As John Kerry promises to “make good” on a $2 billion pledge to the GCF, the UN’s flagship fund faces critically low confidence in its senior management
John Kerry is promising the US will “make good” on its contribution to the Green Climate Fund.
The presidential climate envoy is seeking to rebuild bridges with the rest of the world after Donald Trump reneged on US climate commitments.
Delivering a $2 billion outstanding pledge to the UN-backed climate fund, for distribution to projects in developing countries, is widely seen as a good place to start.
Campaigners are calling on the Biden administration to commit a further $6bn to the fund. Yannick Glemarec, executive director of the fund, says US reengagement “will send an extraordinarily positive signal” and allow it to accelerate support for the green recovery from the coronavirus pandemic.
But the latest staff survey results, presented internally last month and seen by Climate Home News, show faith in the fund’s leadership is at rock bottom. Views of the senior management team were 24% favourable, 40% unfavourable.
Unless there is urgent reform, whistleblowers tell Climate Home News, the money would be better directed elsewhere.
Three employees of the GCF secretariat who quit in 2019 and 2020 cite concerns about a lack of integrity in vetting projects and abuses of power creating a hostile working environment. This, they say, affects the quality of projects on the ground.
“Sincerely, I don’t think that the GCF, the way it is managed today, is a good channel for climate finance,” says Pierre-Daniel Telep, a German national with Cameroonian heritage who worked on renewable energy projects at the fund for two and a half years.
“We don’t believe the GCF will ever be able to meet its mandate,” says Mary, a climate finance specialist from a developing country.
“There was inappropriate pressure to approve projects which could harm people,” says James, a technical specialist from a developed country.
Mary and James are not their real names. Both asked not to be named as they still work in the sector and fear it could harm their careers to speak on the record.
Climate news in your inbox? Sign up here
For James, the main concern was political interference in the quality control process. Often the work was rewarding, he says, but “the moment you had a difficult project, you were on your own – you had no support from senior management”.
Some of the most problematic bids came from countries hosting GCF board meetings and expecting to secure multi-million-dollar investments in return.
Bahrain put in a bid for $32 million ahead of hosting one such meeting in October 2018. Despite oil export wealth putting it in the World Bank’s “high income” bracket, it is classed as a developing country under the UN climate convention – and therefore eligible for international climate finance.
On the basis that climate change was driving water scarcity in the kingdom, Manama – backed by the UN Environment Programme – was seeking support to develop an “unconventional” alternative source: clean up water produced when pumping oil out of the ground and inject it into the country’s only freshwater aquifer.
Experts were appalled. It was, James says, “a shameless attempt to get GCF to subsidise the oil and gas industry, by dumping all their contaminants – including mercury, heavy metals and radioactive material – into the drinking water source”.
The climate rationale for the project was “weak”, according to an independent technical advisory panel. Water stress in Bahrain had more to do with wasteful consumption than climate change – although that was a factor.
Yet the project had an influential backer in Saudi board member Ayman Shasly, a veteran climate negotiator who previously worked for the oil company Saudi Aramco. James claims Shasly made calls to the director responsible for overseeing the technical assessment, putting pressure on him to wave the bid through.
Shasly did not respond to emailed requests for comment.
“You owe this money to developing countries,” fumed Shasly at the board meeting. “Developed countries unfortunately are taking a hard line, making our lives miserable to approve peanuts, crumbs, small amounts of funding proposals.”
Ultimately, Bahrain was awarded $2.3m – 7% of the original ask – for a relatively benign programme of “knowledge management”, after pushback from technical experts and other board members. But the project document maintains this will pave the way for recycling oil wastewater as “phase 2”.
It was “a very stressful and unpleasant experience,” says James, that contributed to his decision to leave the fund.
It is not just board members from developing countries who interfere, says Mary. “Both sides do it…
“The difficulty we have in the GCF is: because the policies of the GCF were not completed when the GCF started its operations, it created this situation where it was not always very clear what should be the remit of the board and what should be the responsibility of the secretariat.”
Glemarec took up the leadership role in April 2019 and insists everything now goes through proper channels. “Today you will be hard pressed to do something like that,” he tells Climate Home News by video call, when asked about political interference.
The GCF approved its first projects in 2016. Its governance structure is unique in that an equal number of board members are drawn from developed and developing countries, with all geographies represented. The intention was to empower beneficiaries to direct the funds where they were most needed.
In practice, it makes for tense board meetings, replicating the dynamics of UN climate negotiations. “We are getting tantalisingly close, colleagues, as indeed we were two hours ago,” Canadian co-chair Susanne Szabo was saying wearily when Climate Home News tuned into the webcast of November’s meeting. They would take another hour to agree the text of a strategic plan for 2020-23 – almost a year into that period.
This structure has not led to radically different outcomes to donor-led funds, in the view of Zaheer Fakir, a former board member from South Africa. “If you look at what the GCF is doing, it is no different to what the [Global Environment Facility] is doing or any [multilateral development bank] is doing,” he tells Climate Home News. “We have not really cracked uniqueness.”
Throughout the early years, the buzzword was to “get money out the door”, while policies and processes were still under development. To this day, there is no ban on the GCF subsidising fossil fuels – a rule that could have prevented the Bahrain debacle.
The GCF estimates over its lifetime, the current portfolio will avert 1.2 billion tonnes of CO2 – equivalent to the annual emissions of Japan – and make 400 million people more resilient to the climate crisis.
“I am sceptical of the impact of the overall portfolio,” says Mary. “It is just not credible.”
Internal auditors are about half way through a review of the portfolio’s emissions impact and expected to report by the end of the year, says Glemarec. So far, he admits, the numbers they are coming up with are “more conservative” than initially advertised. Next, they will audit the number of beneficiaries.
Then there are concerns about the workplace culture.
In August 2020, the Financial Times reported on a wave of misconduct allegations at the fund. It cited the Re-Green Initiative – a network claiming to represent staff – and interviews with 17 current and former employees who remained anonymous.
Complaints to the fund’s Independent Integrity Unit (IIU) nearly doubled to 40 in 2019, with 24 categorised as staff misconduct. Subsequent analysis by the IIU found that while the overall complaint rate was within range of similar institutions, the rate of misconduct allegations was significantly higher: 7.5 per 100 staff, compared to 1.8 at the World Bank and 2.8 at the Asian Development Bank.
On 30 August, after publication of the FT investigation, the Re-Green Initiative wrote to the fund’s head Glemarec and board members. In the email, seen by Climate Home News, they blamed a “toxic working environment” for an exodus of staff.
Telep, the former GCF employee, got into a series of disputes with management during and after his time at the fund, with allegations of misconduct going both ways. Like many employees, Telep uprooted his family to work at the headquarters in Songdo, South Korea. He was repeatedly threatened with failing his probation period and not confirmed in the role for 15 months.
As an example of the atmosphere, he recalls a senior colleague claimed to keep a gun in the office and joked about using it against another member of staff. “It was not really a professional working environment,” says Telep. “It was a difficult time.”
It was worse for women in junior positions, he says. He describes seeing a colleague reduced to tears by mistreatment, who said she did not have the confidence in the system to raise a grievance. “People in really fragile situations are really being abused,” he tells Climate Home News.
Several colleagues left around the same time as Telep in mid-2020, he says, adding: “The change that we really wanted to bring, that was necessary in the organisation, was not coming.”
Telep raised two complaints to the IIU, in June 2018 and December 2019, concerning abuses of power by senior staff, a hostile work environment, conflicts of interest and project integrity. A GCF spokesperson said the first was investigated and closed as unsubstantiated in April 2020, while the second was the subject of an ongoing investigation. Telep says he was not informed of the outcome of the closed investigation, contrary to the GCF’s stated policy of notifying known complainants by email.
This week, Telep was told by the IIU that he faced disciplinary action in respect of a complaint lodged against him in January 2020 – by the subject of his earlier allegations. The main finding was that he had accepted travel sponsorship from another organisation to attend Cop25 climate talks, amounting to a conflict of interest.
Telep admits to accepting the sponsorship but disputes the way it was characterised, saying it was common practice for partner organisations to cover travel expenses of GCF staff. He sees the investigation as retaliation for his earlier complaints. “They are trying to discredit me,” he says. “I think it is necessary to speak out to solve the problems [at the GCF].”
The GCF said its policy offered “strong protection” to whistleblowers and Telep’s allegation of retaliation was unsubstantiated.
But the fact that rules have been enforced against Telep and not his superior may fuel a sense of double standards within the organisation. In the 2020 staff survey, just 16% said senior management led by example and 19% said senior management were held accountable for their decisions and actions.
Glemarec attributes the spike in misconduct complaints to a lack of internal grievance mechanisms. An IIU investigation takes up to two years, in a deliberative process designed to give legal cover should the case end up in an employment tribunal. It requires a high standard of evidence to prove wrongdoing and cases against just three individuals were substantiated through 2018-20.
This was “causing a lot of frustration,” says Glemarec. “The problem is that if somebody has been making my life miserable for two years, by their behaviour, by their nasty comments… to be told after two years your case is not misconduct… actually you are adding insult to injury.”
Since 2019, the organisation has sought to improve the options for raising grievances internally. It hired two mediators and an ombudsperson and is rolling out training on conflict resolution to all staff. An appeals committee has been set up to handle disputes over administrative decisions, which heard three cases in 2020.
These measures should show results by the end of 2022, says Glemarec: “I wish to see a dramatic increase in resolution.”
In 2020, the number of misconduct allegations raised went down to 17. Five complaints of harassment were upheld against an individual working for one of the fund’s independent units, who was fired as a result, according to a GCF spokesperson.
But five senior managers accused in the Re-Green email of abuses of power, including sexual harassment of interns and bullying, are still working for the GCF, based on their LinkedIn profiles. That email and others like it were passed to the IIU to investigate, and the spokesperson said staff had been urged to report any grievances.
The 2020 staff survey included new questions designed to “probe pain points” identified through a series of “safe space” meetings. It showed there was a long way to go to regain staff trust: only one in three respondents (31%) said they believed action would be taken to address the problems identified.
The GCF spokesperson said staff were being consulted on which actions to prioritise to respond effectively to the survey.
“We will never be able to deliver on our mandate if we don’t create an institution that attracts the best talent,” says Glemarec, stressing that the GCF is only five years old and it takes time to establish a workplace culture.
Glemarec gives an animated pitch for why the US should increase its support. The GCF is on pace to programme $1 billion worth of projects at each of its three annual board meetings. With extra pledges, that could be scaled up to $1.5 billion. “This organisation is moving by leaps and bounds,” he says.
In response to the coronavirus pandemic, the fund is prioritising job-rich initiatives in areas like energy efficiency and restoring ecosystems, Glemarec says. “We decided to accelerate development of projects that could have not only a huge climate impact but a building-back-better, sustainable development impact.”
A $60 million facility to provide low-interest loans to suppliers of solar home systems and clean cookstoves in sub-Saharan Africa was approved within 190 days, for example. It is intended to give small companies the liquidity to ride out a pandemic-induced economic downturn.
In the pipeline ahead of Cop26 climate talks in November are funding proposals for the Great Green Wall initiative across the Sahel, access to clean cooling in hot countries, and resilient infrastructure in the Caribbean.
A spokesperson for the State Department told Climate Home News they would have details “in the coming months” on the US contribution to the GCF. “The Biden-Harris Administration will examine how best to reengage with the GCF and work to ensure this important institution is adequately funded and equipped to serve the Paris Agreement.”
The fund is “a critical component” of the administration’s climate finance plans, the spokesperson said. “We will work with the GCF board and leadership, as well as with accredited entities, to ensure that the fund is maximizing impact and transparency.”
A key figure developing the US climate finance strategy is Leonardo Martinez-Diaz, who joined Kerry’s team from the World Resources Institute. Shortly before his appointment he co-authored a report on “transforming climate finance”, which covered the whole architecture of public and private, bilateral and multilateral, specialist and non-specialist channels for supporting climate goals.
The report praised the “significant strides” made in the GCF’s operations since its replenishment by other donor countries in October 2019. A commitment by the US to join the replenishment “could provide a welcome boost to the resources needed by the GCF,” it said. “There is also a need to anticipate and prepare for a much more ambitious second replenishment.”
For the whistleblowers, fixing the “toxic” workplace culture needs to come first.
“Personally, I think if the US really cares about climate and not the political angle… a better investment could be something more effective, more nimble, more professionally managed,” says Telep.
“I want GCF to work but to work they have got to have quality projects and show both the beneficiaries and the donors that the money is spent effectively,” says James.
While Mary says the US should keep its $2 billion promise, she suggests other funds or bilateral agreements could be a better route for scaling up finance. “I am of the view that we should be thinking about other ways to deliver climate finance to some countries.”