During its plenary session in Strasbourg yesterday, the European Parliament approved two reports (see here and here) on the activities of the European Investment Bank (EIB), the world’s largest public lender and lending arm of the European Union. One of the reports was led by MEP Pedro Silva Pereira in the Committee on Economic and Monetary Affairs and the other one by MEP Bas Eickhout in the Committee on Budgetary Control (CONT).

Following a debate with EIB President Werner Hoyer, the Parliament called on the EIB to step up its game when it comes to climate, transparency and human rights. The EIB’s role in financing the European Green Deal and in the EU’s economic response to the COVID-19 crisis was also a key focus for MEPs.

In particular, the CONT report urges the EIB to require companies supported under recovery measures to “comply with social and environmental conditions, including the adoption of decarbonisation plans, so as to increase their resilience, and to refrain from paying out dividends, bonuses for senior management and share buy-backs”.

With regards to climate, both reports welcome the EIB’s commitment to align all of its operations with the objectives of the Paris Alignment and ask for concrete steps to be taken, for instance by making its transport portfolio more climate-friendly. The ECON report in turn “stresses the importance of aligning the EIB’s transport portfolio and transport lending policy with the Paris Agreement as soon as possible”. Both reports called for more support for modal shifts towards low and zero-carbon transportation, such as rail, cycling and public transport, especially for underserved communities and localities. In addition, the Parliament calls on the EIB to develop an ambitious action plan to require all its clients to have clear and binding decarbonisation plans in line with the Paris Agreement.

Echoing civil society demands, the reports urge the EIB to improve its approach to human rights at a time when the EIB is planning to raise its development profile. The ECON report calls on the EIB to “increase its monitoring of and reporting for its projects outside of the EU” and “strengthening human rights due diligence”. Both reports also asked the EIB to increase its presence on the ground and to have more staff focusing on development issues. The ongoing review of the EIB environmental and social standards was highlighted as a key opportunity for the bank to truly entrench the “do no significant harm” principle in all its operations.

Last but not least, MEPs asked for massive improvements when it comes to transparency and accountability. Parliamentarians are concerned about the proposal for a new EIB transparency policy that “falls short of meeting the demands made by Parliament and civil society organisations to step up its transparency policy in line with the best practices and standards employed by other financial institutions”. Central to both reports was the concern regarding the lack of transparency on the use of financial intermediaries like commercial banks and investment funds, and the need to make the meetings of EIB governing bodies more transparent.

Xavier Sol, Director at Counter Balance, said:

The Parliament sends strong signals to the EIB: as the financial arm of the EU, it can and should do more to steer the transformation of our economies and societies. It is now high time for the EIB to deliver on the Parliament’s calls, by becoming a more transparent, accountable and sustainable institution. There are concrete opportunities for the EIB to take steps, as it is revising its internal policies on transparency, fraud, transport and its social and environmental standards in 2021”.

Clara Bourgin, Policy and Advocacy Officer, said:

“Despite some recent positive developments on the climate front, the EIB still has a long way to go in order to put the public good at the forefront. An important issue relates to the protection and promotion of Human Rights, for which the Parliament echoes civil society demands by asking for increased and more solid due diligence to avoid contributing to Human Rights violations across the globe.”