Annual report - Trust Fund for Environmentally and Socially Sustainable Development (TFESSD)

TFESSD is a multi-donor trust fund supported by Finland and Norway that
provides grant resources for World Bank activities aimed at mainstreaming the environmental, social and poverty reducing dimensions of sustainable development into the World Bank's work. It develops Bank and client country capacity, promotes inclusion of sustainable development issues into Bank operations, and fosters cooperation between different units in the World Bank and with external groups. Since inception, TFESSD has supported 367 ongoing and closed activities in low and lower middle-income countries.
Fifty percent of the funding is earmarked to Sub-Saharan Africa.

Since its inception in 2000, cumulative donor contributions to the TFESSD have reached $101.28 million of which 78% has been committed or disbursed. TFESSD activities are managed in four Windows which correspond to the four Sector Boards (Environment, Poverty, Social Development, and Social Protection). Activities in the Environment Window primarily support strategic environment work across the World Bank Group. Activities in the Social Development Window aim to mainstream the social
development agenda into World Bank lending and advisory support. Activities in the Poverty Window support the development of poverty reduction strategies, poverty analysis, and the design, implementation, monitoring, and evaluation of poverty reduction. Activities in the Social Protection Window primarily support thematic and cross-cutting work on social protection, disability, and labor.

Funding new activities is awarded on a competitive basis through an annual open call for proposals and review by a technical committee and vetted by the four Sector Boards. For FY09, the Bank and the Donors agreed to focus on adaptation to climate change. Fifty-three concepts were received, of which thirty-eight were approved spanning across a variety of sectors and issues related to adaptation to climate change, including agriculture, environment, fisheries, forests, energy, disasters, migration, poverty, rural institutions, human rights, and indigenous people. The approved proposals promise a
challenging multisectoral work program spanning all the regions and all of the major social, economic, and environmental issues surrounding adaptation to climate change in developing countries.

Looking forward, the FY09 allocations on adaptation to climate change offer
strong potentials for broadening the Bank's approach to climate change and development beyond environmental dimensions, bridging knowledge and policy gaps on impacts on and responses of people and communities, especially the most vulnerable.

An external evaluation of TFESSD concluded that "…TFESSD has managed to influence the mainstreaming of selected sustainable development approaches, concepts and methods in Bank policy and operations. This is a significant achievement….It confirms the rationale of the fund."
The findings of the evaluation confirmed the relevance and influence of TFESSD. The report concluded that "…TFESSD has managed to influence the mainstreaming of selected sustainable development approaches, concepts and methods in Bank policy and operations. This is a significant achievement…. It confirms the rationale of the fund, that is, with an appropriately designed trust fund mechanism and with relevant themes and
criteria for project selection, it has been possible to influence the Bank". The report further concluded that "Several of the assessed country-specific projects have influenced country-level policies and projects….Some of the projects have contributed to set the stage for future Bank policy/operations… others are relatively small projects, mainly complementing other efforts and aimed at contributing to widening and deepening the Bank's policy dialogue."
The report further finds that "Several non-country specific projects have influenced Bank policy and operations. Through the development of strategies, tools and guides, the projects have developed, catalyzed and mainstreamed sustainable development approaches and practices in Bank policy and operations…. The relevance of the assessed trust fund projects has been high vis-à-vis their respective contexts…. The effectiveness of the assessed projects has been satisfactory." (page 12).

The report also notes the inherent difficulty of evaluating a trust fund such as the TFESSD. Many of the funded activities are relatively small, complement other funding sources, and form part of a larger work program. It is therefore hard to ascribe causality and trace influence.