Welcome to the August 2025 round-up of accountability knowledge products. This issue we take a close look at the environmental and social safeguards that are meant to ensure that international financial institutions deliver sustainable development. First up is a new book on safeguards as part of the international framework of laws for accountability. We also feature a policy brief from the UN Human Rights Office on how safeguard policies can help strengthen supply and value chain risk management. Biodiversity offsets, increasingly popular, are then scrutinized by the Global Forest Coalition. Finally, we have a report on fossil fuels by the Banking on Climate Chaos coalition. We hope our selection makes for useful reading for advocates and critics of safeguards!

International Financial Institutions and Sustainable Development

While IFIs are viewed as key to the achievement of sustainable development, their role as lawmakers in relation to accountability within development is less examined. A book from Johanna Lorenzo introduces the theory of environmental and social safeguards in tandem with practice as manifest in the cases taken on by IAMs. Lorenzo provides a history of sustainable development in relation to the Bretton Woods institutions, considers public participation and safeguards systems, explores the role of IFIs as lawmakers, and links such institutional lawmaking with international legal accountability and remedy.

Strengthening Supply and Value Chain Risk Management: The Role of Development Finance Institutions’ Environmental & Social Safeguard Policies

Supply and value chains are increasingly complex and burdened with risks, many to do with poor labor conditions. But while international finance institutions (IFIs) have been active in supporting the growth of supply and value chains, and have developed specialized lines of financing that take account of sustainability concerns and risks, these approaches are not adequately reflected in their own environmental and social safeguard policies, according to the UN Human Rights Office. Many existing safeguards limit the scope of risk management to a restricted group of suppliers, and neglect downstream value chains. These gaps mean that serious human rights issues within deeper layers of upstream supply chains, and in downstream uses or disposal of financed products and services, could be missed. The report notes that these limitations are yet to be tested in complaints to independent accountability mechanisms (IAMs).

The Brief offers a number of recommendations to strengthen and extend the scope of safeguard policies, including aligning them with the UN Guiding Principles on Business and Human Rights. Collboration among IFIs and leverage with clients, rather than control, is suggested as a guide to action.

Biodiversity Offsetting: A corporate social license to perpetuate biodiversity destruction and gender inequality

Biodiversity offsetting, defined by the World Bank as “addi­tional conservation activities intended to com­pensate for the otherwise inevitable damage to species or ecosystems resulting from a develop­ment project” are on the rise—they were even endorsed by the Kunming-Montreal Biodiversity Framework adopted in 2022. However, the Global Forest Coalition, in a report published just prior to the sixteenth Conference of the Parties to the Convention on Biological Diversity (COP16) in Cali, Colombia, in late 2024, views offsetting as a “dangerous illusion” and a “tool for large corporations to greenwash destructive projects while sidelining genuine conservation efforts.”

The Coalition emphatically rejects the market-based model that offsetting represents, and warns that implementation could lead to Indigenous Peoples and local communities being negatively affected both in the project areas for which offsetting is deemed necessary, and in those areas that are being set aside as offsets. Instead, the Coalition recommends that governments and IFIs regulate corporate activity, invest in “genuine strategies that respect ecological integrity and community rights”, and address the root causes of biodiversity loss.   

Banking on Climate Chaos: Fossil Fuel Finance Report 2025

As the mercury rises in the northern hemisphere, few will need reminding that 2024 was the warmest year on record. A report from the Banking on Climate Chaos (BOCC) coalition, part of an annual series, measures the contribution of commercial banks to climate-driven harms. It finds that over two thirds of banks studied are actually backtracking on their commitments by significantly increasing fossil fuel financing, including for exploration. The conclusion here is that if the banking sector does not voluntarily transition away from fossil fuel finance, then policymakers should regulate them to align with the goals of the Paris climate agreement.

We keep our eyes and ears open for news in the field of accountability, but we need your help to make sure we don’t miss anything important. Please write to us about any forthcoming publications at accountability@worldbank.org.