A blog by Jonathan Morley, a PhD student at the University of Edinburgh in partnership with RSPB detailing a new paper that looks at how recent changes in World Bank policy might impact biodiversity conservation.

The World Bank provides loans and grants to low income countries to finance development projects. These can be a wide range of projects including building infrastructure such as roads or suppling teaching materials to schools. Infrastructure construction can have severe negative impacts on biodiversity through the destruction and fragmentation of habitats. To address this the Bank has policies which aim to reduce negative environmental impacts of the projects it funds.

As the largest global funder of development, the Bank has a lot of influence, with its policies previously being adopted as best practice by other organisations. These polices were replaced by a new policy that came into force in October 2018. In our new paper, published in Conservation Letters, we reviewed this new policy to try to understand how it might affect biodiversity. You can read the full text here (its open access). Below we summarise some of the key findings.

Deforestation along the BR-364 highway in Brazil. The road, funded by the World Bank, and the extensive environmental damage which followed, led to backlash from civil society organisations. This forced the Bank to adopt stricter environmental policies in the early 1990s © NASA/GSFC/LaRC/JPL, MISR Team: source

Biodiversity offsets

One of major changes is the use of biodiversity offsets to manage impacts. Biodiversity offsets allow for negative impacts from an activity, such as building a road, to be compensated for by conservation activities elsewhere. Simplistically, this means the loss of one lot of biodiversity can be replaced by investing in biodiversity elsewhere whether that’s populations of a species or areas of natural habitat.

Before offsets can be used, the negative impacts of a project must be reduced as much as possible by other means. Following a ‘mitigation hierarchy’ impacts must be minimised by avoiding, mitigating, and restoring. Any impacts which remain after this process can then be ‘offset’ and compensated by conservation activities such as improving or protecting habitats. More information about mitigation hierarchies and offsets can be found here.

To give a very simple example if road was being built to connect villages surrounded by forests, it would first have to avoid negative impacts by following a route that meant the smallest possible area of forest is cleared. Impacts could then be mitigated by including fencing and wildlife crossings, and finally additional areas cleared during the construction processes could be restored. These steps would not prevent all habitat loss or effects of fragmentation. In this case the remaining impacts could be compensated for by an offset by protecting another similar patch of tropical forest elsewhere. Therefore, the theory goes, although some species and habitats will be lost due to the road being built more will be saved by protecting a similar forest and the net effect on biodiversity is neutral or positive.

Offsets are controversial however they are also increasingly used in infrastructure development. During the consultation process several conservation organisations raised concerns about their prominent role in the new policy. One of the main issues raised with the use of offsets is that we don’t yet have evidence that they actually work effectively in wide range of settings. Their success is likely very dependent on the specific conditions of a project, its impacts, and how well the offset is designed. The Bank’s policy does not place strong conditions the use of offsets and contains several vague caveats to the restrictions such as “where finically and technically feasible” and “where appropriate”.

Landscape in rural china. China has historically been one of the largest borrowers of World Bank funds. However, China now funds development projects in other countries itself © Curt Carnemark / World Bank (Flickr - CC BY-NC-ND 2.0)

Borrower’s Frameworks

Another major change is the use of borrowers’ frameworks. This means a borrower country can use their own laws and regulations to manage impacts instead of following the requirements of the Banks policy. This is better for borrowers as using their owns laws and regulations is cheaper, easier, and quicker to get projects approved. However, concerns were raised by a number of organisations that the language in the policy is so vague that these frameworks could be used in almost any situation.

The decision about whether a borrower’s framework is suitable is decided by Bank staff and the criteria they must assess them against are very vague. These are the same individuals who have targets to meet about the number of new projects they get approved, creating a risk of a serious conflict of interest. The Bank has previously been criticised for having an organisational culture focused on getting projects approved, regardless of the consequences.

The weak assessment criteria may also limit the ability of civil society to hold the Bank to account when projects do cause harm as the assessment could be shown to have been ‘reasonable’. This is important because it was pressure from environmental groups that lead the Bank to adopt safeguards policies initially.


Some elements in the new policy could prove beneficial to biodiversity conservation and it does mirror widely accepted industry best practise. However, there are several legitimate concerns about the vague language it contains and the reliance on offsets, a yet unproven management tool. These concerns were raised during the consultation, but they have not been incorporated into the final policy. We hope that by highlighting these issues, we can assist conversation organisations will continue to engage with the Bank, and its borrowers, to ensure that the possible negative effects of the new policy are minimised.

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