Press release: 6 July 2023
Top EU court confirms ‘once and for all’ that the EIB cannot avoid environmental scrutiny
The Court of Justice of the EU (CJEU) has decided that the European Investment Bank (EIB) illegally avoided environmental scrutiny of its financing decisions.
ClientEarth lawyers have applauded this ruling, which reaffirms an initial major win the NGO obtained in 2021, after it launched the first-of-its-kind case against the world’s biggest multilateral financier. Both the EIB and the European Commission had appealed this judgement.
ClientEarth environmental democracy lawyer Sebastian Bechtel said:
“Today’s court ruling confirms once again that the self-proclaimed “world’s first climate bank” must follow EU law and must review certain funding decisions – some of which have huge environmental impacts – when a lawful request is made.
“The EIB must immediately act on this court decision and let NGOs and members of the public scrutinise its financing decisions if there is evidence that they break environmental laws or worsen climate change and biodiversity loss. This is fundamental in a society based on the rule of law.”
ClientEarth took the EIB to court after the bank rejected the NGO’s request to carry out an internal review of its decision to grant a €60 million loan for the construction of a Spanish biomass plant.
The lawyers argued the loan breached the bank’s financing criteria for responsible investment in renewable energy and that numerous errors had been made in assessing the project’s suitability for funding.
But the EIB claimed the request was inadmissible, denying ClientEarth the right to scrutinise its decision, as should be allowed under international and EU law.
The CJEU ruled in favour of ClientEarth in a first ruling, but the EIB appealed this decision. There is no possibility for the EIB to further appeal.
ENDS
Notes to editors:
The EIB is the lending arm of the European Union, having signed a total of €65.15 billion of financing in 2022 alone. In 2019, the EIB adopted a roadmap to become the “Climate Bank” and to back the European Green Deal financially.
But the EIB has shield away from public scrutiny. Following a complaint brought by a group of NGOs, the European Ombudsman asked the Bank last year to improve transparency around the projects it finances.
In October 2018, the Bank refused to conduct an internal review of its financing decision at the request of ClientEarth. ClientEarth appealed the ruling in January 2019, winning on first instance in May 2021. Both the EIB and the Commission appealed the ruling.
About ClientEarth
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.