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Billions of Dollars in Climate Funds at Risk Due to Corruption, Experts Warn

A new report from Transparency International has raised alarms over the significant risk of corruption siphoning off billions of dollars in climate funds, endangering crucial projects in some of the world’s most vulnerable nations.

For 30 years, Transparency International's Corruption Perceptions Index (CPI) has tracked global corruption trends, rating nations on a scale from 0 (highly corrupt) to 100 (very clean). The 2024 index reveals that many climate-vulnerable countries and even recent UN climate summit hosts rank poorly, raising serious concerns about the integrity of climate-related financial flows.

Corruption Threatens Climate Action

Transparency International's CEO, Maíra Martini, stressed the urgency of tackling corruption to prevent it from undermining meaningful climate action.

"We must urgently root out corruption before it fully derails meaningful climate action. Today, corrupt forces not only shape but often dictate policies and dismantle checks and balances - silencing journalists, activists, and anyone fighting for equality and sustainability," Martini stated.

More than two-thirds of the 180 countries ranked in the CPI score below 50, with the global average stagnating at 43. This persistent corruption threatens the efficacy of climate investments, jeopardizing initiatives aimed at reducing emissions and adapting to climate change.

High-Risk Countries and Climate Finance Misuse

Countries such as South Africa (41), Vietnam (40), and Indonesia (37) are identified as particularly vulnerable, with their Just Energy Transition Partnerships (JETPs) at risk due to corruption. These partnerships, designed to support coal-dependent nations in transitioning to greener energy sources, lack sufficient safeguards, providing opportunities for fraudulent actors to exploit funds.

In South Africa, the state-owned power utility Eskom reportedly loses over a billion rand (more than €52 million) monthly to corruption, severely hindering energy transition efforts.

Meanwhile, some of the world's most climate-affected countries, including South Sudan (8), Somalia (9), and Venezuela (10), rank at the bottom of the CPI, underscoring the dire need for stronger governance and financial oversight mechanisms.

Corruption Undermining Global Climate Policy

The report also highlights corruption's role in obstructing climate policies in both developing and developed nations. In wealthy countries, corporate and political interference weakens commitments to emission reductions and international climate financing.

The US saw its CPI score decline from 69 to 65 in 2024, with Transparency International attributing this drop to the influence of fossil fuel corporations on national climate policy. Greenpeace International's Executive Director, Mads Christensen, pointed to the ongoing legal battle between the environmental organization and Energy Transfer, a major US pipeline company, as an example of corporate attempts to suppress climate advocacy.

In Europe, Denmark (90) remains the least corrupt country, followed by Finland (88). However, other European nations, including France (67), Germany (75), Hungary (41), and Switzerland (81), recorded their lowest CPI scores in years, signaling growing concerns over governance and transparency.

Corruption Overshadowing UN Climate Summits

The report casts doubt on the transparency of UN climate summits, particularly in host nations. Azerbaijan, which hosted COP29 last year, scored just 22 on the CPI and allowed access to at least 1,773 fossil fuel lobbyists, raising fears that industry interests may have influenced global climate negotiations.

Looking ahead to COP30, Brazil faces scrutiny as it prepares to lead the next round of international climate talks. Despite its pivotal role in implementing climate finance agreements and shaping fossil fuel transition policies, Brazil received an all-time low CPI score of 34 this year, indicating significant governance challenges.

The Need for Stronger Anti-Corruption Measures

To safeguard climate investments and ensure the effective use of funds, Transparency International urges governments and multilateral organizations to embed anti-corruption measures into climate initiatives.

"Governments and multilateral organizations must embed anti-corruption measures into climate efforts to safeguard finance, rebuild trust, and maximize impact," Martini emphasized.

As the world continues to channel billions of dollars into climate action, addressing corruption will be critical in ensuring that these funds deliver on their intended purpose: protecting people and the planet from the escalating climate crisis.