Topic Guide: Corruption and Climate Finance

The institutions established to manage climate finance require the highest governance standards to safeguard against corruption at all levels, including: clear chains of accountability; conflict of interest and anti-corruption policies; safe and accessible corruption complaints mechanisms; effective sanctions for wrongdoing; regular audits and oversight of procurement; and, citizen engagement and monitoring of climate policy and project cycles.

From 2013 to 2014, Transparency International published governance assessments of seven multilateral climate funding initiatives: the Adaptation Fund, the two Climate Investment Funds (CIFs) trust funds, the Global Environment Facility’s Special Climate Change Fund and Least Developed Countries Fund, the Forest Carbon Partnership Facility and UN-REDD. The studies found that none of the funds had a comprehensive, zero tolerance for corruption policy in place, and that they lacked clarity regarding their accountability mechanisms for decision-making processes or sanctions for unethical or corrupt behaviour.[1] Since then, the Adaptation Fund, the GEF and the CIFs have clarified their accountability frameworks. The Adaptation Fund has adopted a zero-tolerance policy and a complaints handling mechanism. The CIFs have introduced a code of conduct for their governing body. The GEF Council has determined that it will adopt a policy on ethics and conflicts of interest. These, among other efforts, are crucial to safeguard against corruption and promote institutional integrity.[2]