Today, the European Parliament approved two reports (see here and here) on the activities of the financial arm of the EU – the European Investment Bank (EIB). The two reports differ on some aspects – the one led by a far-right political group being less critical than the Budgetary Control committee’s – but both send a strong signal to the bank: it needs to step up its sustainability, transparency and accountability.

Yesterday, in a debate during the plenary session of the Parliament held in Strasbourg, MEPs recognised the EIB’s potential to stir growth and create jobs but demanded better results in fighting poverty and inequalities and contributing to cohesion around Europe.

While the EIB President Werner Hoyer praised the bank for remaining “at the forefront of International Financial Institutions when it comes to transparency standards and the quality of its governance”, various political groups called for more transparency and accountability of the EU Bank and pointed the finger to some of the long-known bank’s weak spots on fighting tax avoidance or conflicts of interests in its governing bodies.

Mr Hoyer also came under strong attacks on the bank’s continued support to the fossil fuel industry. MEPs from various political groups particularly urged the EIB to align its financing to the objectives of the Paris Agreement and prioritise climate-friendly investments.

The debate was also an occasion for the EIB President to call on the Parliament to support a central role for the EIB in the EU development finance architecture for the post-2020 period. He stated that “the EIB, as the EU Bank, stands ready to facilitate and coordinate EU external investment for EU policy makers”. Such plea is linked to the bank’s concern to lose its current privileged status under the 'External Lending Mandate' – which means its access to European guarantees to cover the bulk of its operations outside of Europe. Tensions over this file have emerged between the European Commission and the EIB over the last year.

Below are highlighted key themes of the report led by the Budgetary Control committee, which ultimately reflected many of the positions of the rapporteur on the file, MEP Georgi Pirinski (S&D, Bulgaria):

– The Parliament pointed out the opportunity for the EIB to “become a climate action leader” offered by the review of the its energy policy in 2019. In this context, it called on the EIB “to prioritise its lending to energy efficient and small-scale, decentralised renewable energy sources and to present an ambitious plan to stop funding fossil fuels’ projects” and to align its operations with the Paris Agreement by 2020.

– MEPs also took a strong stance on Human Rights. Indeed, the EIB was asked to “establish a Human Rights Strategy and enhance its due diligence at project level to identify and address human rights relates risks in all its activities and throughout the lifespan of its projects”. Such demand echoes civil society’s requests that have long been ignored by the EU Bank. In addition, the Parliament claimed that the EIB should set up a mechanism for human rights defenders to alert the bank to deteriorating environment or risks of conflict and reprisal.

– In the taxation field, the EIB was asked to step up its game when adopting its revised taxation policy – which is to be approved early February 2019. For instance, the Parliament requested the bank to “adopt responsible taxation policy ensuring that the EIB does not finance clients involved in tax avoidance and tax evasion schemes or operating via tax havens”.

– As concrete steps towards greater transparency and increased accountability at the bank, MEPs issued further recommendations on the publication of the minutes of the EIB management committee and Board of Governors’ meetings, better protection for whistleblowers and on the disclosure of the beneficial ownership data of its clients.

Xavier Sol, Director at Counter Balance, said:

“Once more, the European Parliament asks the EIB to be more transparent and accountable towards European citizens. With the European elections due in May, we’re wondering if the EIB will finally listen to this call. Another aspect the bank was called to raise the bar on is Human Rights: to avoid further violations, the bank needs a more strategic approach and improved due diligence at project level. This should become a political priority in the coming years.”

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said:

“Voicing the concerns of European citizens, the message of the Parliament is clear: the European Investment Bank needs to align its operations with the objectives of the Paris Agreement. How? By ending support to fossil fuels and prioritizing climate-friendly investments in energy efficiency and small-scale renewable energy sources. Business as usual should not be an option anymore.”