Bankers Urge Transparency in Climate Financing, Cite Data Hurdle

As global pressure mounts on the finance industry to combat the climate crisis in developing nations, a significant hurdle emerges—the lack of accessible data. Bank executives, including those from Citigroup Inc., highlight a critical challenge: obtaining access to the Global Emerging Markets Risk Database (GEMs), which holds three decades of loan performance and default data from multilateral development banks.
Commercial bankers argue that sharing this $1.5 trillion worth of emerging market debt data could pave the way for better rates and increased access to debt-stressed countries. The GEMs data could enable them to base risk calculations on historical records, potentially lowering lending costs and facilitating financing in areas and projects currently deemed too risky.

Despite promises to make the data available, the World Bank Group’s International Finance Corp., the European Investment Bank, and other multilateral development banks limit access to their 24-member consortium. The refusal to share GEMs data has sparked frustration among bankers, who believe it impedes their ability to contribute significantly to climate finance in vulnerable nations.

The debate over the role of international development banks in climate efforts intensifies, with commercial banks urging more focus on genuine financial additionality in vulnerable jurisdictions. The EIB and IFC assert their commitment to sectors underserved by the market but recognize the need for improved collaboration.

World Bank President Ajay Banga, aiming to enhance collaboration with the private sector, plans to grant access to GEMs data in the coming months. Citigroup anticipates this move as a crucial step forward, emphasizing the need for institutions to compromise their existing business models for meaningful reforms and commitment to addressing the climate crisis in developing regions.