Publish What You Fund on Nov. 3 issued a DFI Transparency Tool listing 52 categories for the evaluation of transparency at development finance institutions (DFIs).
The nongovernmental organization plans to use the tool next year in “a pilot assessment” to measure transparency at “leading DFIs.”
The tool is the result of a two-year “collaborative” project in which PWYF involved stakeholders from the DFIs and from nongovernmental organizations. The UK-based group preparing a series of five reports, based on preliminary surveys, that have been critical about DFI transparency.
“The current lack of DFI transparency makes it difficult to see what DFIs are doing, what impact their investments are making, whether they are adhering to their accountability and environmental, social, and governance (ESG) responsibilities, and to what extent they are successfully crowding in the private sector,” states the introduction to the new tool.
As it has surveyed DFIs while developing its methodology, PWYF has not revealed the scores of those it evaluated, but scores will be revealed in the future. The project has focused on about 20 DFIs, both multilateral ones, like the World Bank, and national ones like Sweden’s Swedfund.
The tool identifies 52 “issue” areas, providing survey questions (sometimes more than one), with buttressing definitions.
For example, Issue 43 is “instrument-specific disclosure” with three sub-questions including: “Share of equity: does the DFI disclose what percentage of the client company was purchased through the investment?”
A “Steps Going Forward” section indicates that yet to come is development of “a methodology for our assessment over the first months of 2022.” The report says: “The methodology will establish a project sampling method, a weighting of indicator scores, and a framework for the selection of DFIs to be included in our pilot assessment. We will conduct another phase of public consultations to present and refine our methodological approach.”
PWYF says is has yet to choose the DFIs to be evaluated in the pilot and outlines a two-step approach. “The first phase will be a confidential preliminary analysis allowing further engagement with the relevant DFI on areas for potential improvement,” it states. “The second phase will be analysed for our pilot assessment report. The full detail of how the collection and analysis will work will be determined during the methodology development phase,” according to the report accompanying the announcement of the tool.
See Nov. 3 webinar at which the tool is discussed.
