Africa's Public Finance Institutions Falling Short on Climate Finance Accountability

 As climate finance is plagued, it is important that climate spending is measured robustly and accurately. Amy Gilliam Thorpe, the African Climate Reality Project, branch manager, joins us on holding countries accountable really. Thank you so much, Amy, for creating time to speak to us. Just looking at the public finance institutions, they are really critical when we look at their role in a global economy. So when we gauge that and seeing the extent in which financing for climate is being integrated into the national agenda, how are we seeing it, especially here within the continent? Can you repeat the question I missed the last part, Fiona. Thank you so much for having me. Yes, and now we're just looking towards the extent are we seeing a financing climate change being integrated into the mandates of the different public finance institutions within the continent? Right, thank you so much for that question. I think it's important first to just establish what do we mean by public finance institutions in the first place. And so there we are referring to development banks, trust companies, insurance companies, and asset managers that are owned and controlled by the state or government. And they do provide major capital for infrastructure and development projects. And they also have specific developments on mandates in the countries in which their operates and the regions that they operate in, which means that they do have an important role in obligation to finance a just and equitable society. From what we're seeing, you know, that many of the public finance institutions, particularly the ones that we assessed in the report that we're launching today, are still using public funds to invest in fossil fuels. You know, even one of the public finance institutions that we assessed, the public investment corporation, the money that it receives from one of the biggest clients that it has, which is the South African government's employees, pension funds, is actually being used to invest in fossil fuels. Yeah, I mean, just looking at the key findings from the report that you're saying will be launched later on today, how do we rate what you're looking at the private finance institutions? How do they perform in regards to climate change, accountability, and also just when we're looking at also transparency, whether it's channeling funds within the climate space? Right. Yeah, so we specifically focused on public finance institutions, and I think what we found from the six public finance institutions that we assessed, particularly in relation to climate change power generation and transparency and accountability, that they perform very poorly in terms of aligning with international standards and based practices. So for just one example, none of the six public finance institutions that we assessed have publicly available concrete policies or plans that really detail how and when they are going to phase out fossil fuels in their financing or investment portfolios or even align with the Paris agreement. You know, that's really concerning given that the climate crisis is already here, and the African continent, particularly southern Africa, is disproportionately affected by climate impacts. And so, you know, we really have to drastically reduce our emissions by 2030. And then a second key finding that we found is that public finance institutions do not say any limits or even conditions on the financing of an investment in fossil-fired power generation. So there's a really key findings that we are taking from the reports and really inform the recommendations from the reports as well. And just focusing on RFIs here on the continent. When you're looking at reporting, when you're also looking at tracking, especially climate finance, the data also plays a critical role for you to be able to get the right information and they draw the rights, a picture and conclusion. So, to what extent are we seeing the limited data we have here on the African continent being a limiting factor? And does that impact accountability? It's definitely a factor. I think the transparency and accountability is a concern that we've definitely noted and picked up to our engagement with public finance institutions and multilateral development banks more broadly beyond the policy assessment itself. We've noticed a lack of transparency and accountability or really what we mean by that is sharing of public information, sharing the information publicly, ensuring that people have the right to all the relevant information when it comes to project pipelines, approvals and more specifically engagement with civil society, ensuring that they are following free, prior and informed consent processes, particularly with affected communities. And often in those cases or those instances, communities are saying no, not on our soil, we don't want these developments. And so, it's problematic that those policies are not being integrated to ensure that transparency and accountability and ongoing due diligence processes are being followed. So, what are the recommendations and how do we engage these institutions even after COP27? Sure. So, the first really essential recommendation from our end is that these institutions need to establish and commit to a fossil fuel finance exclusion policy or plan with very clear timelines and targets for an equitable phasing out of financing and basements in fossil fuels, but also importantly, they need to immediately prevent any further financing of fossil fuels. And then the second recommendation from our side is for these institutions to align their policies with the one and a half degree Paris Agreement targets by establishing and disclosing really measurable targets to reduce greenhouse gas emissions. So, at COP27, our plans as the Fair Finance Coalition Southern Africa is to use this policy assessment, effect based assessment, to open up engagement and dialogue between civil society, community-based organisations and public finance institutions so they can better understand the expectations of civil society and communities, but equally also so that they can perform better in terms of their policies and align with international standards and based practices. Now, I'll get back.

As climate finance is pledged, it is important that climate spending is measured robustly and accurately. Amy Giliam Thorp, African Climate Reality Project, Branch Manager joins CNBC Africa  on holding countries accountable. 

Africa: Ensuring transparency & accountability in climate finance

As climate finance is pledged, it is important that climate spending is measured robustly and accurately.

Africa: Ensuring transparency & accountability in climate finance

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Africa: Ensuring transparency & accountability in climate finance

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