SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
world bank
The $2 Billion Question: Is World Bank’s IFC Enabling Environmental Damage?
The troubling question isn't whether IFC has environmental policies. It does; the question is whether these policies mean anything when clients consistently fail to comply and the public can't verify whether promised improvements ever materialize.
Dec 14, 2025
When the International Finance Corporation, or IFC—the World Bank's private-sector lending arm—invests in developing countries, it promises to uphold rigorous environmental safeguards. But our new analysis of $2 billion in livestock investments reveals an alarming gap between policy and practice that should concern anyone who cares about climate change, biodiversity loss, and environmental accountability.
Between 2020 and 2025, the IFC pumped nearly $2 billion into 38 industrial meat, dairy, and feed projects across developing countries. These investments expanded factory farming operations at a time when scientific consensus highlights the urgency of transitioning away from industrial livestock production to protect both people and planet.
The troubling question isn't whether IFC has environmental policies. It does—robust ones, in fact, that 56 other development banks and 130 financial institutions use as benchmarks. The question is whether these policies mean anything when clients consistently fail to comply and the public can't verify whether promised improvements ever materialize.
The Compliance Crisis
Our latest report, Unsustainable Investment Part 2, analyzed publicly disclosed environmental risk assessment summaries for all 38 projects, evaluating whether IFC clients adhered to the bank's own requirements for managing biodiversity loss, pollution, and resource use. The findings are sobering.
On biodiversity, most projects offered superficial habitat assessments without the detailed analysis needed to identify critical or natural habitats. Not a single project demonstrated deliberate avoidance of high-value ecosystems—the most important step in preventing irreversible damage. Out of 10 projects facing supply-chain risks from habitat conversion, only 2 reported plans to establish traceability and transition away from destructive suppliers. This matters because industrial livestock threatens over 21,000 species and is the primary driver of deforestation globally.
Without transparent, ongoing disclosure, environmental safeguards become little more than paperwork exercises.
For pollution, the gaps were equally stark. Only one project assessed both ambient conditions and cumulative impacts as required. A few projects also reported exceeding national and international standards for air emissions and wastewater discharge at the time of approval. While many promised future improvements, there's no public evidence these promises were kept. Meanwhile, 29 projects provided no reporting whatsoever on solid waste management compliance—a glaring gap in transparency.
On resource use, the patterns continued. Only one project applied the full water use reduction hierarchy, with most reporting no evidence of even attempting to avoid unnecessary water consumption. This inefficiency is staggering: Industrial livestock uses 33-40% of agriculture's water to produce just 18% of the world's calories.
These findings build on our first Unsustainable Investment report examining client adherence to climate change related requirements. The gaps in adherence to disclosure and mitigation requirements were significant—despite IFC's commitment to align 100% of new investments with the Paris Agreement starting June 2026. For disclosure, while 68% of clients disclosed emissions, the reporting was highly inconsistent. Some reported only Scope 1 or Scope 2; others aggregated both scopes when they should have been separated. For mitigation, over 60% of projects failed to reduce emissions intensity below national averages. And zero projects—out of all 38—managed physical climate risks in their supply chains, despite industrial livestock's extreme vulnerability to climate change.
The Transparency Problem
Perhaps the most concerning discovery is what we couldn't find: evidence of what happens after approval.
IFC's Environmental and Social Action Plans outline corrective measures that clients legally commit to implement over time. Many projects included plans to install pollution controls, improve resource efficiency, or enhance biodiversity management. But IFC doesn't systematically report whether these measures were actually implemented or whether they proved effective.
This absence of verification creates a dangerous accountability vacuum. Without transparent, ongoing disclosure, environmental safeguards become little more than paperwork exercises—compliance theater that manages reputational risk rather than environmental impact.
The Systemic Stakes
This matters far beyond IFC's portfolio. As the world's largest development finance institution focused on emerging economies, IFC functions as a standard setter. When IFC finances industrial livestock expansion despite weak compliance with environmental requirements, it sends a signal to global markets that such investments are "sustainable"—even when evidence suggests otherwise.
Consider the context: Industrial livestock contributes up to 20% of global greenhouse gas emissions, occupies 70% of agricultural land, and drives the planetary boundary transgressions that scientists warn threaten Earth's capacity to support human civilization. The World Bank's own 2024 report, Recipe for a Livable Planet, acknowledges that "to protect our planet, we need to transform the way we produce and consume food."
Yet IFC continues to invest billions in expanding the very systems the World Bank identifies as unsustainable. Civil society organizations have repeatedly documented environmental and social harms from IFC-financed factory farms in Ecuador, Brazil, China, and Mongolia—harm that occurs despite IFC's safeguards being applied.
A Path Forward
This isn't an argument against development finance. It's a call for development finance that actually delivers sustainable development.
IFC must fundamentally reassess whether industrial livestock expansion is compatible with its mission. The institution should redirect financing toward food production systems that are demonstrably sustainable—agroecological approaches, diversified farming systems, and plant-based proteins that can deliver food security without exacerbating environmental crises.
Equally urgent: IFC must mandate full, transparent disclosure of environmental compliance throughout project lifecycles—not just at approval. Independent verification and meaningful consequences for non-compliance must replace the current honor system. Without enforcement, the world's most influential environmental safeguards are effectively optional.
Billions in public development finance continue flowing to industrial operations that drive climate change, biodiversity collapse, pollution, and resource depletion.
The stakes extend beyond any single institution. With IFC's president announcing plans to double annual agribusiness investments to $9 billion by 2030, and the Paris Agreement alignment deadline now extended to June 2026, the window for course correction is rapidly closing.
As 130 financial institutions benchmark their own environmental standards against IFC's Performance Standards, the compliance failures we've documented likely exist throughout the development finance sector. Systemic problems require systemic solutions.
The Bottom Line
The evidence is clear: IFC's environmental safeguards are robust on paper but weakened by inconsistent client adherence, limited transparency, and absent enforcement. The current approach manages compliance risk rather than environmental impact—a fundamental misalignment with both IFC's stated mission and the urgent imperatives of our environmental moment.
Seven of nine planetary boundaries have already been breached. The Earth system is under unprecedented stress. Yet billions in public development finance continue flowing to industrial operations that drive climate change, biodiversity collapse, pollution, and resource depletion.
The question isn't whether IFC can afford to change course. It's whether we can afford for it not to.
Keep ReadingShow Less
How Public Finance for Agriculture Can Improve Food Security, Health, and Climate
By supporting agroecology, multilateral development banks can stop fueling harm and start financing a just and sustainable food systems transition.
Dec 03, 2025
Agriculture is essential to human life. How we feed ourselves matters for nutrition, health, climate, biodiversity, and livelihoods. Nearly 928 million people are employed in farming globally, and food systems are responsible for one-third of global greenhouse gas emissions and most new deforestation.
Multilateral development banks (MDBs), like the World Bank Group (WBG), play a critical role. The WBG has committed to double its agricultural financing to $9 billion a year by 2030. In October it launched AgriConnect, an initiative seeking to transform small-scale farming into an engine of sustainable growth, jobs, and food security.
However, while some MDB investments support equitable and sustainable transformation, too many still fuel environmental destruction and inequity. The World Bank’s private sector arm, IFC, recently invested $47 million in a multi-story pig factory farm in China, for example.
A new report from the University of Vermont Institute for Agroecology analyses MDB agricultural investments and sets out a road map for how banks can support, rather than hinder, sustainable farming. The research finds that the World Bank and other public-sector lenders can drive systemic change by supporting governments with policy reforms, rural extension services, and enabling environments. For example, a $70 million Inter-American Development Bank project in Paraíba, Brazil is promoting inclusive, low-carbon agriculture, and strengthening family farmers and traditional communities through technical assistance and climate-resilient infrastructure.
MDBs’ private sector operations must reform their lending criteria and stop financing destructive projects.
MDBs are better placed than other financial institutions to take long-term, lower-return investments aligned with climate and food security goals. Agroecological farming, a holistic, community-based approach to food systems that applies ecological and social food sovereignty concepts, along with long-term productivity, provides a channel for public sector arms of MDBs to support needed agricultural transformation. MDBs and other public banks therefore, should seek to become the enablers of agroecology. The International Fund for Agricultural Development (IFAD) and the Agence Française de Développement (AFD) are already leading efforts in this direction.
MDB Private Sector Operations: Profit-Driven Harms
In contrast to the IFAD and AFD models, the University of Vermont's Institute for Agroecology’s report found that the majority of private-focused MDBs prioritize “bankable” projects—typically large-scale, industrial, profit-driven agribusiness. This model steers money toward factory farms that use human-edible food as feed, pollute nearby communities, raise the risks of zoonotic disease and antimicrobial resistance, and engage in animal cruelty. In 2023, a report by Stop Financing Factory Farming found that public finance institutions invested US$2.27 billion in factory farming, 68% of the total investment in animal agriculture projects that year.
As evidenced by multiple complaints from impacted communities, these investments undermine poverty reduction, Sustainable Development Goals (SDGs), and Paris Agreement climate goals. MDBs’ private sector operations must reform their lending criteria and stop financing destructive projects.
The opportunity: Public Sector Banks Can Pave the Way for Private-Sector Transformation
Rich country governments currently subsidize agriculture, mostly industrial, at a level of $842 billion per year. According to the IMF, only a quarter is dedicated to support for public goods in the sector. Shifting this support to incentivize investments in agroecology is crucial to sustain the agricultural transformation that public banks themselves have called for.
Public banks have the opportunity to join a growing number of organisations already advancing an ecological approach to meet the SDGs and wider social, cultural, and economic, and environmental objectives. To do so, they must shift from treating agroecology as merely a niche solution and instead invest in it as a priority means for achieving food systems transformation.
Agroecology puts an end to costly and harmful practices, replacing animal cruelty with humane, safe, and fair standards.
By taking this approach, public banks can better support just transitions in food systems, something that is already beginning to take shape. Earlier this year, for example, the World Bank backed an $800 million loan to the Colombian government to advance a greener and more resilient economic transformation.
The private-sector arms of MDBs, such as IFC and IDB Invest, also have a role to play in aligning with the transition. Most importantly, they can support governments with policy advice and financing criteria that break from entrenched models and exclude industrial animal agriculture from eligibility for finance.
While MDBs have taken steps to make agricultural production and rural incomes less vulnerable to climate change, they have yet to commit to agroecological farming as the most effective pathway. In contrast, IFAD is already demonstrating what this can look like, driving agroecological transitions through private-sector incentives in Ethiopia, Peru, and Vietnam. Similarly, AFD is applying agroecology to support family farming in Ethiopia, Haiti, Madagascar, Malawi, and Sierra Leone.
Agroecology as the Future of Sustainable Farming—and Public Agricultural Finance?
If MDBs are looking to advance the SDGs and solve the polycrisis (climate, biodiversity, pandemic risk, and food security), one of the most effective ways in which this can be done is for the public sector to mobilize policy support and significant capital investment into agroecology. Meanwhile, MDB private sector arms can enable this transition by providing policy advice and finance for interventions that break from entrenched models.
Agroecology puts an end to costly and harmful practices, replacing animal cruelty with humane, safe, and fair standards. But it's not just about farming practices. It also helps transform food systems, building resilient, reparative, low-emission economies and improves livelihoods in line with the 2030 SDGs.
By supporting agroecology, MDBs can stop fueling harm and start financing a just and sustainable food systems transition. If they are serious about the SDGs, food security, and climate goals, the road map is clear—MDBs’ public sector operations must enable, their private sector operations must reform, and both must support a transition away from industrial agriculture toward a more just and sustainable food system.
Keep ReadingShow Less
Development Banks’ Factory Farm Investments Harm the Climate and Local Communities
Despite clear evidence of the harms of industrial livestock, new research showed that in 2024, 11 leading international finance institutions invested $1.23 billion in factory farming and wider industrial animal agriculture supply chains.
Jul 06, 2025
The World Bank’s mission is to “create a world free of poverty on a livable planet.” However, the institution, along with its peer development partners, pumps billions of dollars into factory farming, appearing to turn a blind eye to the significant harm it causes.
We cannot meet the 1.5°C Paris agreement goal without reducing emissions from livestock. Animal agriculture is a leading cause of climate breakdown; already responsible for around 16% of global greenhouse gas emissions and set to rise.
Factory farming is also tearing apart our thriving ecosystems. In Latin America, high demand for industrial grazing pasture and land for growing animal feed has fueled devastating deforestation: 84% of all Latin America’s forest loss in the last 50 years can be attributed to land claimed for livestock farming. Factory farming also pollutes soils and freshwater sources that wild animals and rural communities rely on.
Development banks tasked with tackling poverty and climate change owe it to current and future generations to use their investments to help spur the transition toward more sustainable diets and forms of food production.
Yet despite clear evidence of the harms of industrial livestock, new research I conducted for the Stop Financing Factory Farming Coalition (S3F), based on data from the Early Warning System, showed that in 2024, 11 leading international finance institutions (IFI) invested $1.23 billion in factory farming and wider industrial animal agriculture supply chains. This is five times more than what they spend on more sustainable non-industrial animal agriculture projects. The World Bank and its private sector arm, the International Finance Corporation (IFC), were together responsible for over half the funding for industrial animal agriculture.
One of the investments IFC made last year was a $40 million loan to build a soybean crushing plant in Bangladesh, used to mass-produce animal feed. The soybeans will require an estimated 354,000 hectares of land annually to be grown, and will be sourced from Brazil and Argentina where soy production is associated with destruction of sensitive ecosystems. Communities living near the plant have documented the existing and potential impacts such as the contamination of coastal waters and freshwater sources, which would consequently lead to a reduction in the local fish stocks that local communities rely on to guarantee their livelihoods, and brought their concerns in front of representatives of the U.S. government.
Over the last 20 years, IFC has also made a number of investments in Pronaca, the largest food producer in Ecuador, to expand its factory farm operations. The company has built pig and poultry farms in Santo Domingo de los Tsáchilas, a region home to natural forest and Indigenous Peoples. Local Indigenous communities documented how the farms have polluted water resources that are traditionally used to sustain their livelihoods, forcing community members to migrate to preserve their traditional cultures.
Other IFIs have also made harmful investments. The European Bank for Reconstruction and Development (EBRD) boldly claims all its investments have been Paris-aligned since January 2023; however, recent spending to expand multinational fast food chains in Eastern Europe seem to show a different scenario. During the first half of 2025, the EBRD has provided $10 million for the expansion of KFC and Taco Bell restaurants in the Western Balkans, and proposed an equity investment of $46 million for the expansion of Burger King and Louisiana Popeyes in Poland, Romania, and Czech Republic.
The latter investment would have led to the opening of 600 restaurants in the region, with large adverse impacts in terms of public health and emissions of greenhouse gases. Restaurant Brands International, which owns Burger King and Popeyes, reported approximately 29 million metric tons of carbon dioxide-equivalent emissions along its value chain in 2024, more than the entire emissions of Northern Ireland. Thankfully, following civil society pressure, the investment was not approved by the EBRD’s Board of Directors.
While the overall picture is bleak, there is real room for hope. Between 2023 and 2024, IFI investments in factory farming nearly halved, and investments in more sustainable approaches tripled, from $77 million to US$244 million. Examples of promising investments include the Multilateral Investment Guarantee Agency and the Inter-American Development Bank providing support to smallholder farmers using climate-friendly techniques.
This is clearly good news; however, it remains too early to tell if these figures are a one-off blip, or part of a longer-term trend. My hope is that the next round of investment data will show that harmful investments have dropped further—if not stopped completely—and more sustainable ones additionally increased.
Development banks tasked with tackling poverty and climate change owe it to current and future generations to use their investments to help spur the transition toward more sustainable diets and forms of food production, rather than replicating and expanding the broken systems that are wrecking our planet. By only investing in animal agriculture projects that are sustainable—following agroecological principles such as promoting species diversity and using nature’s resources efficiently—banks can help move us closer toward “a world free of poverty on a livable planet.”
Keep ReadingShow Less
Most Popular