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.
A masked worker checks the pigs in a hog pen in Suining in southwest China’s Sichuan province on Friday, Feb. 21, 2020.
(Photo by Feature China/Barcroft Media via Getty Images)
Divya Narain
Dec 14, 2025
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.
A masked worker checks the pigs in a hog pen in Suining in southwest China’s Sichuan province on Friday, Feb. 21, 2020.
(Photo by Feature China/Barcroft Media via Getty Images)
Divya Narain
Dec 14, 2025
Common Dreams
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.
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Divya Narain
Divya Narain is a food systems finance researcher and author of "Unsustainable Investment: International Finance Corporation's Gaps in Addressing Biodiversity Loss, Pollution, and Resource Use in Industrial Livestock Investments.”
Full Bio >
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.
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Divya Narain
Divya Narain is a food systems finance researcher and author of "Unsustainable Investment: International Finance Corporation's Gaps in Addressing Biodiversity Loss, Pollution, and Resource Use in Industrial Livestock Investments.”
Full Bio >
A new report by the UN Environment Assembly has revealed that billions of dollars are missing the international funds required for the 30×30 target, which envisages the protection of at least 30 percent of the world's land and oceans by 2030.
ANF
Thursday, December 11, 2025
A new study published as part of the 7th session of the United Nations Environment Assembly (UNEA) held in Nairobi showed that funding to protect biodiversity worldwide is far from meeting global targets. The 30×30 target set under the Kunming-Montreal Global Biodiversity Framework, which aims to protect at least 30 percent of the world's land and ocean areas by 2030, is at risk due to a serious deficit in international funds.
The report, prepared by Indufor and funded by the Campaign for Nature, Pew Charitable Trusts and the Rainforest Foundation Norway, provides the first comprehensive analysis of international funding flows since the framework adopted by world leaders in 2022. According to the report, international funds aimed at supporting nature conservation activities in developing countries have increased by 150 percent over the past decade to just over $1 billion in 2024, although this increase is still far behind the amount needed to meet the 30×30 target.
Michael Owen, one of the authors of the report, drew attention to the lack of publicly available data on fund flows to protected areas and said, "Transparency among donors is not equal. The data needed to understand how the 30×30 target is doing is scattered and low resolution. The 30×30 Funding Panel we have developed is designed to centralize this data and make the current situation visible."
FUND DEFICIT 4 BILLION DOLLARS
The report states that developed countries are less than $4 billion in annual funding needed for the management and protection of protected areas alone. However, an annual fund of $4 billion is required until 2025 and $6 billion by 2030 just to establish new protected areas, support rangers working in existing areas, and carry out efforts to protect indigenous peoples and local communities.
Brian O'Donnell, Director of the Campaign for Nature, emphasized that especially small island states and ocean ecosystems are severely underfunded, and said, "Marine conservation funding must be urgently increased. Otherwise, it will not be possible to stop extinctions, achieve climate goals and maintain vital services such as clean air, water and storm protection provided by nature."
Anders Haug Larsen from Rainforest Foundation Norway said, "We have a long way to go in both resource mobilization and nature protection. Governments, donors, and local actors — especially Indigenous Peoples and local communities — need to work together. Time is running out," he warned.
AFRICA IS THE REGION THAT RECEIVES THE MOST FUNDING, OCEAN ECOSYSTEMS ARE IMPOVERISHED
According to the data, although international funds have increased since 2014, the distribution is uneven. Africa received 48 percent of all international conservation funds as of 2024, while Small Island States only had access to 4.5 percent of total funds with $48 million annually. This contradicts the SDS's commitment to prioritization underlined in its 19th objective.
In addition, 82 percent of the funds go to strengthening existing protected areas, while the establishment of new areas receives very limited support. Marine ecosystems, on the other hand, make up 71 percent of the planet, but only receive 14 percent of international funding.
FUNDS NEED TO BE RAISED 33 TIMES FASTER
The report states that international protection funds should be increased by at least 33 percent annually in order to achieve the targets set by 2030. However, in the 2020-2024 period, this increase remained at only 11 percent. If the current trajectory continues, international funding will be about $4 billion short of the required funding level in 2030.
On the other hand, financing protected areas accounts for only 20 percent of all biodiversity financing. Despite this, these areas play a decisive role in climate balance, food security, protection of water resources and increasing social resilience against disasters.
URGENT GLOBAL CALL TO ACTION
UNEA delegates stated that the new finance panel is an important tool for strategic planning and made a strong call to governments, multilateral institutions, the private sector and global donors "to turn the commitments made into concrete action".
The report emphasizes that the success of the 30×30 target depends on transferring funds to the right regions, strengthening transparency mechanisms, and supporting Indigenous Peoples and local communities with a rights-based approach.
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