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World Bank spent billions of dollars backing fossil fuels in 2022, study finds

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The Guardian or enjoy below

🗞️ Driving the news: Despite commitments to transition to a low-carbon economy, the World Bank is alleged to have invested billions in fossil fuels in 2022, primarily through trade finance, according to research by the campaign group Urgewald

🔭 The context: Trade finance, a tool streamlining global deals, differs from conventional project finance, often leveraging intricate financial tools to boost working capital
• The International Finance Corporation (IFC) is deeply involved in trade finance, with research by Heike Mainhardt estimating their contribution to oil and gas sectors at around $3.7bn (£2.95bn)

🌎 Why does it matter for the planet: The World Bank's significant support for fossil fuels contradicts global efforts to combat climate change and align with the Paris Agreement's objectives

⏭️ What's next: Several countries are pushing for the World Bank's reform, emphasizing the need for a more transparent and low-carbon-focused strategy
• The call for change comes alongside leadership shifts, with Ajay Banga recently taking over as president after David Malpass's resignation

💬 One quote: “They can’t say that they are aligned with the Paris agreement, because there isn’t enough transparency to be able to tell” (Heike Mainhardt, author of Urgewald research) 

📈 One stat: Urgewald's research suggests the World Bank supplied about $3.7bn (£2.95bn) in trade finance in 2022 that likely funded oil and gas developments

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