Sven Giegold

European Investment Bank: European Parliament calls for fossil fuel divestment and demands country-by-country reporting for all beneficiaries

Today, the European Parliament by a large majority adopted its ‘annual report on the control of the financial activities of the European Investment Bank (EIB) for 2016’. The Parliament calls on the EIB to withdraw from fossil fuels and to promote even more environmentally friendly and sustainable investment. The report also calls for the termination of financing of projects suspected of corruption and of recipients with aggressive tax avoidance models or branches in tax havens. Furthermore, the Parliament sees room for improvement in the EIB’s internal rules on transparency, conflicts of interest and corruption prevention. The EIB is the EU’s strongest player in financing major projects and provides direct funding and guarantees to governments and private and public companies.

The economic and financial spokesman for the Greens/EFA Group in the European Parliament, Sven Giegold, said:

„This report is a success for more sustainable and transparent public investment. Divestment from fossil fuels and its infrastructure needs to be at the centre of the EIB’s activities. The EIB’s financing activities are an important lever for achieving European climate change objectives and a more sustainable economy.

The Bank should also rapidly implement all relevant EU anti-tax avoidance rules and demand its clients to do the same. The EIB has not to listen to the Parliament and oblige all their beneficiaries to publish country-by-country tax data. Those who profits from public money have to follow highest tax transparency standards. Furthermore, we call on the EIB to disclose beneficial owners of investment projects and to to no longer lend to non-cooperative tax jurisdictions.

Evidently, European institutions should set an example in implementing EU rules. The report therefore calls on the EIB to immediately stop the continued financing of projects suspected of concrete fraud or corruption. This concerns, for example, loans from the EIB to Volkswagen. In any case, traditional loans to large companies lack the required additionality for EIB financing. The EIB needs strong rules against conflicts of interest and strong criteria to prevent corruption in its own authority. The EIB must revise its Code of Conduct in order to make sure that its Vice-Presidents are not in charge of operations in their home Member States.“


Relevant paragraphs of the report:

  1. Calls on the Bank to shed light on EFSI projects which potentially include infrastructure installations with serious environmental impact and dubious additionality, such as biorefineries, steelworks, regasification and gas storage facilities and motorways; calls on the Bank to seriously take into account statements from local authorities, stakeholder communities and civil society groups according to its due diligence procedures; recommends to the EIB, with reference to the precautionary principle, to freeze and, if necessary, withdraw funding wherever there is any scientific proof or serious risk of environmental infringements and damage to society or to local communities;


  1.  Stresses the importance of the goals set by COP21 with regard to transport in combating climate change; expresses its concern that transport represents almost a quarter of Europe’s greenhouse gas (GHG) emissions and is the main cause of air pollution in cities, while emissions in this sector remain higher than in 1990; notes that in the period 2014-2016 the EIB funded fossil energy projects in Member States amounting to a total of EUR 5.3 billion, namely two petroleum projects, one carbon project and 27 gas-related projects, in addition to EUR 976 million through the external guarantee to fund six non-EU projects, one of which concerned carbon and five fossil gas projects; underlines that financing should favour a shift from road transport to more sustainable forms of transport;


  1.  Calls on the EIB to foster the financing of projects in alignment with its climate strategy and the Paris Agreement, phasing out its support for fossil fuels, in order to become a key instrument of the EU in the global joint effort to tackle climate change, and to support sustainable development and the achievement of a more competitive, secure and sustainable energy system in line with the 2030 Energy Strategy; to that end, calls on the EIB to refrain from financing projects involving heavily polluting and outdated technologies, in particular when facilitating investment in the energy sector; calls on the EIB to increase its lending to public infrastructure projects aimed at mitigating the consequences of climate change (e.g. floods) and to small-scale renewable energy projects;


  1.  Calls on the EIB to further reinforce its support to the renewable energy sector, in particular to decentralised and small-scale projects;


  1.   Is deeply concerned that the Bank’s management has so far provided no response whatsoever to the specific provisions of paragraphs 75 and 76 of Parliament’s resolution on the control of the financial activities of the EIB for 2015, and recalls the need to provide for more stringent rules on conflicts of interest and for clear, strict and transparent criteria to prevent any form of corruption; reiterates that the EIB must revise its Code of Conduct in order to make sure that its Vice-Presidents are not in charge of operations in their home Member States, since this poses a risk to the independence of the institution; is deeply concerned at the shortcomings identified in the EIB’s existing mechanisms to prevent possible conflicts of interest within its governing bodies; calls on the EIB, in this regard, in order to better prevent conflicts of interest in its governing bodies and potential ‘revolving door’ issues, to take into consideration the Ombudsman’s recommendations and to revise its Code of Conduct as soon as possible; calls on the EIB to join the interinstitutional agreement on the EU Transparency Register, as soon as the negotiations between the Commission, Parliament and the Council have been concluded;


  1.  Underlines that combating all forms of harmful tax practices should remain an important priority of the EIB; calls on the EIB to swiftly apply the relevant EU legislation and standards on tax avoidance, tax havens and other related issues, and to require its clients to comply with those rules accordingly; expresses its concern at the lack of information disclosed by the EIB on ultimate beneficial ownership, especially where the financing relies on private equity funds; urges the EIB to take proactive measures and carry out increased due diligence measures where EIB projects are found to have links with jurisdictions that raise tax concerns;


  1.  Insists on the need for the EIB to establish a thorough public list of selection criteria for financial intermediaries, so as to step up the EU’s commitment to combating tax abuse and to prevent more effectively the risks of corruption and infiltration by organised crime and terrorism; stresses the need to improve the project evaluation criteria in order to ensure that EU funds are not invested through entities in third countries which do not comply with international tax standards;


  1.  Stresses that standards in the area of tax transparency and tax good governance should be reinforced, in particular as regards the provisions on tax avoidance; notes the adoption at the end of 2017 of the EU list of non-cooperative tax jurisdictions; calls on the EIB, in this regard, to enhance its non-transparent and uncooperative jurisdictions policy (NCJ Policy) in its ongoing review, developing a broader responsible taxation policy; calls on the EIB to demonstrate the feasibility of higher tax transparency standards by adopting a policy that goes beyond minimum legal requirements, with the EIB appointed as a guide in the field of fair taxation; stresses in particular the need to make the allocation of direct and indirect loans conditional on the publication of tax and financial data country by country, and on the sharing of beneficial ownership data for the beneficiaries and financial intermediaries involved in the financing operations, without exemptions;
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