Approaching climate adjusted environmental due diligence for multilateral financial institutions

Abstract

Purpose

This paper seeks to review literature on environmental safeguards for five selected multilateral financial institutions (MFIs) with the objective of verifying whether their environmental safeguards have been updated with climate change elements, and whether they have adopted specific climate change strategies for their investment portfolios.

Design/methodology/approach

The methodology set for this review was based on a set of descriptive criteria. These included content reviews on MFIs existing safeguards or formal environmental guidelines, the extent of incorporation of climate change to guidelines text, and overarching strategies adopted to address climate change.

Findings

Generally, the environmental safeguards reviewed have minimally discussed formal considerations of climate change issues. Although environmental safeguards continue to play vital roles in bank operations, it generally remains traditional with minimal adjustments to formally include climate change. Nevertheless, all the banks have developed overarching climate change strategies at the strategic level.

Research limitations/implications

The information presented herein is compiled from articles, reports, papers and books identified from computer‐based searches. The research is limited to information available on the internet, books and papers. It is therefore possible that MFIs are involved in some climate change activities not yet in the public domain, and as such are not covered by this paper.

Practical implications

Quite clearly, the adjustment of environmental assessments such as environmental impacts assessment/strategic environmental assessment to include climate change is in the offing. This means that practitioners may need to considerably understand the character of climate change and thereby construct concrete approaches to tackle both ideological and methodological gaps.

Originality/value

This paper fulfils an identified need in the climate change discourse, bringing forward climate change as an issue deserving more legal, formal and obligatory attention.

Citation

Boakye‐Agyei, K. (2011), "Approaching climate adjusted environmental due diligence for multilateral financial institutions", International Journal of Climate Change Strategies and Management, Vol. 3 No. 3, pp. 264-274. https://doi.org/10.1108/17568691111153410