EIB policy: Neglecting environmental and social standards
The EIB does not commit itself to a binding set of operational environmental and social policies. Time and again the EIB's billions have thus contributed to damaging impacts on people and their environment.
Environmental and social standards help to ensure that investments do not harm the environment or local communities. In this regard, the EIB is guided by its Statement of Environmental and Social Principles and Standards (2009), which
- prioritises considerations of environmental sustainability and social well being in its lending practices, in particular pertaining to climate change, biodiversity and ecosystems;
- refers to a number of labour, human rights and other social standards
Good intentions however are not enough.
Notably, the EIB commits itself to abstract standards, but not to binding procedures – an exceedingly exceptional practice compared to other major public international financial institutions (IFIs).
The EIB expects its clients to follow these standards, but limits its own responsibility to ticking off formal procedures. Particularly outside the EU, the EIB does not properly verify clients' claims, but assesses projects based on information from them (who have a vested interest in projects being evaluated positively).
Finally, regular monitoring of environmental and social standards throughout project implementation is impossible with the EIB's small staff (of around 1500) and projects being evaluated almost entirely by economists and engineers.
As the projects monitored by us illustrate, it is affected communities and the environment who have to bear the negative consequences of these insufficient practices.
The only way to make sure the EIB's fulfils its mission to ensure its projects contribute to sustainable development is to take responsibility for all its investments' environmental and social impacts by:
- approving only projects that meet the EIB’s social and environmental standards;
- reviewing the quality of documents provided by the borrowers;
- making its environmental and social appraisal publicly available before approval of the project;
- not approving projects which were not subject to an environmental impact assessment;
- evaluating environmental, social and development impacts of each project after its completion.
Two European public banks are currently reviewing their energy lending policies. We call for an end to coal subsidies.