3rd Mekong Forum on Water, Food Private sector policies for contributing to environmental and social sustainability

1. Working Together
Helping clients solve environmental and social issues
using the Sustainability Framework
Kate Lazarus, Senior Operations Officer
E&S Standards in Hydro
1

2. 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?

4. LESSON #1
• Indirect Impacts
 New and unanticipated impacts will
inevitably arise
 Select a sponsor that demonstrates a
commitment to environmental and
social responsibility

5. “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”

6. 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’

7. 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’

9. Why E&S Risk Management is
Important to IFC
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
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

12. hat does the You Know?for staff?
Did update mean
Sustainability is one of IFC’s 5 Strategic Priorities
1. Strengthening the focus on frontier markets – IDA
Access to Information Policy
countries, poorer regions of middle-income countries
• New requirements for post-board reporting with brand potential
and less developed industry sectors on implementation
of E&S Action Plans and development results
2. Will lead to changes in design of ESAPs and AMRs
• Building long-term relationships with emerging market
players
Performance Standards
3. Existing requirements clarified
• Addressing climate change
and promoting
environmental and social sustainability
• Few requirements expanded; few new requirements
• Promoting changes to appraisal/supervision functions of E&S
4. No significantprivate sector growth in infrastructure,
specialists
health, and education
5. Developing local financial markets

13. IFC Sustainability Framework

14. Sustainability Policy
Defines IFC’s commitments
toward sustainability
Manage risk
Hierarchy:
Anticipate
Avoid
Minimize
Compensate or offset
Identify opportunities

15. hat does the update mean for staff?
IFC Performance Standards
Access to Information Policy
• New requirements for post-board reporting on implementation
PS1: Assessment and
PS4: Community Health,
PS2: Labor and Working
PS3: Resource Efficiency
of E&S E&S
Management of Action Plans and development results
Safety and Security
Conditions
and Pollution Prevention
Risks and Impacts
• 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
PS5: Land Acquisition
PS6: Biodiversity
PS8: Cultural Heritage
PS7: Indigenous Peoples
specialists
and Involuntary
Conservation and
Resettlement
Sustainable Management
of Living Natural Resources

16. hat does the update mean for staff?
Are We
Alone?
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

17. 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

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

19. 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

23. Thank you