Environmental Sustainability: An Evaluation of World Bank Group Support

July 2008

Environment matters for development

Environmental problems are enormous and increasing
Climate change Air and water pollution Soil erosion and desertification Water scarcity Loss of biodiversity

Developing countries are severely affected:

Growth Poverty

Both public and private action are needed

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WBG timeline: Increased attention since 1990

1970 WB project focus: "do no harm"

1980

1990

2000

IFC: Deepening attention to projectlevel impacts from 1991 World Development Report (for Rio summit) (1992) WB: Increasingly proactive role from 1992 * 4-fold agenda: Safeguards, Stewardship, Mainstreaming, Global sustainability

IFC: Equator Principles WB: 2003 World Development Report WBG: 2001 Environmental Strategy

MIGA: Enhanced projectlevel focus from 1998

Key messages
The World Bank Group has made progress since 1990 as an advocate for the environment But treatment of environmental issues in many WBG country programs remains weak due to major external and internal constraints The WBG needs to increase its engagement and effectiveness in environmental issues through

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Greater attention in Bank Group and country strategies More effective cross-sectoral approaches Better measurement of activities and results Closer collaboration within the WBG and with partners

This evaluation looks broadly at WBG engagement FY90-07

Broad coverage: World Bank, IFC, and MIGA Evaluation Objectives
Assessing WBG effectiveness Identifying principal external and internal constraints Suggesting improvements going forward

Perspectives: Do no harm and Do good Methodology

Literature review Portfolio review (variation across WBG due to data availability) 9 country case studies

The 9 case study countries come from all regions and a mix of MICs and LICs
Together these countries account for 56% of population, 46% of GDP, and over 40% of Bank environmental lending in developing and transition countries. East Asia Latin America Middle East/N. Afr

China Brazil Egypt

Ghana, Madagascar, Senegal, Uganda South Asia India Europe/Central Asia Russia
Sub-Saharan Africa
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Findings

World Bank
1. Strategies
2001 WBG Strategy growing but still inadequate attention in country strategies even less in country-led PRSPs exact amount unknown at most 5-10% Bank total project performance better over time, but M&E still weak weaker performance in Africa as important as lending country environmental assessments: helpful where undertaken research influential: WDRs 92, 03; Greening Industry

2.

Lending and grants

3.

Nonlending

World Bank (cont)

4. 5. 6. Mainstreaming
some improvement but still far to go (poverty, health-environment links, vulnerability) needs strengthening within WBG and externally some good examples (GEF, Pov-Env. Ptnp. ) less emphasis during evaluation period, though now growing some good examples (Montreal protocol, carbon finance)

Partnerships

Global public goods

IFC
Sustainability in IFC corporate strategies since 2001. Until recently focus has been on do no harm. Move to more do good. 1. Environmental and social effects of investment projects
67% success rate in meeting IFC requirements and performance standards weak performance in Africa and in certain sectors limited attention to broader context

2. Environmental work quality

appraisal generally good, supervision of financial intermediaries weak

3. Doing good initiatives

M&E system generated insufficient data or still too early to assess - Environment & Social Sustainability advisory services - Equator Principles

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MIGA
MIGAs focus has been primarily on do no harm Sustainability concept just incorporated in core business 1. Environmental and social effects Category A projects: better performance and increased attention to social issues Category B projects: less attention, worse performance Environmental work quality Strengthened environmental and social issues in underwriting

2.

New policy and performance standards (2007): Go beyond safeguards to promote sustainability in guaranteed projects
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Looking ahead

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Many constraints need to be confronted

Clients (public and private)
Competing demands (e.g. growth, energy needs, governance, conflict) Insufficient client commitment Inadequate institutional capacity and resources

World Bank Group

Competing priorities Inadequate staff skills and knowledge networks Difficulties of coordination across sectors, across WBG, and externally Difficulties of taking long-term view and of assessing country-level impacts beyond individual projects

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The evaluation has four broad recommendations

1. Elevate environmental sustainability as WBG priority -- not just more of the same, but a transformational change 2. Move to more integrated, cross-sectoral and areabased approaches and strengthen staffing 3. Greatly improve ability to measure, monitor, and evaluate activities and their results 4. Continue to strengthen partnerships

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What would success look like?

A widely-shared understanding of the critical role of environmental sustainability to development
Clear alignment behind key strategic objectives Strong and effective WBG capacity Effective internal and external collaboration An emphasis on continual learning (from both success and failure)

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and a more sustainable world for all

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Thank you
Evaluation available at:
www.worldbank.org/ieg/environmentalsustainability
Evaluation authors: John Redwood (IEG-WB) Jouni Eerikainen (IEG-IFC) Ethel Tarazona (IEG-MIGA)