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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

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?

LESSON #1

• Indirect Impacts New and unanticipated impacts

will inevitably arise Select a sponsor that

demonstrates a commitment to environmental and social responsibility

“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”

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’

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’

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

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

IFC SUSTAINABILITY FRAMEWORK

Sustainability Policy

Manage riskHierarchy:

AnticipateAvoidMinimizeCompensate or offset

Identify opportunities

Defines IFC’s commitments toward sustainability

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

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?

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

Still no banks in the Mekong have signed up to the Equator Principles

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

Thank you