Transparency & Accountability • 24 Aug 2021
Joint CSO Submission EIB Standard on Intermediated FinanceBack to overview
As part of the public consultation on the review of its Environmental and Social Sustainability Framework (ESSF), 16 civil society organisations sent a joint submission to the European Investment Bank's (EIB) urging it to improve its standard on intermediated operations.
Civil society has long raised concerns about the lack of transparency behind the EIB's intermediated operations, with the EIB providing next to no information on where the intermediated money ends up.
Intermediated finance means that the bank does not lend directly to a project, but instead uses so-called financial intermediaries. This type of lending at the EIB has doubled in the last 20 years, currently accounting for around 30 percent of the bank’s total operations.
In addition, all operations of the European Investment Fund (EIF, part of the EIB Group) are intermediated, making this standard even more relevant for the EIB Group as a whole. Hence, it is of utmost importance that the standard explicitly covers both the EIB and the EIF.
The draft standard however makes little or no attempt to address civil society's fundamental concerns. It is crucial for the EIB develop a policy that clearly sets out EIB’s E&S commitments and responsibilities to ensure that its intermediated finance does no harm and that affected communities can access remedy. The EIB’s operations through the financial intermediaries should be subject to the same transparency and environmental and social standards as its direct lending.
The Joint Submission proposes concrete recommendations on how the EIB can improve its approach. These recommendations are to be considered in connection with demands already formulated in the framework of the ongoing review of the EIB Transparency Policy (see here) and together with demands to significantly reinforce the future “EIB group Environmental and Social Policy”.
Read the full submission here:
Joint Submission EIB Standard on Intermediated FinanceDOWNLOAD HERE
Find out more about the EIB's ESSF review and other CSO's contributions here