The Philippines: Holding IFC accountable for its climate commitments

The complaint accused IFC of supporting 19 new or expanded coal-fired power plants in the Philippines through its investments in Rizal Commercial Banking Corporation. After receiving $228 million in IFC funding and the World Bank’s stamp of approval, Rizal went on to provide or arrange billions of dollars in financing for the power plants and the companies developing them, in violation of the IFC’s social and environmental Performance Standards and climate commitments. 

The complaint argued that Rizal bank’s extensive financing of the coal sector should have warranted a cumulative impact assessment of its contribution to climate change.  With its large stake in the Philippine bank and seat on its board of directors, IFC should have been cognizant of the bank’s deep exposure to the coal sector and insisted on a cumulative impact assessment, including the identification and assessment of alternatives. It argued that IFC should have used its considerable leverage to reduce Rizal’s coal exposure and instead increase its support to renewable and low carbon energy generation projects. 

The complainants called on IFC to use its leverage to stop the coal projects that have not yet commenced operation, and to ensure that its financial intermediaries in the Philippines and around the world stop financing coal projects and instead fund renewable energy solutions. 

The CAO found the complaint eligible (in relation to 11 of the 19 plants it addressed) and, after determining that the complainants and the plants’ developers could not come to an agreement to enter into a dispute resolution process, transferred the case to CAO’s compliance function, which determined that the “substantial concerns” raised warranted a full investigation. 

The compliance investigation report found that IFC had failed to ensure that RCBC applied its environmental and social Performance Standards to the financing of the plants. The CAO concluded that this failure very likely caused grave harm to surrounding communities, including serious impacts on livelihoods, health and well-being due to air and water pollution and physical and economic displacement, among other harms. In its report, the CAO also notes that, once operational, the plants will produce approximately 40 million tons of CO2 annually – equivalent to roughly 30 percent of the Philippines’ annual emissions in 2019. 

This was the first investigation undertaken by the CAO to specifically examine IFC’s contribution to climate change and to determine that its failure to stop an equity client from financing new coal-fired power plants violated its environmental and social policies and climate commitments. 

The CAO recommended that IFC take steps to ensure instances of harm raised by affected communities are assessed and remediated, consistent with the requirements of the IFC Performance Standards, and that IFC contribute to remedial solutions as appropriate. The CAO also recommended that IFC evaluate and mitigate the climate impacts of the coal plants and institute systemic reforms to ensure it does not contribute to similar harms in the future. 

In April 2022, IFC’s board of directors approved a Management Action Plan that goes part way toward addressing the CAO’s recommendations. In response to requests from the Complainants and the U.S. representative to IFC’s board, who were concerned that the plan overly relied on the cooperation of the coal companies to provide redress, IFC agreed to return to the board within 9 months to provide a progress update and make adjustments to the plan if needed. 

In its statement responding to IFC’s Management Action Plan, the U.S. also articulated several key positions with respect to IFC’s broader approach to remedy. These included underscoring the need for the approach to recognize that the costs of poor implementation by IFC or its clients should not fall on the affected people, and the need for IFC to increase its leverage, including through contractual provisions to enable remedy and in relation to its financial intermediary investments, which make up half of its portfolio. The U.S. also expressed an expectation that IFC implement a process to guide its financial intermediary clients toward adopting commitments to align their operations with the goals of the Paris Agreement. The statement was endorsed by 11 other constituencies of the World Bank Group. 

IFC’s Management Action Plan committed to “assess” and “mitigate” the non-compliance-related impacts of the 10 coal subprojects (one of the projects did not move forward).  IFC retained a third-party firm, Environmental Resources Management (ERM), to undertake these studies and make recommendations to bring these projects into compliance with the Performance Standards.  Inclusive Development International and our partners engaged deeply with ERM in this process, including facilitating access to the affected communities and reviewing and commenting on drafts of the reports.   

But to our shock and dismay, IFC refused to disclose the final assessment reports, citing client confidentiality agreements and unspecified data privacy laws.  And in January 2025, IFC published a progress report indicating that RCBC disagreed with the findings and recommendations of the gap analysis reports, and as a result it had no plans to take further action to address them.  The CAO also published its own monitoring report on the implementation of IFC’s Management Action Plan, noting that “IFC has made significant efforts to assess the E&S [environmental & social] risks and impacts of the 10 power plants. However, the risks and impacts to communities and the environment identified have not been mitigated, despite IFC’s E&S consultant making 186 recommendations to improve power plant E&S performance and/or address underlying complaint issues.”  

Inclusive Development International submitted a request for disclosure of the final gap analysis reports under IFC’s Access to Information policy, along with a series of appeals after the initial requests were denied.  This is included a final appeal to the Access to Information Appeals Panel (AIP Panel).  On March 16, 2026, the Appeal Panel upheld IFC’s denial of the disclosure request, again citing confidentiality agreements between IFC, RCBC and ERM, which trumped IFC’s Access to Information Policy.   

In a further development, IFC divested its equity stake in RCBC at the end of 2025. Our research found that IFC earned over $46 million in dividends and capital gains on this investment, which has left coal impacted communities impoverished.  

Despite these setbacks, Inclusive Development International has continued to demand, alongside the Philippine Movement for Climate Justice and Recourse, that IFC contribute to the remediation of the harms that resulted from the due diligence failures surrounding its investments in RCBC.  We are calling on the IFC to join forces with the International Bank for Reconstruction and Development, the public sector arm of the World Bank Group, and work directly with the coal plant owners and the Philippines government to support the farming, fishing and Indigenous communities affected by these coal plants through targeted pollution prevention, public health and livelihood restoration initiatives.  

Additionally, while the IFC was conducting their assessment of harms, Inclusive Development International, PMCJ, Recourse, and BankTrack filed a complaint to the UK National Contact Point (NCP) for Responsible Business Conduct against Standard Chartered Bank, which provided financing for four of the coal plants, alleging that the Bank failed to meet its responsibilities under the OECD Guidelines for Multinational Enterprises by co-financing the power plants. The NCP complaint, building off the investigation behind the 2017 CAO complaint, asserted that Standard Chartered failed to conduct effective due diligence and contributed to human rights violations and a range of adverse environmental and social impacts, and it argued that the bank now has a responsibility to help remediate the harms that the communities suffered,  by 1) using its leverage with the coal companies it financed—and in some cases continues to finance—to implement the remedial recommendations that arose from CAO investigation process and 2) contributing directly to remedial actions and mitigation measures where it can.  

In September 2025, the complaint was accepted, meaning that the UK NCP acknowledged that the allegations merited further examination and that it will offer voluntary mediation to both parties. If either party declines, it will then conduct a further examination of the complaint to determine whether the company acted consistently with the OECD Guidelines.