Lord Stern Engulfed In Funding Row

  • Date: 16/02/14
  • Dagbladet Information

Grantham Research Institute (GRI) at London School of Economics received a sizable research grant from the tax payer-funded Global Green Growth Institute (GGGI), during British economist Lord Stern’s tenure as vice chair of GGGI and chair of GRI. This happened despite warnings from GGGI officials about a conflict of interest.

A London School of Economics research institute chaired by Lord Nicholas Stern, an internationally renowned British economist and member of the House of Lords, has received 2.15 million USD from the tax payer-funded climate organization Global Green Growth Institute (GGGI), even though he was affiliated with both parties.

GGGI documents and e-mails leaked to Dagbladet Information, Denmark’s independent daily, show that leading GGGI employees warned  that there was a possible conflict of interest.

In January 2012, while the contract negotiations  were ongoing, a leading GGGI employee wrote an e-mail to GGGI’s then-director general, Richard Samans, expressing concern regarding the process. Among other things he questioned whether the internal procedures had been followed.

»Additionally, there will in all likelihood be an issue of conflict of interest with our board member, professor Stern. This also has to be clarified with the board prior to signing the proposal,« the e-mail continued.

The deal between GGGI and GRI also worried another leading official. In January 2012, he wrote in an e-mail to other senior colleagues that »Stern’s possible conflict of interest should be resolved before we continue discussions about this contract«.

The money was granted in March 2012, when GGGI signed a two year research contract with the LSE Grantham Research Institute (GRI). Lord Stern chaired the GRI since its foundation in 2008, while he was involved with GGGI from 2010 until November 2013, first as its vice chairman and later as a board member.

GGGI is an international organisation dedicated to promoting the idea of green growth in developing countries. It is funded by development aid from a number of countries, among them Denmark, Norway, Germany and the UK.

In recent months, the organisation has found itself in a number of scandals which have caused problems for the Danish opposition leader and GGGI Chairman, Lars Løkke Rasmussen, and forced the Danish minister for development, Christian Friis Bach, who was a GGGI board member, to resign from government.

Experts: ’Problematic’

In the case of the research grant, concerns voiced by GGGI employees were justified, experts told Information.

»There is a convergence of personal interests and networks in this case, which is very problematic,« said professor Christian Bjørnskov from Aarhus University, an expert on development economics who has studied corruption in the development world.

His assessment is supported by Indira Carr, a law professor at Surrey University and an expert on corruption.

»To an outside observer, there certainly seems to be a conflict of interest. Whether that actually influenced the decision to award the grant to this particular institute, is still a matter to be clarified. It would be appropriate for the donor countries to ask the GGGI to explain the process in details,« she said.

It is not known whether the question of a conflict of interest was cleared with the board, as demanded by the employees. In an e-mail to Information, GGGI said it would not be in line with its disclosure policy to share such information.

The Danish Ministry of Foreign Affairs, which was represented at the GGGI board, »has no knowledge of this particular case,« a spokesperson wrote to Information.

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