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									                     Advisory Panel Statement

Introduction                                             and Development/International Development
The external Advisory Panel, consisting of Julia         Association) has too often failed to translate its
Marton-Lefevre;1 Bjorn Stigson;2 Christian               environment agenda effectively from upstream
Avérous;3 Yolanda Kakabadse;4 and Olav Kjorven,5         analytical work, via Poverty Reduction Strategy
met on May 2, 2008, at World Bank Headquarters           Papers and Country Assistance Strategies,
to consider the draft IEG report, “Supporting            through to its downstream lending operations.
Environmental Sustainability: An Evaluation of
World Bank Group Experience, 1990–2007,” and           • Integrate energy and climate strategies and
prepared this statement afterward.                       deploy low-carbon technologies.
                                                         To support broad-based economic growth, de-
Terms of Reference                                       veloping countries will need substantial in-
The Advisory Panel was asked to consider                 vestments in infrastructure, particularly energy.
whether the evaluation succeeded in answering            The Bank Group is uniquely positioned to help
the questions it set out to examine, whether             countries integrate energy and climate strate-
there were gaps in conclusions and recommen-             gies into their national development plans, and
dations, and whether the key messages were               it should play a stronger role in this, in part-
effectively communicated.                                nership with other agencies. On the financing
                                                         side, the Bank Group could be more active in
Overall Conclusions                                      identifying and setting up financial mechanisms
Overall, the Advisory Panel found that the evalua-       as well as further developing the carbon mar-
tion report was of high quality and contained            kets to deploy low-carbon technologies for en-
sound findings. The panel supports the findings          ergy access projects in developing countries.
in relation to the following issues:
                                                       • Focus on environmental management through
• Mainstreaming of environment.                          investments.
  The World Bank Group has yet to internalize suf-       While Bank lending is by-and-large subject to
  ficiently the environmental challenge in its op-       environmental safeguards to minimize negative
  erations and business. Despite many excellent          impact, only a small fraction of lending goes di-
  achievements around the world, despite major           rectly to strengthen environmental manage-
  intellectual accomplishments and many policy           ment, advance environmentally sound growth
  innovations, and despite state-of-the-art envi-        and investment through and with the private
  ronmental safeguards, the Bank Group contin-           sector, and promote transitions toward envi-
  ues to give low de facto priority to the goal of       ronmental sustainability in key sectors such
  enhancing the environmental sustainability of          as transport, agriculture, and energy.
  development. This is documented convincingly
  by the evaluation report, particularly in terms of   • Coordination of actions in-house and building
  the levels of financing dedicated to this pur-         momentum with partners.
  pose, and the lack of integration of a systematic      The Bank Group has not sufficiently acted “as
  environmental sustainability perspective across        one” in addressing strategic environmental chal-
  policy and financial instruments. For example,         lenges. In most cases, International Bank for Re-
  the Bank (International Bank for Reconstruction        construction and Development/International


                       Development Association, IFC, and MIGA have            place, to meet broader environmental
                       pursued, separately, what they considered to be        objectives.
                       their particular niche “in the market.” While we     • Examine how the Bank Group establishes its
                       agree that mandates should remain distinct and         comparative advantage in environmental pro-
                       clear for each of the three, greater efforts to        gramming in relation to other players/partners
                       jointly identify and pursue opportunities for          in the field of environment and development,
                       synergy is expected.                                   including the regional development banks,
                           The Bank Group should look beyond itself           which have a distinct relationship with coun-
                       and its relations with client countries, not least     try governments in their regions, as well as
                       in the context of developing new strategies in         the United Nations and international non-
                       the environment and climate areas. The im-             governmental organizations.
                       perative of broader partnerships is recognized       • Provide sufficient qualitative analysis of the
                       in the evaluation, but more reflection is needed.      breadth and depth of stakeholder/partner con-
                       The reality of the environmental sustainability        sultation and their views.
                       challenge is such that the Bank Group cannot
                       realistically take it on in isolation from others.   The Advisory Panel recommends that IEG sharpen
                       It must approach partnership with the United         the focus and methodology of future evaluations to
                       Nations, with the private sector, and with civil     include these key performance factors.
                       society in a qualitatively new and strategic way.
                                                                            Specific Recommendations
                    The Advisory Panel considers these findings to be       The Advisory Panel understands and appreciates
                    central to the ability of the World Bank Group to       that, following its review meeting with IEG, a
                    influence environmental sustainability and develop-     number of its observations have been consid-
                    ment and recommends that these findings concern-        ered and some have been adapted and incorpo-
                    ing policy and operations be addressed as a matter      rated into the evaluation report. The Advisory
                    of urgency.                                             Panel would like to draw attention to some of
                                                                            these issues:
                    The Advisory Panel also found that the evalua-
                    tion did not adequately address some strategic          • The Bank Group must step up its efforts—
                    evaluative issues. These shall not be listed here         together with other partners—to make the eco-
                    in their entirety; however, the following areas are       nomic case for strong environmental action,
                    of particular concern to the Advisory Panel.              such as by systematically showing the health ben-
                                                                              efits of environmental improvements. A Stern-
                    • More evenly represent the balance between               like report on the economics of environmental
                      project and strategic-level questions. While it         action versus inaction should be considered.
                      has produced interesting findings and data re-        • Given the global, watershed developments in the
                      lated to some strategic-level issues, these are         larger environmental field over the last 10 years,
                      overshadowed by the heavy emphasis on proj-             the Bank Group needs a new, transformational
                      ect and portfolio analysis and performance.             environmental policy that addresses today’s
                    • Provide more data on whether the Bank Group             (known) needs and tomorrow’s (still evolving)
                      addresses the drivers for sustainability, and           challenges. This policy must look beyond a use-
                      make recommendations on how to strengthen               ful 10- to 20-year time horizon, to a 40- to 50-
                      the Bank Group’s strategy and approach.                 year time horizon as well. This time horizon is,
                    • Produce a comprehensive analysis of the ef-             at the very minimum, necessary to take into
                      fectiveness of the Bank Group’s performance             consideration the lifecycle impacts of invest-
                      as it relates to gender equity dimensions of en-        ments made today, such as in the power and
                      vironmental sustainability.                             transport sectors.
                    • Address the criteria with which the Bank Group        • Recent efforts to strengthen IFC’s environ-
                      makes its investment decisions, in the first            mentally oriented operations and IFC’s im-

                                                                                       A D V I S O R Y PA N E L S TAT E M E N T

    plementation of its environmental safeguards        Bank’s various forestry initiatives together,
    system, to ensure their effectiveness and im-       provide the ideal backdrop for setting clear
    pact, must be redoubled. IFC’s record to date       conceptual and strategic priorities on environ-
    is mixed.                                           mental sustainability for the Bank Group.
•   MIGA needs to strengthen the implementa-            President Zoellick has stressed that the time has
    tion of its environmental safeguards as well as     come for a transformation in the way the Bank
    embrace a stronger commitment to proac-             Group approaches development. We support this
    tively “do good” as an important area of its        view.
•   The Bank Group should more broadly sup-             In this context, the Advisory Panel wishes to flag
    port the transfer and effective application of      four areas of strategic importance with real
    low-carbon technologies and promote more            consequences for policy and operational priority-
    systematically enhanced technology collabo-         setting, in the context of promoting sustainable
    ration among developed and developing               development and poverty reduction:
•   Small and medium enterprises are critical for       • Transitioning toward low-carbon economy,
    pursuing sustainable economic growth and              coupled with expanding clean and affordable
    halting environmental degradation. The Bank           energy access for the poor
    Group needs to pay more attention to this           • Preserving biodiversity while improving rural
    sector and provide more support, particularly         livelihoods
    in building much needed capacity.                   • Improving resource productivity
•   Declaring that the Bank Group is a unique and       • Protecting water resources, coupled with ex-
    special institution of knowledge and learning,        panding access to water and sanitation.
    a “brain trust” of applied knowledge, is not
    sufficient. The role of the Bank (and the entire    The global environmental challenge is unprece-
    Bank Group) as a knowledge bank must go be-         dented and it requires collaboration among a
    yond this to delivering, expanding, and testing     large number of development partners, includ-
    this learning—in tandem with partners. The re-      ing the United Nations system, the Global
    port has little to say about the impact of knowl-   Environment Facility, regional development
    edge and learning in the area of environment.       banks, bilateral donors, the private sector,
                                                        research institutions, and civil society. To succeed
The Advisory Panel recommends that the areas            in implementing a transformative vision of
listed above be urgently given priority in further      environmentally sustainable development, part-
strategic thinking, action, and evaluation by the       nerships are a conditio sine qua non. The
World Bank Group.                                       Advisory Panel believes the most central partner-
                                                        ship must continue to be with the client
Conclusion: A Forward-Looking                           countries, but the challenge of environmental
Perspective                                             sustainability reaches beyond the “confines” of
The Advisory Panel feels strongly that the Bank         that relationship alone. Much more systematic
Group needs to interpret the findings and               and stronger partnerships must be built and
recommendations of this evaluation against the          harnessed across the entire spectrum of
backdrop of environmental, economic, and politi-        shareholders and stakeholders. We specifically
cal realities. A number of environmental and            mention a few, as follows:
natural resource challenges are now attracting
the attention of heads of states and governments,       • The United Nations. Over the past several
as well as macroeconomists and development                decades, there has been no real concerted at-
economists. The forthcoming climate change                tempt at defining and implementing a com-
framework and a host of evolving climate-related          plementary and mutually supportive approach
funds and facilities, as well as efforts to pull the      about the roles and responsibilities of the Bank


                      Group and United Nations agencies in the area           with civil society organizations and networks
                      of environment. It is time for this to change.          can greatly expand the reach, effectiveness,
                      Beginning with climate change, but broaden-             and legitimacy of Bank Group efforts. Many civil
                      ing the scope gradually to other areas, the             society organizations have a stronger techni-
                      Bank Group and key United Nations agencies              cal capacity than government institutions, and
                      should work out a practical and pragmatic way           can promptly react to immediate needs. While
                      forward, aimed at being able to offer partner           working at local or national levels, many are ac-
                      countries stronger and more strategic sup-              tive networkers with similar organizations
                      port. The emerging environmental crisis re-             worldwide, generating and sharing informa-
                      quires a forceful and concerted multilateral            tion, experiences, and lessons.
                      response. Countries and people deserve noth-          • The scientific community. The evaluation does
                      ing less.                                               not state much about how the Bank Group has
                    • Development banks. The Bank Group should de-            worked with or tapped the knowledge of the
                      velop more strategic relationships with the mul-        scientific community. While recognizing the
                      tilateral and bilateral development banks by            progress that has been made in instituting
                      building on their distinct relationships with local     modern knowledge management and net-
                      shareholders and stakeholders in delivering co-         works in the organization, it is not clear if the
                      ordinated support to key environmental initia-          Bank Group has effectively harnessed scientific
                      tives. The new partnership approach adopted in          knowledge to develop ”cutting-edge” ap-
                      the design and implementation of the new cli-           proaches. The Bank Group should consider op-
                      mate investment funds could serve as a model            tions for ensuring how best to do this for the
                      for pursuing other, Bank Group/multilateral de-         future, including the option of reestablishing
                      velopment bank–supported environmental sus-             a senior environmental science position.
                      tainability efforts.
                    • The private sector. The importance of the private     As the international community focuses on the
                      sector can hardly be exaggerated. The Bank            need to urgently address global and local
                      Group must take a hard look at how it works           environmental challenges, large amounts of
                      with the private sector, and the signals it sends     resources will hopefully be made available to find
                      to the private sector about its commitment to         solutions to these challenges. However, new
                      environmental sustainability, and the oppor-          resources are not sufficient. The Bank Group
                      tunities and challenges involved in promoting         needs to complement them with transforma-
                      it. The opportunities for partnership with firms      tional changes of its corporate culture, making
                      and business groups at all levels are vast. Tak-      environmental sustainability fully part of its
                      ing a truly strategic and “picky” approach is es-     development role.
                      sential, as is working more seamlessly across the
                      Bank Group. The Advisory Panel agrees strongly        The report’s evaluation provides the Bank Group
                      with the evaluation on the need to design a           with an excellent basis and opportunity for
                      much more strategic approach to market trans-         setting a new course, commensurate with the
                      formation for environmental sustainability (in-       most pressing challenges of our time.
                      cluding transition to low-carbon economy),
                      something which requires coordinated work in          The Advisory Panel looks forward to the
                      relation to both public and private sectors.          decisions of the governing bodies with great
                    • Civil society organizations. Strategic partnership    anticipation.


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