
Prioritization & Performance
Operational Support
Vulnerability-Responsive Measures

We then highlight six examples of potentially transformational, high-value NMAs:

Hypothetical

A Climate Income Cooperative
A Green Nutrition Security Pact
A Climate Banking Partnership

Operating or in the works

Non-market approaches are a natural extension of relations between countries. That such arrangements are urgently needed, overtly called for in agreed international law, capable of supporting much-needed reform of international financial arrangements, and applicable to local, national, and international imperatives, means there are no excuses for not moving to reduce vulnerability and accelerate resilience-building investment.

Closing Comment

At this writing, we are seeing unprecedented disruptions in global climate patterns and major jet streams. Long-lingering heat domes, catastrophic droughts and floods, and wildfire storms of unprecedented scale, are putting infrastructure, human health, food supplies, and the stability of vulnerable nations at risk. June 2023 is estimated to be the hottest month in the history of our species, with four consecutive days in early July registering as the hottest day in the history of the human species.

It is not only scientists and advocates warning of the increasingly grave risk and cost of inaction. The U.S. Commodity Futures Trading Commission and Financial Stability Oversight Council have both found that unchecked climate disruption will collapse the financial system and undermine its ability to support the wider economy. Deloitte projects the world will spend or lose $178 trillion by 2070, if climate breakdown is not halted and reversed.

People, communities, countries, and the biosphere, all need reform of international financial institutions that steadily phases out global heating pollution, to prevent heating above 1.5ºC and support the progressive return to a stable and healthy climate. Shifting incentives, changing market signals, and getting much-needed funding support to those least visible to financial institutions is a structural imperative on which all other political and economic ambitions will turn.

It is in this context, and with this understanding of the immediate urgency facing communities and institutions, that we ask the World Bank Group to address asks from our network of stakeholders. For convenience, we reiterate the condensed overview of those asks:

Invest to support the health of all human beings and all of nature.
Recognize human rights, and don’t punish the vulnerable.
Support multilateral cooperative arrangements to accelerate integral human development.
Include stakeholders in design, delivery, and tracking of development finance.