Oxfam report reveals billions in unaccounted World Bank climate finance, urges urgent transparency reforms : Valley Vision

A new Oxfam report highlights that between $24 billion and $41 billion in climate finance disbursed by the World Bank over the past seven years remains unaccounted for, largely due to inadequate record-keeping and limited transparency practices.

This staggering amount constitutes almost 40% of the Bank’s climate finance, raising serious concerns over accountability and impact as global leaders prepare for crucial climate discussions at COP29 in Azerbaijan.

The investigation reveals significant discrepancies between the climate finance the World Bank initially budgeted for and the amount actually spent on mitigation and adaptation initiatives across low- and middle-income countries from 2017 to 2023. 

The Bank’s average deviation from its initial budget ranged between 26% and 43%, highlighting substantial gaps in tracking and verifying whether the funds allocated to climate projects were spent as planned.

“This isn’t just a question of bureaucratic oversight but a fundamental breach of trust,” said Kate Donald, Head of Oxfam International’s Washington, D.C., Office.

The report points out that the World Bank, the largest multilateral provider of climate finance—accounting for 52% of climate finance from all multilateral development banks (MDBs) in 2022—relies on “ex ante” projections. These projections estimate climate finance commitments before projects commence, without any follow-up to confirm whether the funds were allocated or spent on climate-related initiatives. Oxfam’s findings indicate that this practice leaves substantial sums untraceable, severely hampering assessments of climate finance impact in vulnerable regions.

Oxfam labels this reliance on ex ante figures “Unaccountable Accounting,” noting that it fails to provide accurate data on the extent and efficacy of climate investments. For example, a 2022 Oxfam report found that 40% of what the Bank classified as climate finance in FY2020, roughly $7 billion, could not be confirmed based on publicly disclosed information. This lack of clarity risks undermining global climate finance efforts, especially as developing countries call for substantial increases to meet the $5 trillion annual climate finance needs forecasted by the United Nations by 2030.

Ahead of COP29, where nations are expected to finalise a New Collective Quantified Goal (NCQG) for climate finance, Oxfam’s report serves as a call for stricter accountability measures. With climate activists advocating for a $5 trillion annual commitment from developed countries to the Global South, Oxfam asserts that the World Bank’s role in climate finance must become more transparent to ensure funds reach the communities most affected by climate change.

“Oxfam urges the Bank to adopt more transparent reporting practices, including publishing a comprehensive public climate finance database,” Donald added. “Communities impacted by climate change should be able to see how these funds are spent—if indeed they are.”

The report outlines several critical steps for reform: Oxfam recommends that the Bank publish more granular project data at the component and activity levels to allow independent verification of climate finance claims. It calls on the Bank to track and publish “ex post” climate finance expenditures—actual amounts spent—through Implementation Completion and Results Reports (ICRs). Additionally, the Bank should distinguish between ex ante and ex post climate finance in its reports and specify sources of financing, including co-financing, to enhance accountability.

As COP29 approaches, Oxfam emphasises that achieving meaningful climate action at scale requires not only ambitious funding commitments but also a systematic approach to transparency and accountability. By aligning its operations with these principles, the World Bank could better fulfill its mission to end poverty and promote sustainable development in a way that truly addresses the climate crisis.