Green Climate Fund disappoints by accrediting unfit entities
During its 10th session, in a process characterized by little transparency, the Board of the Green Climate Fund accredited 13 entities to manage financing that the Fund authorizes for climate change adaptation and mitigation projects.
The Board accredited the entities as a group, without carefully analyzing them one by one. They did not consider that some have been penalized for financing terrorism and laundering money, or that their primary lending portfolios support fossil fuels. Nor did they consider that some haven’t shown sufficient capacity to manage high-risk climate change projects that could cause irreparable environmental and social impacts. Some do not comply with international fiduciary standards to handle such activities.
“We’re disappointed to see that the Green Climate Fund has demonstrated business-orientated behavior, no different from other financial institutions. This doesn’t help the Fund contribute to a paradigm shift and offer better access to resources for local actors,” said Andrea Rodríguez, a senior AIDA lawyer and civil society observer at the Board meetings.
The decision-making process for the accreditation of the 13 entities lacked transparency, as no names of the candidates were known until the decision was made. Nevertheless, civil society organizations were able to obtain information to identify inappropriate backgrounds of some of the entities seeking accreditation, and asked the Board to decide on a case-by-case basis. They also requested that the Board assess evidence questioning the ability of these institutions to manage high-risk projects, and to ensure that only the best entities are accredited.
The Board, however, opted to make a hasty decision. It reviewed the proposals in a closed Executive Session, and accredited all 13 entities together without considering their problematic histories. “By acting this way, the Board risks the reputation, credibility and legitimacy of the Green Climate Fund,” Rodríguez added.
The Board should ensure that all entities seeking accreditation meet the same standards required for access to Fund resources. Developing countries depend on the integrity of accredited entities to ensure access to the financing they need to confront the increasingly severe effects of climate change. It remains vital that the Board guarantees transparency in its decision-making processes.