Enhancing Effectiveness and Sustainability in Our Operations
World Bank operations benefit from a robust risk management approach to ensure they deliver strong country support while protecting the poorest and most vulnerable people. These safeguards include the Environmental Social Framework, the Procurement Framework, grievance redress mechanisms, and measures to prevent and address gender-based violence in our operations. We also work through trust funds and financial intermediary funds to deploy rapid financing and generate knowledge for key development priorities. Collectively, these efforts enable us to deliver effective, efficient, and tailored support to countries to help them achieve more resilient, sustainable, and inclusive development.
The World Bank’s Environmental and Social Framework
The Environmental and Social Framework applies to Investment Project Financing initiated on or after October 1, 2018. The framework promotes sustainable and inclusive development outcomes by strengthening protections for people and the environment and addressing a broad range of environmental and social issues and risks in an integrated manner. These include labor and working conditions, community health and safety, resource efficiency, biodiversity, gender-based violence, and inclusion and non-discrimination.
The framework also places a strong focus on transparency and stakeholder engagement through meaningful and ongoing consultations throughout the project life cycle, responsive grievance mechanisms, and timely information disclosure. It promotes a risk-based and proportionate approach and allows for adaptive risk management to respond to changes in project circumstances. It further seeks to strengthen client countries’ environmental and social capacity and systems. As of the end of June 2023, the framework applies to 47 percent of our active Investment Project Financing portfolio, with the transition from the Safeguard Policies expected to last several more years.
The World Bank Procurement Framework
Since July 2016, the Bank’s Procurement Framework has enabled tailored procurement approaches for Investment Project Financing operations, emphasizing sustainability and value for money in public procurement. In fiscal 2023, 76 percent of the Bank’s Investment Project Financing portfolio, by awarded value, applied the framework. The rate of coverage increases as older projects close and new ones are approved; all procurement is expected to apply the framework by 2026.
In fiscal 2023, we completed a review of the framework to assess its results. It found a profoundly positive impact on many aspects of procurement under Bank-financed Investment Project Financing operations. Supply markets are diversifying, resulting in increased competition. And 77 percent of the contracts by value over the past five years were with new market entrants, suggesting greater private sector confidence in the Bank’s procurement procedures.
Innovations in procurement—such as the Hands-On Expanded Implementation Support modality and Bank-facilitated procurement—have played critical roles in our response to COVID-19, helping us adapt to evolving operating environments and changing global supply chain dynamics while providing stepped-up support to countries. Through Hands-On Expanded Implementation Support, the Bank provides direct support to borrowing countries, especially in situations of fragility, conflict, and violence. This has helped cut the average processing time of procurement actions by two-thirds, with even greater reductions in fragile environments. It has also increased transparency and enabled us to address complaints faster, with half of complaints in fiscal 2022 being addressed within 19 calendar days.
During fiscal 2023, we updated all procurement documents, issued new guidance, and rolled out a major training and communications program to support the mandatory use of rated criteria for all international contracts advertised on or after September 1, 2023. Using these criteria more widely will increase borrowers’ flexibility to procure works, goods, and non-consulting services best suited to their specific situations. It will also encourage the best suppliers to bid and participate in Bank-financed projects.
We developed guidance notes and training programs on key procurement aspects, such as supply chain management, sustainable procurement, contract management, and cybersecurity. We implemented mandatory direct payment for all procurements in fragile environments. We expanded the publication of beneficial owners of winning bidders to include all internationally advertised contracts. We also implemented a major upgrade to the Systematic Tracking of Exchanges in Procurement system to facilitate contract management, including better monitoring of contracts’ physical and financial implementation.
Addressing risks of sexual exploitation, abuse, and harassment in our operations
We remain committed to preventing and mitigating the risks of gender-based violence, including sexual exploitation and abuse and sexual harassment, in our operations.
In September 2022, we released a new good practice note to help Bank staff and borrowers in identifying, addressing, and monitoring risks of sexual exploitation and abuse and sexual harassment in Investment Project Financing projects that focus on education, health, nutrition, social protection, and jobs. Rooted in the principles of the Environmental Social Framework and a Bank directive on addressing risks and impacts on disadvantaged or vulnerable individuals or groups, the note addresses the specific drivers of risks and opportunities in human development operations, including the large in-situ workforce, which often includes civil servants, the wide footprint of human development operations, and the power differentials between project actors and the most vulnerable people.
We have organized dedicated internal training on the note and leveraged a variety of awareness-raising opportunities, with about 250 staff trained in the second half of fiscal 2023. We have also begun training for borrowers. And we updated our good practice note on addressing sexual exploitation and abuse and sexual harassment in Investment Project Financing projects involving major civil works in order to integrate stronger guidance on how to identify and address the specific needs of children.
We continue to work with other international financial institutions to harmonize operational approaches to address sexual exploitation and abuse and sexual harassment in development operations; exchange knowledge, including through a shared website; and support collaboration and coordination with countries while promoting a survivor-centered approach.
Supporting countries through trust funds and financial intermediary funds
Through trust funds and financial intermediary funds, the Bank Group can deploy financing quickly, expand operations, and generate knowledge to help countries reduce poverty and boost shared prosperity in a sustainable way. These funds have provided financing, analytical support, and policy advice to respond to development challenges such as COVID-19, climate change, the food and energy crises, and Russia’s invasion of Ukraine.
At the end of fiscal 2023, $51.1 billion was held in trust in the form of cash, investments, and promissory notes. Of this, $14.7 billion was for trust funds and $34.5 billion for financial intermediary funds. Trust funds finance about two-thirds of the World Bank’s advisory services and analytics, with 85 percent ($31.5 billion) of total trust fund disbursements going to countries during fiscal 2019–23. Of this amount, over $8.3 billion was disbursed to IDA and blend countries (countries eligible for both IDA and IBRD lending). Contributions to financial intermediary funds averaged $9.6 billion annually, while cash transfers to implementing entities remained steady, with an average annual transfer of $7.9 billion over the past five years.
As the role of trust funds has evolved during the past few decades, the Bank has undertaken initiatives and reforms to improve the effectiveness of trust fund resources and activities. The Bank is transitioning its trust fund portfolio into fewer, larger, and more strategically aligned “Umbrella 2.0” programs. The Management Framework for Financial Intermediary Funds strengthens the selectivity criteria for these funds and ensures a more systematic approach to their life-cycle management.
Umbrellas and financial intermediary funds are important arrangements for donors to support global public goods. The Scaling Climate Action by Lowering Emissions partnership is a new Umbrella program that will help countries unlock the potential of carbon markets. The Global Concessional Finance Facility is a financial intermediary fund that helps countries manage the influx of refugees—critical in situations where access to IBRD resources is constrained. The World Bank has mobilized over $21.6 billion in vital financing through trust funds, providing fast-disbursing support to Ukraine to maintain essential services and core government functions during the war. The Bank also launched a new trust fund for Pandemic Prevention, Preparedness, and Response that will assess and strengthen health preparedness in developing countries.
Grievance Redress Service
Established in 2015, the Grievance Redress Service provides individuals and communities with an avenue to submit complaints directly to the World Bank if they believe a Bank-supported project has or is likely to have adverse effects on them, their community, or their environment. The service complements project-level grievance mechanisms overseen by country authorities and ensures that complaints received directly by the Bank are promptly addressed through sound and sustainable solutions. Cases cover a broad spectrum of issues, including harm to people’s livelihoods, adverse impacts on the environment, and community health and safety concerns. The service plays a key role in identifying trends and systemic issues from past cases to foster institutional learning and apply lessons learned to new and ongoing operations.
In fiscal 2023, the Grievance Redress Service received 538 complaints from more than 70 countries.