Letter to Green Climate Fund Board: Improve Decision Making

Letter signed by 70 international civil society organizations: 

As members of civil society following the Green Climate Fund (GCF), we are writing to express our concern about the way the Board reached some of its most important decisions during the 14th Board Meeting (B.14). We would also like to share some thoughts on how to improve upon this process in the future. We are especially referring to the practice of “package approval” that was used to approve funding proposals and new accredited entities.

Weak process. The Board approved 10 proposals worth $745 million without discussing each one separately. The Board’s assessment of each of the funding proposals should be made individually and with the utmost care, to ensure that the objectives, principles, policies, and operational modalities of the Fund are respected and complied with. Furthermore, there was no opportunity for active observers to highlight individual comments for each of the funding proposals (they could merely air some concerns during the overarching discussion of all funding proposals). The same can be said with regard to the package approval of eight accredited entities. There was no public discussion of the merits and/or shortcomings of each approved applicant entity and no possibility of civil society input.

Civil society has vital contributions to make, and for our engagement to be meaningful, active observers must be given the opportunity to share important points regarding each proposal and accreditation application during Board meetings. Indeed, the Board’s way of working has actually been in conflict with the GCF’s own Governing Instrument, which states that “the Fund will operate in a transparent and accountable manner”.

Approval despite clear failures of GCF policy compliance. The Board repeatedly overlooked the failure of a number of proposals to comply with GCF policies and procedures. For example, public notification for a number of projects was out of compliance with the Fund’s information disclosure policy, which requires a 120-day notification period for proposals with high social and environmental risk. Mandatory gender action plans were missing from several projects, and stakeholder consultations in some cases were highly inadequate. Yet the Board approved all of the projects with one package decision.

The Board even pushed through proposals without the requisite guiding policy in place. For example, programs to be implemented via sub-projects were approved, yet the GCF does not have a policy regarding whether or not high risk sub-projects must come back to the Board for approval. We believe they should, to ensure the GCF’s accountability, and to preempt some of the serious environmental, development, and social shortcomings widely seen at other multilateral institutions that finance sub-projects via financial intermediaries.

Precedent-setting. While the Board stated that “the approach taken to approving funding proposals at B.14 does not constitute a precedent,” we are concerned that, at this point, the Board has taken such an approach multiple times. Steps to put a stop to these modalities becoming the de facto modus operandi must be taken in the lead up to B.15, including:

• Timely public disclosure on the GCF’s own website that, at minimum, follows GCF rules (i.e. 120 days for ESIAs for high risk funding proposals, 30 days for medium risk, and three weeks prior to board meetings for all other materials). All annexes and the Secretariat’s due diligence should also be disclosed for funding proposals;
• Publication of applications for accreditation as soon as they are filed, as well as operationalization of formal mechanisms for third party input (from affected communities, indigenous peoples, civil society, etc.);
• Individual consideration of each funding proposal and each applicant for accreditation during public sessions of the Board;
• Opportunities to consider civil society interventions during the debate on each individual proposal, rather than at the end of agenda items;
• Where formal (or informal) working groups are established to consider conditions to be placed on proposals, there should be a clear process to allow the consideration of civil society feedback, at a minimum in writing, but preferably through the direct participation of the CSO active observers or their alternates;
• Discussions on more complex and/or controversial proposals require several rounds of debate. In these cases, civil society observers should be given the opportunity to make further interventions responding to new proposals, conditions and amendments.

Civil society observers are committed to working with the Board to improve the accountability and transparency of Board decisions, in particular on funding and accreditation approvals. As a learning institution, the GCF needs to take the time to look at the merits of individual proposals and applicants in order to clearly elaborate how they can support the paradigm shift in recipient countries. We therefore urge the Board to better prioritize valuable time during the upcoming Board meetings to allow for meaningful discussions.