Multilateral development banks (MDBs) have become major financiers of green hydrogen production in emerging markets and developing countries. To manage project risks, MDBs apply environmental and social policies into their due diligence mechanism. This research evaluates the effectiveness of MDBs’ environmental and social policies in mitigating the risks of green hydrogen production. It adopts content analysis to quantitatively analyze seven green hydrogen projects funded by MDBs, selected based on the availability of publicly accessible information. It classifies all environmental and social risks due to green hydrogen projects into 20 risk areas and categorizes MDBs’ policies into four types, including measurement-based, minimization-based, mitigation-based, and condition-based. The findings show that while MDBs have established comprehensive policy frameworks, several important risk areas are insufficiently addressed. This study highlights the inadequacies of MDBs’ environmental and social policies and proposes suggestions to support more sustainable green hydrogen development.
AzadniaA. H.McDaidC.AndwariA. M.HosseiniS. E. (2023). Green hydrogen supply chain risk analysis: A European hard-to-abate sectors perspective. Renewable and Sustainable Energy Reviews, 182, Article 113371. https://doi.org/10.1016/j.rser.2023.113371
3.
BadeS.TomomewoO. S.MeenakshisundaramA.FerronP.OniB. A. (2024). Economic, social, and regulatory challenges of green hydrogen production and utilization in the US: A review. International Journal of Hydrogen Energy, 49, 314–335. https://doi.org/10.1016/j.ijhydene.2023.08.157
4.
BlohmM.DettnerF. (2023). Green hydrogen production: Integrating environmental and social criteria to ensure sustainability. Smart Energy, 11, Article 100112. https://doi.org/10.1016/j.segy.2023.100112
BrunnéeJ. (2005). International legal accountability through the lens of the law of state responsibility. In Netherlands Yearbook of International Law (Vol. 36, pp. 21–56). Cambridge University Press.
7.
BrymanA. (2016). Social research methods (5th ed.). Oxford University Press.
8.
CousinsD. (2015). Implementing environmental and social risk management on the ground: Interfaces between clients, investment banks, multi-laterals, consultants and contractors – A case study from the EBRD. In WendtK. (Ed.), Responsible investment banking (pp. 81–107). Springer.
9.
CremoneseL.MbunguG. K.QuitzowR. (2023). The sustainability of green hydrogen: An uncertain proposition. International Journal of Hydrogen Energy, 48(51), 19422–19436. https://doi.org/10.1016/j.ijhydene.2023.01.350
10.
DelikanliI. U.DimitrovT.AgolliR. (2018). Multilateral development banks: Governance and finance. Springer International Publishing: Imprint: Palgrave Macmillan.
11.
DesiertoD. A. (2020). Due diligence in World Bank project financing. In KriegerH.PetersA.KreuzerL. (Eds.), Due diligence in the international legal order (pp. 329–347). Oxford University Press.
12.
DewarJ.Ofori-QuaahF. H. (2019). Official funding sources: Multilateral and development finance agencies. In DewarJ. (Ed.), International project finance: Law and practice (3rd ed., pp. 241–256). Oxford University Press.
13.
DouY.SunL.RenJ.DongL. (2017). Opportunities and future challenges in hydrogen economy for sustainable development. In ScipioniA.ManzardoA.RenJ. (Eds.), Hydrogen economy: Supply chain, life cycle analysis and energy transition for sustainability (pp. 277–303). Academic Press.
Energy Sector Management Assistance Program (ESMAP), Organisation for Economic Co-operation and Development (OECD), Global Infrastructure FacilityHydrogen Council. (2024). Scaling hydrogen financing for development (ESMAP paper). World Bank. https://www.esmap.org/Hydrogen_Financing_for_Development
GaleF.GoodwinD.LovellH.Murphy-GregoryH.BeasyK.SchoenM. (2024). Renewable hydrogen standards, certifications, and labels: A state-of-the-art review from a sustainability systems governance perspective. International Journal of Hydrogen Energy, 59, 654–667. https://doi.org/10.1016/j.ijhydene.2024.02.038
GrantR. W.KeohaneR. O. (2005). Accountability and abuses of power in world politics. The American Political Science Review, 99(1), 29–43. https://doi.org/10.1017/s0003055405051476
KrippendorffK. (2019). Content analysis: An introduction to its methodology (4th ed.). Sage.
46.
LorenzoJ. A. P. (2024). Accountability mechanisms of multilateral development banks and the law of international responsibility. The International and Comparative Law Quarterly, 73(1), 209–245. https://doi.org/10.1017/s0020589323000556
47.
MendezA.HoughtonD. P. (2020). Sustainable banking: The role of multilateral development banks as norm entrepreneurs. Sustainability, 12(3), Article 972. https://doi.org/10.3390/su12030972
48.
MertensD.ThiemannM. (2019). Building a hidden investment state? The European Investment Bank, national development banks and European economic governance. Journal of European Public Policy, 26(1), 23–43. https://doi.org/10.1080/13501763.2017.1382556
OestreichJ.ChoyL. Y.QuitzowR. (forthcoming). Sustainability governance in the hydrogen sector: The role of multilateral development banks (RIFS study). Research Institutefor Sustainability (RIFS).
51.
PrasekD. (2015). EBRD environmental and social governance standards and their impact on the market. In WendtK. (Ed.), Responsible investment banking (pp. 71–79). Springer Cham.
52.
PtX Hub. (2022). PtX sustainability dimensions and concerns – Towards a conceptual framework for standards and certification. https://ptx-hub.org/ptx-sustainability/
53.
RiegnerM. (2023). The law of multilateral development banks: Sustainability and participation in international development finance. In PetersB.LohseE. J. (Eds.), Sustainability through participation? Perspectives from national, European and international law (1st ed., pp. 433–457). Koninklijke Brill NV.
WeberO.ElAlfyA. (2019). The development of green finance by sector. In MigliorelliM.DessertineP. (Eds.), The rise of green finance in Europe: Opportunities and challenges for issuers, investors and marketplaces (p. 54). Springer International Publishing.
