As work gets underway to analyse the transparency of development finance institutions (DFIs) using our DFI Transparency Tool, our team have produced a series of blogs exploring the key components of the tool, why they are important and the issues they raise. This month we’ve looked at impact management, and environmental, social and governance (ESG) and accountability to communities.

The illusory promise (and real potential) of new DFI impact management tools

In this blog, Paul James argues that the “development scores” produced by new DFI impact management systems are of limited value. DFIs should instead focus on disclosing the granular impact data that informs these scores.

If DFIs are truly committed to openness and accountability they should publish all environmental and social documentation

In this blog, Ryan Anderton examines the importance of ESG and accountability to communities. He reviews how the rights-based approach for access to information has affected the ESG disclosure of DFIs. The blog welcomes the shift towards presumption of disclosure from DFIs, and considers how a commitment to pro-active disclosure of all ESG information is needed for openness and accountability to the public and project-affected communities.

openness and accountability to the public and project-affected communities.

Other news

Here’s a selection of news stories we’ve been reading over the last few weeks:

A new blog from Development Initiatives examines the partial data released on ODA spending from the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC). The authors found the available data showed a large increase in multilateral loans to the poorest countries – raising questions on debt sustainability. Full reporting from bilateral donors for 2020 has been delayed, undermining transparency and accountability.

The Climate Policy Initiative (CPI) has released the Global Landscape of Climate Finance 2021 report, which finds that total climate finance has steadily increased over the last decade, reaching US$ 632 billion in 2019/2020. However, the CPI warns this is nowhere near enough finance to limit global warming to 1.5 °C. Based on scenarios that explore climate finance needs for energy systems, buildings, industry, transport, and other mitigation and adaptation solutions, the CPI estimates that climate finance must increase by at least 590% – to US$ 4.35 trillion annually by 2030 – to meet climate objectives.

Transparency International has published the Corruption Perceptions Index 2021, which reveals that corruption levels remain at a standstill worldwide. The index ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and businesspeople, and uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean. More than two-thirds of countries score below 50 and the average global score remains static at 43. Since 2012, 25 countries significantly improved their scores, but in the same period 23 countries significantly declined.

The Covid Collective has published a report which gives a broad overview of trends in bilateral, multilateral, and private foundations’ funding strategies over the course of the pandemic to highlight shifts in practice and examine how development finance approaches should adapt in a post-COVID world. While aid budgets did not on the whole see the dramatic drop that some feared, aid and development spending did not make up for losses in other areas of finance such as private investment, remittances and taxes. The review also raises concerns over funding commitments not being met on time, resources being front-loaded and the shift from grants to loans.

The OECD has launched a new digital hub to improve transparency around the taxation of development aid by presenting approaches taken by participating donor countries to claiming tax exemptions on goods and services funded by official development assistance (ODA).

This AULA blog argues that the US foreign assistance portals are inadequate to assess reform on locally led development. It says that civil society groups will not be able to use the portals, such as foreignassistance.gov, in their existing form to hold the US Agency for International Development to account on its recent commitment to increase assistance to local partners.

Devex has examined pipeline and forecast documents, operational summary reports, and programmes databases of eight major multilateral development banks to identify priority sectors, countries, and programmes for the coming years.

This blog from MIT GOV/LAB looks at whether machine learning can be used to help predict development results, examining focus and contextualisation.