David Malpass Is a Climate and Development Failure
Under the leadership of David Malpass, the World Bank has been dragging its feet on climate action at a time when we need it to run. It is time for him to go.
Next week, the World Bank Group will have its annual meetings in Washington, D.C. The bank is a leading international development finance institution, backed by 189 governments, that commits more than $100 billion a year in financing for developing countries. Its dual aims are ending extreme poverty and promoting shared prosperity. Its own research has found that climate change is a major threat to these goals: Left unaddressed, climate change could push up to 132 million people into extreme poverty by 2030. Understandably then, governments have called on the World Bank to make addressing climate change a core part of its work. To enable this, the World Bank needs to implement several important reforms. A key impediment is David Malpass, the bank’s current president.
Malpass recently attracted media headlines after he appeared on a New York Times panel to discuss climate finance. The moderator asked him three times about Al Gore’s claim that he was a climate denier and whether he agreed “man-made burning of fossil fuels is rapidly and dangerously warming the planet.” Three times he demurred, eventually declaring “I don't even know—I'm not a scientist.” This was not the first time Malpass, who was nominated by former president Donald Trump for the World Bank job, has questioned or denied climate science.
This is not acceptable for the leader of the World Bank.
Following his recent comments, Malpass went on something of an apology tour, with appearances on CNN, Politico, and at Stanford University. His efforts to walk back his comments have been unconvincing: claiming variously that the question “was pretty much off topic,” that “I wasn’t prepared,” and that “I don’t always do the best job in answering questions or hearing what the questions are.” These excuses ring hollow—the event was focused on climate, and Al Gore had reiterated the charge that Malpass was a climate denier and not fit to lead the World Bank earlier in the day at the same event. This was a foreseeable question. His equivocations reveal his true beliefs.
We know climate change is not a priority for Malpass, not just from his words but from his deeds. Under his leadership since 2019, the bank has been dragging its feet on taking the climate crisis seriously, at a time when we need it to sprint:
- The World Bank is lagging behind its peers in the share of its funding dedicated to climate. Its current target is for 35 percent of its lending to deliver climate co-benefits. Compare this to the 50 percent targets of other multilateral development banks (MDBs) such as the Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, and European Investment Bank. The World Bank has already met its unambitious target, though questions remain about the reliability of this reporting. They could be doing more.
- Beyond climate-focused financing, the World Bank has been slow to align its overall lending portfolio with the Paris Agreement’s goal of keeping warming to 1.5 degrees Celsius above preindustrial levels—and it has worked to hamper other MDBs from doing so. In 2018, MDBs announced they would develop a joint approach to harmonizing their operations with the Paris Agreement and would present this the following year. But after Malpass assumed office in 2019, this never happened. The World Bank was widely seen as the main impediment to getting collective agreement, and other MDBs have since moved ahead with their own, more ambitious individual Paris alignment approaches. In 2021, the World Bank finally announced target dates for aligning its portfolio with the Paris Agreement’s goals. In a critical decade for climate action, the bank declared that it will not be Paris-aligned until mid-2023 for its main low- and middle-income country financing arms, and mid-2025 for its private sector arms. It has still not published details on its criteria for Paris alignment, nor has it been willing to commit to the 1.5 degrees Celsius temperature goal, a move that United Nations Assistant Secretary-General for Climate Action Selwin Hart called out last year as “shocking and deeply disappointing,” continuing, “I’m compelled to single out the World Bank as an ongoing underperformer, which must substantially lift its game if its efforts at climate action are to be taken seriously.”
- The World Bank has provided more than $14 billion in project financing for fossil fuels since the Paris Agreement was adopted, more than any other MDB, even with its policies restricting coal, and upstream oil and gas financing. When indirect investments through financial intermediaries and policy-based lending are taken into account, this figure is even larger. The World Bank also refused to sign onto a statement, endorsed by 34 countries and 5 financial institutions, including the European Investment Bank, that committed to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances that are consistent with a 1.5 degrees Celsius warming limit and the goals of the Paris Agreement.”
- Under orders from Malpass, the World Bank watered down a joint statement by MDBs at the COP26 climate summit, removing all specific targets and deadlines for climate finance commitments.
- The World Bank’s own staff have spoken out about how Malpass has impeded them from doing more on climate.
It would be bad enough if Malpass was only undermining the World Bank’s own efforts on climate change, but as the examples above show, the World Bank has also been hampering the work of other MDBs to develop joint approaches toward climate action. It is good that other MDBs have forged ahead with more ambitious individual policies, but a fragmented system is not as ideal as robust common approaches that might have been possible were Malpass not frustrating them.
Malpass’s failures extend beyond climate. Under his leadership, the bank was slow to disburse emergency pandemic funding, delayed financing for COVID vaccine purchases and deployment (Malpass also publicly opposed waiving intellectual property rights for COVID vaccines), and refused to participate in the G20’s Debt Service Suspension Initiative, which aimed to relieve the debt burdens of countries struggling from the pandemic. As a result, developing countries were paying six times more to the World Bank to service their existing debts than they received from the bank in emergency support. There also remain unanswered questions about Malpass’s role in the Doing Business index scandal, where data was manipulated to adjust the rankings of countries, which ultimately led to the report’s discontinuation.
To be sure, the World Bank had a checkered history even before Malpass took the helm, and its challenges run deeper than his leadership. As many leading thinkers have pointed out, it is time for a deep reform of the World Bank and other institutions of global economic governance to make them more representative and fit for tackling 21st-century challenges. As the Prime Minister of Barbados Mia Mottley has noted, the current global order is “simply the embalming of the old colonial order that existed at the time of the establishment of these institutions.”
The bank needs to be delivering much more and better financing for critical climate and development priorities. There are several promising proposals for how to do this, including being more efficient with its existing resources, taking on more risk, and participating in debt relief initiatives.
Such reforms can only happen with a leader who fully appreciates the multiple crises facing the world, and who doesn’t waste time equivocating about climate science and undermining urgent action.