- 19.12.2025
In a year marked by geopolitical shifts, a deepening debt crisis and ecological distress, we’ve seen climate commitments at international financial institutions (IFIs) come under heavy fire and continued delays to justice for communities affected by IFI activities. Civil society organising and action is more important than ever.
IFIs have huge influence
What IFIs say and do matters. The decisions made in Board rooms and negotiating halls have profound implications for people all over the world. This year, we’ve seen some backsliding on IFI commitments to tackle climate change, address gender inequality, and uphold peoples’ rights. Despite multilateralism being under threat, however, IFIs are still critical actors for mobilising public finance to developing countries.
Demand for multilateral development bank (MDB) financing is rising as aid budgets shrink and private creditors reduce lending to countries deemed too ‘risky’. Straddled with debt, developing countries are increasingly turning to these public banks for the money they need to adapt to climate impacts and meet sustainable development goals. The IMF’s ‘blessing’ is a precursor for getting that cash. At the COP30 climate summit, MDBs kept hold of their climate finance delivery role, while the G20 called for a tripling of MDB lending power alongside IMF quota and governance reforms.
Progress towards a just transition
This year, the roles of Recourse and our allies went from watchdogs to guarddogs of IFI commitments, urging the institutions to not give in to pressure from governments trying to reverse progress in climate action.
Although there was some backsliding — the World Bank (WB) and the ADB lifted longstanding bans on nuclear energy, despite evidence of the risks — we have also seen blocs banding together in defence of climate action. In October, the majority of World Bank shareholders publicly affirmed support for continued climate work. Large country groupings at the Financing for Development conference in July and at the G20 in November adopted joint positions in spite of the climate-deniers.
That said, the gap between discourse, action and justice has been widening. Our examination of IMF surveillance since its 2021 Climate Strategy (in which it agreed to work on ‘macro-critical’ topics like climate, gender and inequality) showed slow progress. The ADB and WB started claiming to be ‘technology neutral’ while ramping up efforts to warp the narrative, labelling high-risk, large-scale, export-only energy projects as ‘clean’. MDBs called fossil funding ‘climate finance’, renewed efforts to frame fossil gas as a ‘transition fuel’, and framed ‘de-risking’ private investments as the only way to “face the future”.
Meanwhile, climate impacts are hitting far and wide, and the need for public finance to play a more convincing role in a just transition to sustainable, renewable economies, for all countries and all sectors of society, has never been more urgent. We saw a victory at COP30, where the decision to develop a just transition mechanism marked the start of a crucial conversation about who finances this transition and who benefits from it.
Systemic economic reform is crucial
Despite ambition, countries cannot act on climate within a system of debt, tax and trade governance that is stacked against them. Many countries find themselves trapped in cycles of debt and dependency — and the IFIs are part of the problem. The IMF still advises exploitation of fossil fuels to generate foreign capital to pay back debts. At the same time, many countries, like Argentina, are extraction sites for Northern countries or companies, looking to exploit the new frontier of ‘critical’ minerals or carbon markets.
This Jubilee year held promise for debt relief, backed by many African countries and a huge civil society movement. But the optimism has faded. The G20 Common Framework launched in 2020 to facilitate debt relief has been slow and opaque. Demands for a sovereign debt workout mechanism and a UN Tax Convention to end illicit financial flows were blocked by wealthy nations (notably the EU and UK) at the Financing for Development conferenceback in July.
Without urgent systemic reforms, up to 47 Global South countries, home to over 1.1 billion people, face insolvency risks within five years if they attempt to meet climate and development goals. Grant-based public finance is one area where MDBs still need to step up. Between 2022–2024, only 3.8% of ADB energy dollars were grants, with only 10% at the World Bank and 20%at the AfDB.
Closing the accountability gap
As public institutions, IFIs and their shareholders are accountable to citizens, and especially to those impacted by the finance they provide. Without considering local people’s rights or needs, ongoing initiatives like Mission 300 in Africa, or the anticipated expansion of transition mineral mining, risk repeating the harms of the fossil fuel era.
Only 15 % of the 2270 complaints filed to MDB accountability mechanisms since 1994 resulted in any identifiable commitment to remedy. For every 10 grievances lodged, only 1 ended with a concrete remedy.
The accountability gap isn’t just statistical, it has tangible impacts on people’s lives. Coal-affected communities in the Philippines are still waiting for remedy from the IFC, eight years after filing the complaint, and three years into agreed action plans. In India, the toxic Tata Mundra coal plant backed by the ADB and IFC has left a legacy of suffering, but its Ombudsman recently closed the case after 14 years with no remedy given.
We nevertheless saw some important progress this year — for example, the IFC finally introduced a long-awaited approach to remedial action, the first policy of its kind at IFIs. Furthermore, Recourse has supported the convening of hundreds of CSOs who are now engaging with the IFC’s social and environmental safeguards review. Importantly, thanks to sustained advocacy, the IFC has also agreed to engage with Indigenous Peoples as an autonomous, self-organised group.
Reviews and reform processes present opportunities for improvement but also risks, making civil society’s watchdog role so crucial. The AIIB accountability mechanism review this year did little to remove existing blocks to accessing justice, for example. Now, all eyes are on the ADB as it finalises the review of its mechanism in 2026. We’re also watching the World Bank Group, which is considering a merger of its accountability frameworks and has introduced a “mutual reliance” co-financing framework with the ADB.
Strength in solidarity
Our commitment to stand with those affected by IFI practices is unwavering — it is only by working together that we can make change.
Evidence shows that community complaints that have the backing of civil society organisations (like Recourse) are nearly three times as likely to result in remedial commitments. There are some examples of success from this year: In India, the ADB withdrew a loan for the Assam solar power project on Indigenous lands, and the IFC will not pushthrough with its investment in waste-to-energy projects, after resistance from local communities and international groups.
At the global level, different civil society groups organising together was the winning factor behind the COP30 just transition decision. At the same time, another channel for holding MDBs accountable revealed itself, with an Expert Opinion revealing real litigation exposure for IFIs and their shareholders that fail to act on climate change.
As 2025 comes to a close, Recourse remains convinced that hope lies in solidarity, collaboration and partnerships. For civil society, ‘facing the future’ does not mean accepting the unjust structure that governs IFIs and the global financial system. It means advocating together to put people and the planet at their very heart.
This article was originally published on LinkedIn.
Banner photo: Just Transition picket-nic during the 64th Sessions of the Subsidiary Bodies (SB64), held from 8–18 June 2026 in Bonn. Photo credit: Dylan Kava for Climate Action Network.
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