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WORKING TOGETHER HELPING CLIENTS SOLVE ENVIRONMENTAL AND
SOCIAL ISSUESUSING THE SUSTAINABILITY FRAMEWORK
KATE LAZARUS, SENIOR OPERATIONS OFFICERE&S STANDARDS IN HYDRO
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What can different companies learn from each other in the implementation of environmental and social policies and strategies, and why do they make sense to pursue?
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LESSON #1
• Indirect Impacts New and unanticipated impacts
will inevitably arise Select a sponsor that
demonstrates a commitment to environmental and social responsibility
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“You have to start with client
commitment. We can build E&S capacity
in a client, but they must commit to that
process.
And a client with high capacity but no
commitment to our E&S framework is not
one we should take on”
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LESSON #2
• Cumulative Effects ‘..should be dealt with at
appraisal when leverage is the highest’
‘…must be cognizant of the potential impacts of other projects and activities in the area of influence’
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LESSON #3
•Added Value ‘local values and needs may diverge from a program’s best intentions’
Strong commitment to capacity building is critical for success’
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IFC’s Private Sector Clients
• 88% of clients believe the IFC standards in E&S risk management are helpful
• Return on equity (ROE) and return on assets (ROA) improve with better environmental performance
• Clients value our expertise in E&S Risk Management over competitors
WHY E&S RISK MANAGEMENT ISIMPORTANT TO IFC
Our Development Mandate
• Successful companies are important for long term growth, jobs, development—impacting the poor
• Good risk management has a positive impact on the environment, society, and business
• There is a positive correlation between good E&S risk management and our financial performance
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hat does the update mean for staff?
Access to Information Policy• New requirements for post-board reporting on
implementation of E&S Action Plans and development results
• Will lead to changes in design of ESAPs and AMRs
Performance Standards• Existing requirements clarified• Few requirements expanded; few new requirements• No significant changes to appraisal/supervision functions
of E&S specialists
DID YOU KNOW?
1. Strengthening the focus on frontier markets – IDA countries, poorer regions of middle-income countries and less developed industry sectors with brand potential
2. Building long-term relationships with emerging
market players
3. Addressing climate change and promoting environmental and social sustainability
4. Promoting private sector growth in
infrastructure, health, and education5. Developing local financial markets
Sustainability is one of IFC’s 5 Strategic Priorities
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IFC SUSTAINABILITY FRAMEWORK
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Sustainability Policy
Manage riskHierarchy:
AnticipateAvoidMinimizeCompensate or offset
Identify opportunities
Defines IFC’s commitments toward sustainability
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hat does the update mean for staff?
Access to Information Policy• New requirements for post-board reporting on
implementation of E&S Action Plans and development results
• Will lead to changes in design of ESAPs and AMRs
Performance Standards• Existing requirements clarified• Few requirements expanded; few new requirements• No significant changes to appraisal/supervision functions
of E&S specialists
IFC PERFORMANCE STANDARDS
PS1: Assessment and Management of E&S
Risks and Impacts
PS2: Labor and Working Conditions
PS3: Resource Efficiency and
Pollution Prevention
PS4: Community Health, Safety and Security
PS5: Land Acquisition and Involuntary Resettlement
PS6: Biodiversity Conservation and
Sustainable Management
of Living Natural Resources
PS7: Indigenous Peoples
PS8: Cultural Heritage
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hat does the update mean for staff?
Access to Information Policy• New requirements for post-board reporting on
implementation of E&S Action Plans and development results
• Will lead to changes in design of ESAPs and AMRs
Performance Standards• Existing requirements clarified• Few requirements expanded; few new requirements• No significant changes to appraisal/supervision functions
of E&S specialists
ARE WE
Alone?
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EQUATOR PRINCIPLES: PRIVATE TO PUBLIC GOOD
• IFC Performance Standards are the leading
benchmark for environmental and social risk
management in the private sector
• Equator Principles: Industry standards for
environmental and social risk management
developed by private sector banks based on IFC’s
PSs and EHS Guidelines, now used by 79
financial institutions worldwide
• IFC is a resource to EPFIs, providing guidance on
sustainability practices
• Annual Community of Learning Event
• Regional Community of Learning Events
• China Green Credit Policy referenced the use of
Performance Standards and Equator Principles
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Still no banks in the Mekong have signed up to the Equator Principles
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The E&S Bottom Line
• Clarity (of expectations)• Effective communication (with all parties)• Confidence (issues addressed, mechanisms to manage,
commitment of management team)• Execute (plan, implement, check, act)• Integrate (management, strategic, operational
processes)• Results on the ground (project benefit)• Commitment to addressing E&S• Transparency of information• Adapt to change
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Thank you