Transcript IFC – A Strategic Approach for Social and Environmental Sustainability 1

IFC – A Strategic Approach for
Social and Environmental Sustainability
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IFC: A Member of the World Bank Group
International Finance
Corporation, 1956
International Development
Association, 1960
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International Bank for
Reconstruction and
Development, 1945
International Centre for
Settlement of Investment
Disputes, 1966
Multilateral Investment
Guarantee Agency, 1988
IFC’s Mission
To promote sustainable private sector
investment in developing countries,
helping to reduce poverty and
improve people’s lives.
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Mainstreaming Social and
Environmental Issues
New Social and
Environmental Standards
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IFC’s S&E due diligence framework
Exclusion List
8 new Social and Environmental Performance Standards
 Environmental, Health & Safety and Industry Guidelines –
updates soon to be released
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Best Practice and Guidance Notes
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Updated Social and Environmental Review Procedure
questionnaires, appraisal, E&S Review Document, loan
agreement, annual monitoring and supervision
Creating Business Opportunity through Improved Animal Welfare
Addressing the Social Dimensions of Private Sector Projects
Non Discrimination and Equal Opportunity
Managing Retrenchment
HIV/AIDS in the Workplace
Addressing Child Labour in the Workplace and Supply Chain
New Labor Toolkit for Investment Officers
New Biodiversity Guide
Updated Disclosure Policy
New Policy and Performance Standards on Social and
Environmental Sustainability
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IFC introduced new policy and performance standards
on April 30, ,2006
New standards
― fill gaps left by earlier policies
― outcomes orientation
― recognize importance of management systems and
community engagement
― becoming an international benchmark (Equator
Principles)
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Equator Principles
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Voluntary association of private banks (currently 41)
Currently use IFC’s old policies as their principal social
and environment risk management tool. Effective July
1, 2006 the banks will start migrating to the new IFC
Policy and Performance Standards on Social and
Environmental Sustainability
The banks account for over 85% of global project
finance in emerging markets
details available at www.equator-principles.com
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IFC Policy & Performance Standards
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Basis of IFC’s leadership & approach to E&S
sustainability
― Ensure projects financed by IFC are environmentally
and socially sound
― Provide comprehensive risk and opportunities
framework for IFC and its clients
― Can be used to improve project performance
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IFC’s Policy Framework
IFC –
Institutional
Requirements
Implementation
Disclosure Policy
Environmental & Social
Review Procedure
Sustainability Policy
Client –
Project Level
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8 Performance Standards
 8 Guidance Notes
 Environmental, Health &
Safety Guidelines
 Best Practice Materials
8 Performance Standards
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PS 1: S&E Assessment and Management Systems
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PS 2: Labor and Working Conditions
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PS 3: Pollution Prevention and Abatement
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PS 4: Community Health, Safety & Security
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PS 5: Land Acquisition and Involuntary Resettlement
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PS 6: Biodiversity Conservation and Sustainable
Natural Resource Management
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PS 7: Indigenous Peoples
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PS 8: Cultural Heritage
IFC Resources to help clients
Almost 50 social and environmental experts on staff
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Broad range of Technical Assistance and other support for
clients
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approximately 25% are working in field offices (4 in Africa)
provide advice and support during appraisal and supervision
donor funded support through Trust Funds and SME facilities
Social and Environment staff an integral part of IFC team
Walking the Talk
Highlights of IFC Leadership
and Case for Sustainable
Finance
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IFC’s value add
Global experience in sustainable finance –
mainstreaming S&E issues
 Provider of technical assistance and incubator
financing to support new sustainable business
opportunities
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S&E site is the most visited part of the IFC website
after Careers, in May 2006:
visits to CES external website = 11,492
― total number of document downloads from CES external
website = 8,088
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Sustainable Energy
Biodiversity
Cleaner Technologies
Social Responsibility
Sustainable Finance
Carbon Finance
Gender
Responding to climate change challenge
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World Bank Group went carbon neutral on World
Environment Day, June 5, 2006
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offset GHG emissions from DC headquarters and travel from
HQ (field offices next) by investments in renewable energy and
energy efficiency projects
direct and indirect carbon dioxide emissions of approximately
148,000 metric tons = 60 percent from operations and 40
percent from airline travel
First IFC project in Asia – biogas-based power and heat
generation in Korat, Thailand
 IFC now also guaranteeing carbon finance purchases for
European buyers
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IFC supports first FT Sustainable Banking Awards
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Financial Times launches 1st Sustainable Banking Awards, in
association with IFC
― 90 entries from 48 institutions around the world
― HSBC – Sustainable Bank of the Year
― Banco ABN Amro Real of Brazil - emerging markets bank of the year
― WestLB, the German bank - sustainable bankers of the year
― Citigroup, its Mexican arm Banamex and Financiera Compartamos, a
Mexican microfinance provider - sustainable deal of the year for the first
peso-denominated investment grade bond issue to finance loans to poor
entrepreneurs, mainly women in rural areas
― Credit Suisse - sustainable energy deal of the year - for last year's
flotation of Suntech Power Holdings, a Chinese solar energy company, on
the New York Stock Exchange
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IFC’s 2005 Sustainability Report
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Outlines IFC’s response to global challenges
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climate change, poverty, corruption, HIV/AIDS,
participation of women in private sector development,
and the preservation of natural resources
Provides more information than ever before about how
sustainability is integrated into decision-making
throughout IFC's investment cycle
 Presents progress in how IFC manages its own social
and environmental footprint and is leading by example
through its new E&S standards and by promoting the
business case for sustainability among its financial
sector clients
 Adopts the Global Reporting Initiative’s Sustainability
Reporting Guidelines
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The case for sustainable finance
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Protecting the environment and ensuring fair treatment of people and
communities affected by projects is recognized as a fundamental requirement
of long-term economic success
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Increasing activism coupled with ease of access to global communications has
significantly increased the risks presented by poor environmental and social
performance
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Investors now increasingly demand good environmental and social
performance as a condition of investment – growth of SRI funds, Equator
Principles, etc
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Demonstrated business case for good environment and social performance –
positive impacts on costs, market access, risk and reputation