IMF, World Bank, OECD Seek More Consistent Climate-related Financial Data Globally

Ndubuisi Francis in Abuja, Nume Ekeghe and Ugo Aliogo in Lagos

The International Monetary Fund (IMF), the World Bank, and the Organisation for Economic Cooperation and Development (OECD) have identified lack of robust frameworks in emerging and developing economies, and underscored the need to make climate-related financial data more compatible and consistent across all the regions of the world.

The three global institutions highlighted this in a new report on climate-aligned finance which they collaborated to release.

The report highlighted the need for scaling up private finance to support the transition to net zero, discussing the various tools and frameworks, like taxonomies, scoring methodologies, and disclosure employed to achieve this.

It particularly addressed lack of robust frameworks in emerging and developing economies, aiming to make climate-related financial data more interoperable and consistent across regions.

One significant aspect of the report was its focus on addressing market fragmentation and higher transaction costs, which have been attributed to data inconsistencies.

The aim was to improve comparability and interoperability among various countries and financial markets.

The report seeks to aid policymakers, regulators, and private-sector entities in enhancing their sustainable finance ‘alignment approaches.’

The IMF is an international organisation that aims to foster economic stability, the World Bank focuses on poverty alleviation through loans, and the OECD is an intergovernmental economic organisation working to stimulate economic progress and world trade.

According to a statement, the primary reason for the tripartite partnership on the new report was to offer actionable methods to ensure that the financial sector’s activities align with the objectives of the Paris Agreement.

The Paris Agreement is a legally binding international treaty on climate change, which was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France on  December 12, 2015. It entered into force on 4 November 2016.

The IMF primarily offers financial assistance and policy advice to its member countries, usually in the form of short-term loans aimed at stabilising economies.

On the other hand, the World Bank primarily provides long-term loans and grants to help countries build infrastructure and reduce poverty.

The OECD works to shape policies that foster prosperity, equality, and sustainability, providing a platform for governments to discuss and coordinate policies that solve common problems.

IMF Lead author, Charlotte Gardes-Landolfini, stated, “Alignment approaches can inform the design (and reporting for accountability) of credible and comparable transition plans by investors or other firms upstream.

“Combining backward- and forward-looking approaches could also be conducive to covering the whole-of-economy climate transition, including carbon-intensive sectors and EMDE-based issuers, where much of the potential for financing of decarbonisation processes remains untapped.”

Also, World Bank Lead author, Fiona Stewart said, “As a global public good, climate change mitigation requires an unprecedented level of cross-country policy cooperation and coordination.

This paper will help scale up climate finance by contributing to the design of a transition finance framework applicable to emerging markets and developing economies.”

Meanwhile, the IMF, World Bank and the Moroccan government have confirmed that the city of Marrakech would host the annual meetings of the Bretton Woods institutions as planned between October 9 and 15, despite the devastating 6.8 magnitude earthquake in the country.

The stakeholders had at the weekend agreed to take a final decision Monday on whether or not to go ahead with holding the meetings in the North African country in the aftermath of the recent earthquake.

A joint statement signed by the World Bank President, Ajay Banga; IMF Managing Director, Kristalina Georgieva; and Morocco’s Minister of Economy and Finance Nadia Fettah Alaoui confirmed that Marrakech, Morocco will still host the October meetings

“The managements of the World Bank and IMF, together with the Moroccan authorities, have agreed to proceed with holding the 2023 Annual Meetings in Marrakech from October 9 to 15, adapting the content to the circumstances,” the statement read.

According to the statement, the decision was based on assessment of Marrakech capacity to host the event taking into consideration that the meetings would not disrupt relief and reconstruction efforts and that the safety of participants can be assured.

“As we look ahead to the Meetings, it is of utmost importance that we conduct them in a way that does not hamper the relief efforts under way and that is respectful to the victims and the Moroccan people.

“At this very difficult time, we believe that the Annual Meetings also provide an opportunity for the international community to stand by Morocco and its people, who have once again shown resilience in the face of tragedy. We also remain committed to ensuring the safety of all participants,” it said.

Relatedly, the African Export-Import Bank (Afreximbank), yesterday, announced a $500,000 donation to provide immediate humanitarian relief to the Kingdom of Morocco and especially towards the hard-hit regions of Al Haouz, Chichaoua, Taroudant, Amizmiz and Marrakesh, following the devastation caused by a massive magnitude 6.8 earthquake.

The earthquake was the strongest to hit the nation’s centre in more than a century with a fatality rate reaching nearly 3,000, and many more injured. Historical and cultural sites have also suffered severe damage and many citizens have been left displaced.

 The donation would be channelled towards assisting the Government in its disaster recovery, relief, and reconstruction efforts.

This support would enable the provision of basic needs of food, water, clothing, and shelter as well as restoring power and other essential services to impacted families.

In a statement, Afreximbank’s President and Chairman, Prof. Benedict Oramah said: “We are committed to helping the Government of Morocco recover from this devastating earthquake. Providing food, water, and shelter is vital in the aftermath of the earthquake and today’s donation demonstrates our continued commitment to humanitarian relief efforts across Africa, in times of crises.

“It will lend a helping hand to support organizations on the ground as they continue recovery efforts. Our hearts and prayers go out to Morocco, a member state of the Bank and her citizens in these trying times.”

It noted that the support was consistent with the Bank’s response to humanitarian crises in its Member States including among others, the 2014 Ebola outbreak, Tropical Cyclone Idai in 2019, the Covid-19 relief efforts in 2020 and support to flood relief efforts in Southern Africa in 2022 and 2023.