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Environmental Sustainability: An Evaluation
of World Bank Group Support
July 2008

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►Environmental problems are enormous and increasing
• Climate change
• Air and water pollution
• Soil erosion and desertification
• Water scarcity
• Loss of biodiversity
►Developing countries
are severely affected:
• Growth
• Poverty
►Both public
and private
action are needed
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WBG timeline: Increased attention since 1990
1970 1980 1990 2000
WB project focus:
"do no harm"
World Development Report
(for Rio summit) (1992)
MIGA: Enhanced project-
level focus from 1998
WB: Increasingly proactive role from 1992
* 4-fold agenda: Safeguards, Stewardship,
Mainstreaming, Global sustainability
IFC: Deepening
attention to project-
level impacts from 1991
WBG: 2001 Environmental Strategy
IFC: Equator Principles
WB: 2003 World Development
Report

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Key messages
► The World Bank Group has made progress since
1990 as an advocate for the environment
► But treatment of environmental issues in many
WBG country programs remains weak due to
major external and internal constraints
► The WBG needs to increase its engagement and
effectiveness in environmental issues through
– Greater attention in Bank Group and country strategies
– More effective cross-sectoral approaches
– Better measurement of activities and results
– Closer collaboration within the WBG and with partners

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This evaluation looks broadly at
WBG engagement FY90-07
►Broad coverage: World Bank, IFC, and MIGA
►Evaluation Objectives
– Assessing WBG effectiveness
– Identifying principal external and internal constraints
– Suggesting improvements going forward
►Perspectives: “Do no harm” and “ Do good”
►Methodology
– Literature review
– Portfolio review (variation across WBG due to data availability)
– 9 country case studies

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The 9 case study countries come from all
regions and a mix of MICs and LICs
►Together these countries account for 56% of population,
46% of GDP, and over 40% of Bank environmental
lending in developing and transition countries.
East Asia China
Latin America Brazil
Middle East/N. Afr Egypt
Sub-Saharan Africa Ghana, Madagascar,
Senegal, Uganda
South Asia India
Europe/Central Asia Russia

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Findings

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World Bank
1. Strategies
• 2001 WBG Strategy
• growing but still inadequate attention in country strategies
• even less in country-led PRSPs
2. Lending and grants
• exact amount unknown – at most 5-10% Bank total
• project performance better over time, but M&E still weak
• weaker performance in Africa
3. Nonlending
• as important as lending
• country environmental assessments: helpful where undertaken
• research influential: WDRs ’92, ’03; Greening Industry

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World Bank (cont)
4. Mainstreaming
• some improvement but still far to go (poverty, health-environment
links, vulnerability)
5. Partnerships
• needs strengthening within WBG and externally
• some good examples (GEF, Pov-Env. Ptnp. )
6. Global public goods
• less emphasis during evaluation period, though now growing
• some good examples (Montreal protocol, carbon finance)

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IFC
1. Environmental and social effects of investment projects
• 67% success rate in meeting IFC requirements and performance standards
• weak performance in Africa and in certain sectors
• limited attention to broader context
2. Environmental work quality
• appraisal generally good, supervision of financial intermediaries weak
3. “Doing good” initiatives
• M&E system generated insufficient data or still too early to assess
- Environment & Social Sustainability advisory services
- Equator Principles
Sustainability in IFC corporate strategies since 2001. Until recently
focus has been on “do no harm”. Move to more “do good”.

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MIGA
MIGA’s focus has been primarily on “do no harm”
Sustainability concept just incorporated in core business
1. Environmental and social effects
• Category A projects: better performance and increased
attention to social issues
• Category B projects: less attention, worse performance
2. Environmental work quality
• Strengthened environmental and social issues in underwriting
New policy and performance standards (2007): Go beyond
safeguards to promote sustainability in guaranteed projects

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Looking ahead

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Many constraints need to be confronted
►Clients (public and private)
• Competing demands (e.g. growth,
energy needs, governance, conflict)
• Insufficient client commitment
• Inadequate institutional capacity
and resources
►World Bank Group
• Competing priorities
• Inadequate staff skills and knowledge networks
• Difficulties of coordination across sectors, across WBG, and externally
• Difficulties of taking long-term view and of assessing country-level impacts
beyond individual projects

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The evaluation has four broad
recommendations
1. Elevate environmental sustainability as WBG
priority -- not just more of the same, but a
“transformational” change
2. Move to more integrated, cross-sectoral and area-
based approaches and strengthen staffing
3. Greatly improve ability to measure, monitor, and
evaluate activities and their results
4. Continue to strengthen partnerships

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What would success look like?
►A widely-shared understanding of the critical role
of environmental sustainability to development
►Clear alignment behind key strategic objectives
►Strong and effective WBG capacity
►Effective internal and external collaboration
►An emphasis on continual learning (from both
success and failure)…

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…and a more sustainable world for all

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Thank you
Evaluation available at:
www.worldbank.org/ieg/environmentalsustainability
Evaluation authors:
John Redwood (IEG-WB)
Jouni Eerikainen (IEG-IFC)
Ethel Tarazona (IEG-MIGA)