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World Bank takes up sustainability agenda

March 2005

The World Bank has made an important advance in the evaluation of its operations and lending.

In response to pressure from stakeholders, it has become the first multilateral development bank to publish a sustainability review. The 110-page web report looks at the social and environmental impacts of the bank’s huge lending programme, and also at its back office operations, which employ 8800 staff in more than 100 countries.

Large sections of the report are devoted to countering the perception that the bank does not listen to its stakeholders and spends much of its resources supporting environmentally and socially damaging projects.

Civil society groups are now involved in 72 per cent of bank projects and it is now engaged in at least 230 regional and global partnerships, according to the report. By the end of June 2004, bank schemes with positive environmental objectives or components accounted for about $11.3billion (£6bn), or 12 per cent of its active portfolio.

Internally, the report commits the bank to increase its socially responsible procurement, beginning with an assessment this year of how this can be applied to the goods and services it buys. It will pilot schemes in several countries, write best-practice procurement guides and train staff in this area.

The bank’s next review will begin to measure the impact of its lending operations and analytical and advisory work. There will also be more data on socially responsible procurement in investment operations, and information on how it is helping to mitigate climate change.

The report resembles similar documents from private sector companies, but the bank stresses it is an international organization whose members and owners are sovereign countries. This means that success, particularly in poverty reduction, its central purpose, ‘depends more on what countries do than on what we do’. Its ability to control impacts is therefore limited.
However, the institution says that it influences business behaviour through its CSR Practice, which advises developing-country governments on how to encourage socially responsible business.

The bank has now barred more than 200 companies found to have engaged in corrupt practices from involvement in its projects.

In 2004, two-thirds of its projects, or 72 per cent of lending, had potentially adverse environmental and social impacts, although the bank claims many of these were reduced or eliminated following impact assessments. The World Bank made lending commitments of $20.1bn in that financial year.

see editorial, page 12



Further Information
http://www.worldbank.org/ess
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