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Transparency International warns that billions of climate change dollars face corruption risk

New reports show 7 of the bigger, multinational climate funds must do more to promote transparency, accountability and integrity

Funds set up to manage the global response to climate change must act now to prevent the abuse of power, bribery and secret deals from disrupting the flow of billions of dollars set aside to address the issue, global anti-corruption coalition Transparency International warned today.

Climate change will challenge countries in every continent in the coming years, bringing floods, droughts and stronger storms. Transparency International analyzed seven multinational funds set up to channel financial support to help countries adapt to or mitigate the impacts of climate change.

All of the funds fall short in the promotion of transparency, integrity and accountability in their processes and procedures. None have a comprehensive, fund-wide zero-tolerance policy for corruption, according to the assessments on what the funds are doing to stop corruption published by Transparency International today. Click here to see the full reports.

Most of the funds had poor policies for penalizing corruption or fraud, with only two funds having passable sanctions procedures.

“The efforts to respond to climate change are being entrusted with far more than tax-payers’ money, they represent the world’s collective effort to respond to the great challenge of our time,” said Ben Elers, Director of Programmes at Transparency International. “If that trust is abused the consequences will be great, not just for the people who suffer the most acutely from climate change, but for all of us.”

It is estimated that by 2020 more than $100 billion will be spent each year on climate change. It is imperative all of this money reaches the right projects and the right people, especially when one considers that most recipient countries for climate finance have low scores in Transparency International’s Corruption Perceptions Index.

In five detailed assessments, Transparency International examined the anti-corruption practices and internal accountability mechanisms of seven multilateral climate funds: the Adaptation Fund, the two Climate Investment Fund Trust Funds, two of the Global Environment Facility’s funds, the UN-REDD Programme, and the Forest Carbon Partnership Facility.

Despite weaknesses, the funds have made important strides in effective financial reporting and auditing. They all also exhibit relatively high levels of transparency that allow the public to obtain relevant and timely information on their activities and decisions.

By highlighting areas where governance should be improved to reduce corruption risks, the assessments aim to bolster the funds’ ability to deliver on their promise.

Among the main recommendations in the reports:

  • Each fund needs to establish a fund-wide, zero-tolerance for corruption policy.
  • All of the funds can improve the timeliness and thoroughness of their reporting on activities, better enabling monitoring by civil society.
  • The funds need to strengthen the sanction regimes for any staff or partners who engage in corrupt behaviour.
  • Funds should establish or bolster internal whistleblowing procedures as well as clarifying the complaints mechanisms which citizens can use to report misconduct or other concerns.

These climate funds are pioneering new approaches to combat climate change in over 100 countries worldwide. While international cooperation and positive intentions are clearly evident, the complex network of funders, government ministries and implementing agencies leaves gaps where fraud and corruption could siphon off funds and divert much-needed resources.

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