UK development finance arm makes bid to be world's 'most transparent'

A “Transparency Roadmap” pledged by the United Kingdom’s development finance institution, or DFI, has been praised for setting it on a path to greater openness about the impact of its investment decisions. Ministers have set British International Investment, or BII, the ambitious target to become “the most transparent” bilateral DFI in the world — requiring a big improvement from its current ranking of 12th out of 21 on the independent Publish What You Fund index. The task is key to an expanded poverty-fighting role for BII in the U.K.’s new development strategy, including an expectation that it will make more than half of its investments in the “poorest and most fragile countries” by 2030. The organization was sharply criticized by the U.K. Parliament’s International Development Committee in a report last year, for lacking “a clear poverty focus” and for excessive lending to middle-income countries, but both BII and the government disputed the findings. Now the new road map goes further than before in aligning BII with the practices of the Independent Aid Transparency Initiative, or IATI, a global campaign organization, by using it to publish investment data quarterly and in greater detail. A “Transparency and Disclosures Officer” will be appointed in the first quarter of 2024 to “enhance BII’s overall approach to transparency,” and greater effort will be made to demonstrate how investments contribute to meeting the U.N.’s Sustainable Development Goals. “This is a positive step. We’re glad they are aligning with international standards, including IATI. If they can deliver on everything in the roadmap, we’ll likely see a big jump in their performance,” said Gary Forster, the chief executive of Publish What You Fund. Forster said BII has lagged behind, for example, the U.S. International Development Finance Corporation in its disclosure systems and process, but added: “That doesn’t mean BII can’t catch up of course.” Bond, the network for U.K. aid organizations, also welcomed the commitment to greater scrutiny, but said this must be extended to BII’s indirect investments, where its capital is used by others to make investments. “It is also vital that BII does more to engage with, and be transparent to, the local communities and groups its investments impact,” said Gideon Rabinowitz, Bond’s director of policy and advocacy, adding: “One way it can do this is by including civil society representatives from key partner countries in the newly established transparency working group.” Among the other commitments in the road map are to: • Start publishing a quarterly “oversight report” by the Foreign, Commonwealth & Development Office, BII’s sole shareholder — by the third quarter of 2024. • Publish full details of each investment to IATI each quarter, instead of annually — by the second half of 2024. • Provide a “unique identifier” for each investment on BII’s database and disclose any repeat investments — by the first quarter of 2024. • State which investments since 2020 qualify as climate finance, in part or in full — by the first half of 2024. • Publish the “impact achieved” by every investment made since 2012 which BII has since ended — by the second half of 2024. • Disclose the “environmental and social (E&S) risk category” of each investment since January 2023 — by the first quarter of 2024. A BII statement said: “Our Transparency Roadmap charts a clear set of actions to achieve the goal of becoming the most transparent bilateral development finance institution.”