©2013 Ekonnect Knowledge Foundation
By at
Dr. Prasad Modak, IAIA, 2013, Calgary
Director, Ekonnect Knowledge Foundation
Global Environmental Governance
“the sum of organizations, policy instruments, financing
mechanisms, rules, procedures and...
What is Environmental, Social and
Governance (ESG) ?
 Term used by financial institutions
 Governance for managing impac...
National ESG
 The extent and rigor of National is uneven as national
priorities are different and so are the implementati...
5
The “Players”
Split Governance ?
Parallel Governance?
Ambiguities?
Conflicts?
Overlaps?
Financing Institutions, Markets,...
Forces towards Harmonization
National
ESG
Multilateral
Environmental
Agreements
Development
Financing
Institutions
Private...
Deeper and Tiered Process
Multiple Levels of Harmonization
Multilateral
Environmenta
l Agreements
Country
C
Country
A
Coun...
Harmonization of What?
 Policy Principles
 Acts, Rules, Standards, Exclusions/Prohibitions
 Procedures
 Practices
 Mo...
Influence by Multilateral Environmental
Agreements – Example of ESG in India
The Hazardous Wastes (Management,
Handling & ...
How have Development Finance
Institutions (DFI) been influencing ESG?
Loan covenants /guarantees to investors and entrepre...
Environmental and Social Safeguards of DFIs
Development Finance
Institution
Environmental and
Social Safeguards
Asian Deve...
Commonalities in Safeguards among
Financial Institutions?
 Environmental Assessment
 Involuntary Displacement
 Indigeno...
What are the differences in Safeguards
among Financial Institutions?
 ADB- List of Prohibited Investment
Activities
 FMO...
Points of conflict in DFI Safeguards and
Indian Requirements - Environmental
 International Finance Corporation’s Environ...
Points of conflict in DFI Safeguards
and Indian Requirements - Social
Stage of conducting public consultation in environme...
Private Sector Financing Institutions
Principles & Initiatives
Periodic training on
Environmental And
Social Risk
Assessme...
The Pyramid of Harmonization of ESG
Policy Principles
Monitoring & Reporting (Responsibility, Scope, Rigor, Timing)
Proced...
Role of Impact Assessment
 Encompasses Policy to Practice
 Addresses Sustainability at various Tiers
 Involves numerous...
Questions / suggestions ?
Email prasad.modak@emcentre.com,
prasad.modak@ekonnect.net
URL: http://www.ekonnect.net/
©2013 E...
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Can we have a global standard on Environmental and Social Governance

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A presentation made by Dr. Prasad Modak at the Annual Conference of International Association of Impact Assessment at Calgary, Canada in May, 2013

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Can we have a global standard on Environmental and Social Governance

  1. 1. ©2013 Ekonnect Knowledge Foundation By at Dr. Prasad Modak, IAIA, 2013, Calgary Director, Ekonnect Knowledge Foundation
  2. 2. Global Environmental Governance “the sum of organizations, policy instruments, financing mechanisms, rules, procedures and norms that regulate the processes of global environmental protection” Auditing the Implementation of Multilateral Environmental Agreements (MEAs): A Primer for Auditors’ prepared by UNEP in cooperation with INTOSAI-WGEA, 2010 ©2013 Ekonnect Knowledge Foundation
  3. 3. What is Environmental, Social and Governance (ESG) ?  Term used by financial institutions  Governance for managing impacts of investments on environment, communities and workers Child Labour Climate Change Environmental Pollution Regulations Ethical Practices Resource
  4. 4. National ESG  The extent and rigor of National is uneven as national priorities are different and so are the implementation capacities.  Harmonization of ESGs is however needed given the globalization of economies and when it comes to managing of regional/global issues. ©2013 Ekonnect Knowledge Foundation
  5. 5. 5 The “Players” Split Governance ? Parallel Governance? Ambiguities? Conflicts? Overlaps? Financing Institutions, Markets, Communities, Supply-Chains, Workers, Global Agreements ©2013 Ekonnect Knowledge Foundation
  6. 6. Forces towards Harmonization National ESG Multilateral Environmental Agreements Development Financing Institutions Private Sector Financing Institutions Communitie s Markets Supply Chain ©2013 Ekonnect Knowledge Foundation
  7. 7. Deeper and Tiered Process Multiple Levels of Harmonization Multilateral Environmenta l Agreements Country C Country A Country B Equator Principles Ban k A Ban k D Ban k C Ban k B Developmen t Financing Institutions AD B KfW World Bank IDB ©2013 Ekonnect Knowledge Foundation
  8. 8. Harmonization of What?  Policy Principles  Acts, Rules, Standards, Exclusions/Prohibitions  Procedures  Practices  Monitoring/Audit Protocols  Reporting ©2013 Ekonnect Knowledge Foundation
  9. 9. Influence by Multilateral Environmental Agreements – Example of ESG in India The Hazardous Wastes (Management, Handling & Transboundary Movement) Rules 2008 The Biological Diversity Act, 2002 ©2013 Ekonnect Knowledge Foundation
  10. 10. How have Development Finance Institutions (DFI) been influencing ESG? Loan covenants /guarantees to investors and entrepreneurs, financing public infrastructure projects Borrowers required to conform to DFI Environmental and Social safeguards Knowledge Creation (Case studies) & Capacity Building ©2013 Ekonnect Knowledge Foundation
  11. 11. Environmental and Social Safeguards of DFIs Development Finance Institution Environmental and Social Safeguards Asian Development Bank (ADB) Safeguard Policy Statement World Bank Ten Operational Policies Inter-American Development Bank (IDB) Sustainability Standards International Finance Corporation (IFC) Performance Standards Bilateral DFIs Subscribe to IFC Performance Standards ©2013 Ekonnect Knowledge Foundation
  12. 12. Commonalities in Safeguards among Financial Institutions?  Environmental Assessment  Involuntary Displacement  Indigenous Peoples  Natural Habitats  Physical Cultural Resources ©2013 Ekonnect Knowledge Foundation
  13. 13. What are the differences in Safeguards among Financial Institutions?  ADB- List of Prohibited Investment Activities  FMO, Netherlands and IFC – Exclusion List  Wider exclusion list – FMO, Netherlands High Conservation Value Areas Pornography and Prostitution Racist media Anti-Democratic Media ©2013 Ekonnect Knowledge Foundation
  14. 14. Points of conflict in DFI Safeguards and Indian Requirements - Environmental  International Finance Corporation’s Environmental Health & Safety Guidelines  Specific standards for emissions and effluents  Borrower required to follow more stringent standards between IFC and Host Country ©2013 Ekonnect Knowledge Foundation
  15. 15. Points of conflict in DFI Safeguards and Indian Requirements - Social Stage of conducting public consultation in environmental assessment Involuntary displacement – Responsible institution for Resettlement and Rehabilitation Compensation for titleholders and non-titleholders Compensation for economic loss in addition to physical loss ©2013 Ekonnect Knowledge Foundation
  16. 16. Private Sector Financing Institutions Principles & Initiatives Periodic training on Environmental And Social Risk Assessment Follow IFC Performance Standards and EHS Guidelines ©2013 Ekonnect Knowledge Foundation
  17. 17. The Pyramid of Harmonization of ESG Policy Principles Monitoring & Reporting (Responsibility, Scope, Rigor, Timing) Procedures (Responsibility, Scope, Rigor, Timing) Acts, Rules, Standards, Exclusions (Best) Practices Divergence increases as we move to the base ©2013 Ekonnect Knowledge Foundation
  18. 18. Role of Impact Assessment  Encompasses Policy to Practice  Addresses Sustainability at various Tiers  Involves numerous and diverse stakeholders  Harmonizing Impact Assessment will therefore help towards a Global ESG Governance ©2013 Ekonnect Knowledge Foundation
  19. 19. Questions / suggestions ? Email prasad.modak@emcentre.com, prasad.modak@ekonnect.net URL: http://www.ekonnect.net/ ©2013 Ekonnect Knowledge Foundation
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