Today, the European Parliament approved a critical report on the activities in the financial arm of the EU – the European Investment Bank (EIB). This report sends a strong signal to the bank: it needs to step up its sustainability, transparency and accountability.

Yesterday, in a debate in the plenary of the Parliament held in Strasbourg, the EIB President Mr Hoyer was already undergoing strong attacks on the continuous lending the EU’s financial arm is providing to the fossil fuel industry. MEPs from various political groups in particular called on the EIB to align its financing to the objectives of the Paris Agreement.

MEPs recognised the potential of the EIB in stirring growth and job creation but demanded more detailed information on where the money went and the concrete impact of the bank’s activities. By calling for more transparency, demanding better results in reducing inequalities and contributing to cohesion around Europe, MEPs keep referring to some of the bank’s weak spots.

The European Commission’s Vice President Katainen voiced its expectation for the EIB to improve its taxation policy, so that European public funding does not end up in tax havens or supporting companies evading or avoiding taxes.

Below are highlighted key areas of the report, which ultimately reflected many of the positions of the rapporteur on the file, MEP Eider Gardiazabal (S&D, Spain):

- The Parliament urged the bank to “align its portfolio with the global average temperature increase target of 1.5 % in line with the Paris Agreement, through the swift and complete phasing-out of fossil fuel projects and the prioritisation of energy efficiency and renewable projects”, pointing out to the opportunity to do so offered by the review of its energy policy foreseen for 2018.

- MEPs also welcomed the extension of the European Fund for Sustainable Investments (EFSI) until 2020, mentioning that it should overcome the “problems identified in the current scheme, namely in relation to additionality, sustainability, climate action, geographic balance and advisory hub activities“. This mirrors our joint NGO analyses published in the reports "Best Laid Plans“ and „Doing the same but expecting different results“.

- In the taxation field, the EIB is being asked to step up its game, for instance by demanding country-by-country reporting to its clients, as part of its corporate social responsibility strategy. The report further “calls on the EIB not tomake use of or engage in tax avoidance structures, in particular aggressive tax planning schemes or practices which do not comply with tax good governance criteria […] and not maintain business relations with entities incorporated or established in jurisdictions that do not cooperate with the Union in relation to the application of the internationally agreed tax standards on transparency and exchange of information” and to “better address tax avoidance in its due diligence checks”.

- To operationalize their headline demand on the “enhanced economic role of the EIB Group, its increased investment capacity and the use of the EU budget to guarantee its operations“ to „be accompanied by greater transparency and increased accountability, so as to ensure genuine public scrutiny of its activities, project selection and funding priorities“, MEPs issued further recommendations on the publication of the minutes of EIB management committee meetings, on offering better protection to whistleblowers and disclosing more information on the assessment of projects the bank is supporting.

- In a context where its grievance mechanism is under threat, the EIB is also urged to “reinforce the independence, legitimacy, accessibility, predictability, equitability and transparency of its complaints mechanism”.

- Finally, the Parliament took a strong stance on Human Rights. It first noted that “in many of the EIB’s countries of operations, human rights, and in particular the freedoms of expression, assembly and association, are under attack in a variety of ways, from violent crackdowns on protests and the criminalisation of free speech, to arbitrary arrests, the detention of human rights defenders and restrictions on civil society organisations;“. This abrupt assessment brought MEPs to „call on the EIB to adopt a Human Rights Action Plan [...] in order to forestall any negative impacts of EIB projects on human rights, to ensure that the EIB’s projects contribute to the enhancement and fulfilment of human rights, and to provide remedies in the event of human rights violations”.

Read the full Parliament report here.