BAKU, Azerbaijan, November 21. It is important to integrate sustainability reporting with financial reporting, said Nancy Saich, Chief Climate Change Expert at the European Investment Bank (EIB), as she addressed a panel discussing the role of independent evaluation in shaping climate finance action at COP29, Trend reports.
She emphasized that sustainability audits have played a key role in refining EIB's climate finance processes.
"We started with reporting on our climate action lending, but now we do green, so it's climate action and environmental sustainability," Saich explained. She pointed out that these audits, conducted either by the EIB's own auditors or the European Court of Auditors, are focused not only on financial flows but also on the impact of projects. "Both audits look at the finance, the methodologies, but also at the results and the impact," she added.
Saich shared that the EIB's sustainability audits revealed areas for improvement. "We learned that we needed to think much more carefully about how we record how we got to the answer," she said, referring to the need for a more robust documentation process. This led to the introduction of a specific annex in which teams are required to explain how they calculated climate finance, which ensures transparency and helps avoid any discrepancies. "Once you tell teams that they have to write it down, they have to think it through and make sure they refer to the right documents," Saich noted, highlighting the value of this improvement.
Another key learning point from the audits was the need for a clear procedure for adjusting climate finance percentages in projects. "When there’s a change later, the auditor said, ‘Who authorizes the change?’ and we didn’t have a procedure for that," Saich added. She emphasized that having a second set of eyes to approve such changes is crucial for maintaining accuracy and transparency in reporting.
The session, themed "Independent Evaluation Perspectives on Climate Finance, Policy, and Programs: How Evidence Can Shape Action", hosted by the Asian Infrastructure Investment Bank (AIIB), delved into the balance between financial support for socio-economic needs and mitigation potential, the transparency of climate finance reporting, and gaps in evidence and evaluation.