In a landmark judgment, the Court of Justice of the European Union (CJEU) ruled on January 27th 2021 that the European Investment Bank (EIB) has illegally avoided environmental scrutiny of its financing decisions.

ClientEarth lawyers have applauded this ruling, which constitutes a major win for the NGO in the first case of this kind against the world’s biggest multilateral financier.

The news comes as the EIB releases its annual report, which calls for greater EU investment in climate change mitigation and adaptation. Despite this, the Bank had argued in court that its decisions ought to be exempt from scrutiny provided for by EU law.

Today’s court ruling confirms 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.

ClientEarth environmental democracy lawyer Sebastian Bechtel said: “Today’s judgment sets a major precedent. As a public institution using taxpayers’ money, the EIB must be accountable and ready to review its decisions if they break its internal rules or EU law meant to protect the environment.

“The EIB claims the fight against climate change is its first priority and has recently called for Europe to boost investments in the green transition. This is also essential to meeting the goals of the European Green Deal. But how can we make sure the environment is really at the heart of its funding decisions if the Bank seeks to deny the right of environmental groups to question them?”

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.

Lawyers considered 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 the NGO the right to ask for scrutiny of its decision, as should be guaranteed under international and EU law.

Bechtel said: “We cannot just blindly believe that the EIB always uses public money for the best possible environmental outcome. If there is evidence that an EIB project breaks environmental law and worsens climate change or biodiversity loss, the Bank must be open to criticism and judicial scrutiny. This is fundamental in a society based on the rule of law.”


About ClientEarth

ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.


ClientEarth wins court case against EIB over ‘green’ scrutiny

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