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Helping clients solve environmental and social issues using the sustainability framework
 

Helping clients solve environmental and social issues using the sustainability framework

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

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

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Helping clients solve environmental and social issues using the sustainability framework Helping clients solve environmental and social issues using the sustainability framework Presentation Transcript

  • Working Together Helping clients solve environmental and social issues using the Sustainability Framework Kate Lazarus, Senior Operations Officer E&S Standards in Hydro 1
  • 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’
  • 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
  • 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
  • IFC Sustainability Framework
  • Sustainability Policy Defines IFC’s commitments toward sustainability Manage risk Hierarchy: Anticipate Avoid Minimize Compensate or offset Identify opportunities
  • 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
  • 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
  • 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