Middle East, Central Asia, Trkiye, Afghanistan, and Pakistan, IFC Sustainability Resources Brochure 2013, Interpretation Note on Financial Intermediaries. The new IFC Environmental and Social Performance Standards -- in particular, Performance Standard 7 on indigenous peoples -- present a range of management and operational challenges for certain companies. Performance Standard 8: CULTURAL HERITAGE Aims to protect cultural heritage from adverse impacts of project activities and support its preservation. Suggested steps include introducing a no project alternative within the impact assessment, reporting on impacts to all ecosystem services and more effectively considering the cumulative impacts of projects on regional development. This can result in an overall return on investment in a profitable way. The Equator Principles, based on IFC standards, have been adopted by over 70 of the world's largest NGOs. IFC (Industry Foundation Classes) is the data exchange standard used to facilitate interoperability in the building and construction industry. Required fields are marked *. This site uses cookies that are set on your browser to optimize functionality and give you the best possible experience. It is not yet clear how much ICP will differ from the basic consultation process outlined above, although ICP will likely involve a more in-depth exchange of views and information. Currently there are 182 countries belonging to the IFC. Until the IFC releases the Guidance Notes that will accompany the revised Performance Standards, companies face uncertainty regarding when ICP is triggered, and how, exactly, it differs from the baseline consultation that the Performance Standards require. The consultation requirements in the updated Performance Standards are substantially similar to the requirements reflected in the previous version, released in 2006. A year-long revision of the standards is presently under way, with an updated version of the standards expected by January 2011. In addition, they are well embedded as an industry norm for project finance, he says. endstream endobj startxref 32 export credit agencies of the OECD countries benchmark private sector projects against IFCs Performance Standards. The STEP File Analyzeralso supports IFC files and contains a Syntax Checker. IFC Environmental and Social Requirements for FI Clients By applying a comprehensive set of environmental and social performance standards to projects, IFC expects to achieve environmental and social sustainability, which represents an important component of positive development outcomes of projects. As a minimum, this should include the International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability (2012) and National and Local Laws and Regulations 3. Washington D.C.1717 K Street, N.W.Washington, D.C. 20006-5350contact@foleyhoag.comtel: 202 223 1200fax: 202 785 6687, BostonSeaport West 155 Seaport BoulevardBoston, MA 02210-2600contact@foleyhoag.comtel: 617 832 1000fax: 617 832 7000, New York1301 Avenue of the AmericasNew York, NY 10019contact@foleyhoag.comtel: 212 812 0400fax: 212 812 0399, Foley Hoag AARPI153 rue du Faubourg Saint-Honor75008 Paris, France contact@foleyhoag.comtel: +33 (0)1 70 36 61 30fax: +33 (0)1 70 36 61 31. ADD THIS BLOG to your feeds or enter your e-mail in the box below and hit GO to subscribe by e-mail. They are financed from four groups: Binding credit agreements provide opportunities for Equator Principles Financial Institutions to apply specific requirements to clients. hTmLU>}>L*--PP:ggq/1HFIu2-j%#Tmq2;$[08b4Qbd!?{M{= A@2? gy-R|}se$S>:w#Ugvp[.$?v%V%%5D/xYup?TJhU4+n9; s`9.Mxan6D:IT^9!/zb` `hI`0enZ[Pc}i.aT[Bcd`50q2T-TpqwO>fF Th143 Fz]CZ"U=FP^`FK^?8 6?m4&%o3^ jujlT\2(RRBxX^TF/JJn>OU-J/zbOPptxhiWvBql3tiwzzw#h0q?F'D3Yi91eVAV| :Z4 `%\Nf'YUui1%J(gqd|aSj41> Rj"Tb=#)c#KN9)RD&eddlO,USYVD5]9"abXk/E~ To develop and maintain fluid specifications for optimal vehicle performance. IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts. GUARD AGAINST UNFORESEEN RISKS AND IMPACTS Implementing the Performance Standards helps companies identify and guard against interruptions in project execution, legal claims, brand protection, and accessing international markets. The institutions motivation is financial as well as reputational. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%. In many countries, IFC's standards are incorporated in whole or in part into national environmental and social legislation. The Performance Standards provide guidance on how to identify sustainability risks and impacts and are designed to help avoid, mitigate, and manage them as a way of doing business in a more sustainable way. The Performance Standards, in essence, lay out three tiers of community engagement: (1) Baseline Consultation Pursuant to Performance Standard 1, companies are required to have a social and environmental management system ("ESMS") in place throughout the life of each project receiving IFC financing. In addition, investments that do not meet the requirements and are therefore not environmentally and socially optimized may be less profitable than investments with IFC standards. We would appreciate it if each user downloads their own copy of the zip file. Production or trade in alcoholic beverages (excluding beer and wine). 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This initiative commits participating banks to apply the IFCs standards in all project financing deals worth more than $10m. Be based on prior disclosure of information to communities in an accessible format; Document that it has agreed upon a process with the affected community presumably a process through which the community would express its consent or lack thereof; and. .hide-if-no-js { Among other things, IFC provides long-term loans, organises syndicated loans and acquires shares in enterprises. info 'at' hydropower-evolutions 'punkt' com Performance Standard 2: LABOR AND WORKING CONDITIONS Recognizes that the pursuit of economic growth through employment creation and income generation should be balanced with protection of basic rights for workers. The company is supposed to utilize the information gathered in this consultation to mitigate impacts, tailor its implementation, and identify appropriate mechanisms for the sharing of project benefits. Civil Society Letter: www.accountabilityproject.org/jointsubmission, A cavalcade of reports ahead of next week's COP27 meeting in Sharm el-Sheik highlight the scale of the global warming challenge, and how the data needed to take action is in critically short supply, The head of the UN Convention on Biological Diversity is also co-chair of the Taskforce on Nature-related Financial Disclosures. Next. ]; ! 9ygf#F('LEHT#DGHFDjDQOcDhkJ"4F*H"P^KkE^! As part the ESMS, companies must engage in consultation with communities that are subject to risks and adverse impacts from the project, and must respond to concerns raised by those communities. English|Franais|Espaol|Portugus|Trke|||| | IFC Performance Standard 4: Community Health, Safety, and Security. }. As of March 2021, 116 financial institutions in 37 countries have officially adopted the Equator . application of this Performance Standard will vary depending on the type of workers, as follows: Employees: All the requirements of this Performance Standard, except for the requirements under paragraphs 17 and 18, apply Non-Employee Workers: The requirements of paragraph 17 apply 5. There are three in total. With the release of the revised Performance Standards, companies face a number of new questions related to community engagement. While all relevant environmental and social risks and potential impacts should be considered as part of the assessment, PS 2 through 8 describe potential environmental and social risks and impacts that require particular attention. Civil society groups have highlighted a range of additional challenges. These include managing financial intermediary risks and differing stakeholder views on how IFC categorises projects. An official website of the United States government. "Lh_8^Bc10F`!5\^Z/?qcsurR>#!=L$C&`R$rv#/{~a UfM4&Q3oCag\$Jj; t:>(:owYkNgl0|[G4.o3@ )NCD(N4%YQ8:AYzsqyN]I2g`r5Mikps'Uw:I=jZT\I=8rbvXz*ZwbllBjBt8/}JC^!~&6 %%EOF Civil society groups have highlighted a range of additional challenges. Arguably, the biggest strides have been witnessed outside the IFC itself. IFC currently has only a limited number of climate change-related requirements within the performance standards and no requirements for IFC in the sustainability policy, an 18-page open letter released in March by a group of nearly 100 non-profit groups alleges. endstream endobj 237 0 obj <>stream Review of IFC Performance Standards and Sustainability Policy Overview of Key Issues From September to November 2009, IFC is conducting an initial scoping of issues to improve in its updated sustainability policies. Legal | Privacy Statement | Privacy Settings | Downloads | News, info 'at' hydropower-evolutions 'punkt' com. The IFC Exclusion List defines the types of projects that IFC does not finance. It was established in 1956, as the private-sector arm of the World . To implement processes for sustaining ongoing fluid development and quality. OUR PHILOSOPHY and VISION Embrace simple and efficient methods to unlock innovation and improve performance. hVmOF++*})R\/Y[g Presumably, what is required will depend on the process that the company agreed upon with the community. IFC is developed by buildingSMART and is an ISO standard - ISO 16739. The key safeguards management plans and procedures were reviewed against the IFC Performance Standards.. Known as 2012 IFC-Performance Standards, it requiresall project financing from Equator Principle financial institutions to develop a complete Environmental and Social Management Systems, ESMS. . The Performance Standards provide guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way, including stakeholder engagement and disclosure obligations of the client in relation to project-level activities. https://www.nist.gov/services-resources/software/ifc-file-analyzer. (3) Free, Prior, and Informed Consent of Indigenous Peoples. Typical IFC viewers show a visualization of the building represented by the IFC file. IFC Performance Standards The financial institution is required to verify as part of its environmental and social due diligence process that the activities of a client/investee are not on the IFC Exclusion List and comply with applicable national environmental and social laws and the IFC Performance Standards. The NGO critics would like to see IFC phase-out support for fossil fuels. Category A projects have potential significant adverse impacts that are diverse, irreversible or unprecedented. To view or add a comment, sign in, Funding Institutions (over 90) have recognised the Equator Principles, 32 export credit agencies use IFC standards to assess private sector projects. If a non-compliance is found, the IFC will work with the client to bring it back into compliance, and if the client fails to re- establish . To view or add a comment, sign in Category C projects present minimal or no risk. IFC Performance Standards was updated in January 2012. The MoU is a tool to create more capacity for performance standards. The International Finance Corporation Performance Standards (IFC-PS) set minimum requirements in terms of social, environmental, and corporate governance issues in projects primarily located in emerging markets in order to effectively manage related risks. The brand's reputation is also important on the market, allowing the activity to stand out from others, because making the activity more attractive to other, potential investors. Disclaimer: Earlier versions of IFC's environmental and social policies, procedures, and standards are provided as reference material only. Continental Energy Corporation subscribes to the IFC Performance Standards on Environmental and Social Sustainability and is committed to exercising the same standards of evaluation to recognize and provide mitigation measures for environmental and social risks associated with all projects it undertakes in which the IFC or other World Bank Group organization is involved. The IFC Performance Standards and Consultation with Communities, Performance Standards on Environmental and Social Sustainability, U.N. Poor management of non-financial risks damages clients long-term profitability and increases the potential for default. The letter highlights IFCs continued support for oil, coal and other fossil-fuel-intensive projects linked to climate change. The Equator Principles are designed to guarantee a minimum standard and relevant monitoring of the project. The new Performance Standards went into Production or trade in radioactive materials. Luitpoldstrasse 27 Equator Principles: www.equator-principles.com There are options to select which types of IFC entities are processed and to report some of the IFC entity Inverse relationships. Ot-u4AbICh*:0 l;G" \}zp}8K7o0 www.ifc.orgIFC Performance Standards (pdf)IFC-PS Guidance Notes (pdf), Hydropower Evolutions GmbH Webmaster | Contact Us | Our Other Offices, Created May 9, 2011, Updated November 14, 2022, Manufacturing Extension Partnership (MEP), Developing Coverage Analysis for IFC Files, Assessment of Conformance and Interoperability Testing Methods Used for Construction Industry Product Models. The IFC previously required that a company engage in free, prior, informed consultation with indigenous peoples. More than 90 banks and financial institutions have voluntarily adopted the Equator Principles, which are based on IFCs Performance Standards. *F"7kL mk04?F%r z>y8X=w@@5G2U9#H6G]Ay 32/uFJV0Dtgx([,M,GAv&a56|L; }D1ft133k;`bT For its part, the IFC concedes that a number of process challenges exist. Share sensitive information only on official, secure websites. Labor and Working Conditions. Document evidence of an agreement between the company and affected indigenous communities. Supply chain2 issues are addressed in paragraph 18. IFC Sustainability Resources Brochure 2013 Concerns over the social and environmental impacts of its project portfolio led the IFC to devise robust guidelines for its lending practices back in 1998. "Not substantially involved" means that the activity concerned is ancillary to a project sponsor's primary operations. As with any private bank, the IFC has a vested interest in reducing its social and environmental liabilities. Additional filters are available in search. IFCs Performance Standards on Environmental and Social Sustainability have become globally recognized good practice in dealing with environmental and social risk management. Where environmental or social risks and impacts are identified, the client is required to manage them through its Environmental and Social Management System (ESMS) consistent with PS 1. The Equator Principles correlate with IFC standards. six It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making. To learn more about cookies and how we use them, please see our Privacy Notice (available here). The depth of the required consultation is dependent on the specific risks associated with the project, and the concerns raised by affected communities. Reuters Events is part of Reuters News & Media Ltd, 5 Canada Square, Canary Wharf, London, E14 5AQ. It seeks to achieve this through financing large private sector projects. The Guidance Notes are expected to be released in October 2011. "DH'GXK}lswY08Th3f~;;F+3]Y$RW7[o4| Therefore, we have prepared a series of such studies which cover all eight performance standards. The Equator Principles Financial Institutions (EPFI) manages and administers the Equator Principles and is responsible for the development of these principles. The amount of loans usually does not exceed 25% of the total project cost, but obtaining such support significantly increases overall tolerance and confidence in the project. Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals. Performance Standard 4: COMMUNITY HEALTH, SAFETY AND SECURITY Recognizes that projects can bring benefits to communities, but can also increase potential exposure to risks and impacts from incidents, structural failures, and hazardous materials. The revised Standards reflecta number of important changes, particularly on the topic of engaging with communities, with special guidance related to indigenous peoples. Production or trade in weapons and munitions. Another key demand of the civil society group is to include specific reference to international human rights standards, particularly those reflected in the UN Declaration on the Rights of Indigenous Peoples. !w!_w| Lock Gambling, casinos and equivalent enterprises. Reuters Events 2022 | TERMS OF USE | PRIVACY POLICY | ABOUT US | +44 0207 375 7212 |, www.accountabilityproject.org/jointsubmission, We are sliding from climate crisis to climate disaster, says UNEP chief, piercing net-zero froth, In conversation with Elizabeth Mrema, the woman seeking a Paris moment for nature at COP15, Policy Watch: Norway deal with Indonesia a bright spot amid deepening deforestation crisis. Key areas covered by 2012 IFC Performance Standards are: AGVs experienced team of environmental and social impact assessment specialists have assisted a number of projects for Equator Principle financing and investments across the Asia Pacific region. Production or trade in wood or other forestry products other than from sustainably managed forests. 3 Harmful child labor means the employment of children that is economically exploitive, or is likely to be hazardous to, or to interfere with, the child's education, or to be harmful to the child's health, or physical, mental, spiritual, moral, or social development. Production or activities involving harmful or exploitative forms of forced labor. IFC does not finance the following projects: A reasonableness test will be applied when the activities of the project company would have a significant development impact but circumstances of the country require adjustment to the Exclusion List. The following analysis recommends ways to improve IFC's coverage of four key issues: Climate change The IFC Performance Standards in a nutshell Together, the eight Performance Standards establish standards that the client is to meet throughout the life of an investment: IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts IFC Performance Standard 2: Labor and Working Conditions This often results in greater acceptance of the project by local communities and governments, allowing companies to acquire a social license to operate. The 2012 edition of IFC's Sustainability Framework, which includes the Performance Standards, applies to all investment and advisory clients whose projects go through IFC's initial credit review process after January 1, 2012. The principles apply to new projects in all industry sectors. For instance, when are different consultation or consent requirements triggered? This leads to greater credibility of the investment and is the point through which the project often attracts more investors. EPFI only finances projects that meet the principles: IFC - International Finance Corporation is an organisation of the World Bank and a member of the World Bank Group. The agribusiness sector, where environmental and social risks are becoming increasingly complex, is a particular area of concern. Sustainability Criteria The tool encompasses eight sustainability standards: - Risk management - Labor - Resource efficiency - Community Please complete the following equation: * Useful links This site uses cookies that are set on your browser to optimize functionality and give you the best possible experience. Agreements are one of the most important features of the Equator Principles. In the spreadsheet,a worksheet is created for each type of IFC entity in the file. However, there is no way to view all of the entities and their attributes at once. To promote global awareness, availability, and use of IFC-approved fluids. +49-871-96617-400 ]X'_-DM'?.:@ewQz1CJ99:x 0?v.tjp ? These initial safeguard policies were revised in 2006 to form the Policy and Performance Standards on Social and Environmental Sustainability. 0 Once the MoU is signed, a joint work plan will be developed and implemented in the coming years. Known as "2012 IFC-Performance Standards", it requires all project financing from Equator Principle financial institutions to develop a complete Environmental and Social Management Systems, ESMS. Performance Standard 5: LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT Applies to physical or economic displacement resulting from land transactions such as expropriation or negotiated settlements. These standards are adapted by the World Bank as World Bank Performance Standards and used for projects that support private sector organisations such as the International Development Association and the International Bank for Reconstruction and Development. The user can drill down to the individual attributes for a single building object. Copyright 2022, Foley Hoag LLP. Copyright@ 2022 AGV Sustainability All Rights Reserved |. zero The IFC has not yet provided detailed parameters regarding how a company would know that it has obtained FPIC, although the Guidance Notes may do so. The IFC will reveal proposed changes in early June, prompting a further 60-day consultation. The Equator Principles have long been based on the performance standards and related guidelines developed by IFC. H !i@$rq"\A$#/X+0,"H%@l#$O|tg@g`~` (C Investments that do not meet the requirements of the IFC Standards or the Equator Principles at any stage become less attractive to Investors than investments heaving a stamp of approval. The IFC Performance Standards consist of eight separate "Guidance Notes" each one of which is designed to address the environmental and social risks for new project development utilizing IFC or WBG funding in one of eight focus areas: The IFC and the WBG periodically reviews and updates the Performance Standards and the EHS Guidelines. Performance Standards 2 through 8: Specific policy guiding instruments governing . Table 3: IFC Performance Standards, IFC/WB General EHS Guidelines and EverSource Capital ESGMS S. Applicable national, state and local regulations, IFC Performance Standards (2012) and IFC/World Bank Group Environmental Health and Safety (EHS) General Guidelines. s-P(U%5 b`&zm>7`8;z}[j .EL The Equator Principles Association and IFC will join forces to improve banks' capacity to manage environmental and social risks. Microsoft Excel is required to generate spreadsheets. Public disclosure forms another positive feature of IFCs standards. IFC's standards, as a comprehensive approach to environmental and social risk management for private investment in emerging markets, are considered an international benchmark. HW\Ws;@@/6&:E~?U33.k8fqQo>rz~)mqkzi{%y]p;Sr? Projects must also have a grievance mechanism in place through which local communities can submit their concerns. IFC's standards also define the optimization of resource consumption, including water and energy, and the reduction of pollution. The IFC Performance Standards consist of eight separate "Guidance Notes" each one of which is designed to address the environmental and social risks for new project development utilizing IFC or WBG funding in one of eight focus areas: Assessment and Management of Environmental and Social Risks and Impacts. Typical monitoring periods should be sufficient for statistical analysis.SOCIAL Two IFC Performance Standards are related to the social aspects of the proposed project, namely 2 (Labour and Working Conditions ) and 4 (Community Health, Safety, and Security).IFC Performance Standard 2: Labour and Working Conditions recognize that the pursuit of economic growth through employment creation and income generation should be accompanied by protection of the fundamental rights of workers. The Performance Standards may also be applied by other financial institutions. The 2012 edition of IFC's Sustainability Framework, which includes the Performance Standards, applies to all investment and advisory clients whose projects go through IFC's initial credit review process after January 1, 2012. ) or https:// means youve safely connected to the .gov website. While the International Finance Corporations standards are a useful project finance benchmark, they are not immune to criticism. One of the main strengths of the standards is their community engagement requirement. The International Finance Corporation Performance Standards (IFC-PS) set minimum requirements in terms of social, environmental, and corporate governance issues in projects primarily located in emerging markets in order to effectively manage related risks. Almost 70 private banks have so far committed to use the IFCs standards in project assessment. She talks to Terry Slavin about how business is supporting her efforts to achieve an ambitious global biodiversity framework in Montreal in December, Angeli Mehta reports on how more money on the table for countries that show results in curbing tree loss could have a catalysing effect, In the latest issue of The Sustainable Business Review, our columnists analyse some of the latest developments, from the Net-Zero Banking Alliance weakening its language on phasing out fossil fuels, to how the energy crisis is putting the wind in the sails of community energy, ENGIE and Google strike power purchase agreement for Scotland's Moray West offshore wind development project https://t.co/sNI9ROhU5g, Data Collection Keynote: Quality, Comparable and Transparent Data with @OneTrust #SustainabilityReporting #esg #data https://t.co/HSeLsaEpkQ, RT @richardhowitt: I very much look forward to opening @REvents_SustBiz Sustainable Reporting & Communications 2022 tomorrow with https://t.co/vaNcMrdlDP, Brand Watch: Things go badly for Coke, as activists attack COP27 sponsor, ESG Watch: Insurers flex muscles by refusing to finance oil and gas ahead of COP27, Society Watch: Indigenous peoples fear being overshadowed after COP26 moment in the sun, Policy Watch: An unfair COP that will likely fail to deliver for Africa. The Multilateral Investment Agency (MIGA) guarantee is based on IFC standards. Examples of IFC Performance Standards in a sentence. The IFC File Analyzer generates a spreadsheet or CSV files from an IFC file. Adapting projects to meet performance standards has a positive impact on identification and protection against project interruptions, legal claims and provides access to international markets. IFC is the world's largest organisation with a focus on the private sector and emerging markets. Excel 2007 and higher is supported. Implementation of the Standards can help optimize the management of inputs such as water and energy, and minimize emissions, effluents, and waste, leading to a more efficient and cost effective operation. Designated countries are countries that have a sufficient degree of environmental and social management for the Equator Principles, are not subject to independent evaluation by the Association of the Equator Principles, but require a country to be a member of the OECD and a high share of the World Bank's income. Your email address will not be published. 3 Commercial logging operations for use in primary tropical moist forest. This cooperation between the two organisations led to a Memorandum of Understanding (MoU) in Paris in February 2020. Germany, Phone: Clients must also meet exacting disclosure norms, particularly in the extractive and infrastructure sectors. 260 0 obj <>/Filter/FlateDecode/ID[<6405FA8BA7574571B774E536FDC93E25><663AE489823BCC45AAC7E569C98B39F6>]/Index[233 50]/Info 232 0 R/Length 125/Prev 766203/Root 234 0 R/Size 283/Type/XRef/W[1 3 1]>>stream It is estimated that these principles cover almost 90% of project financing in emerging markets. In order to trigger a portfolio shift towards low carbon technologies, IFC should make clear commitments to reduce total emissions according to a set timetable, says Antonio Tricarico from the Italian-based Campaign to Reform the World Bank and a signatory to the letter. IFC Performance Standard 3: Resource Efficiency and Pollution Prevention. Next IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts IFC Performance Standard 2: Labor and Working Conditions IFC Performance Standard 3: Resource Efficiency and Pollution Prevention IFC Performance Standard 4: Community Health, Safety, and Security All financial intermediaries (FIs), except those engaged in activities specified below*, must apply the following exclusions, in addition to IFC's Exclusion List: * When investing in microfinance activities, FIs will apply the following items in addition to the IFC Exclusion List: * Trade finance projects, given the nature of the transactions, FIs will apply the following items in addition to the IFC Exclusion List: 1 This does not apply to project sponsors who are not substantially involved in these activities. IFC Performance Standards: www.ifc.org/EnvSocStandards Currently 105 financial institutions in 38 countries have adopted the Equator Principles. p`D 84034 2.ogether, the eight Performance t Standards establish standards that the client1 is to meet throughout the life of an investment by IFC: Performance Standard 1: assessment and management of environmental and Social risks and Impacts Performance Standard 2: labor and in length. International Organisation for Standardisation. If you are using this software in your own application, please explicitly acknowledge NIST as the source of the software. Attorney advertising. The IFCs review process attributes a risk category to all potential projects. Sc\|v}Ge The IFC Performance Standards on Environmental and Social Sustainability are established and maintained by The International Finance Corporation ("IFC") of the World Bank Group ("WBG"). 3q7 >*?H58jEvjMnWO,0Vq'>.W{c*8sOBkB/ The Performance Standards, in essence, lay out three tiers of community engagement: Pursuant to Performance Standard 1, companies are required to have a social and environmental management system("ESMS") in place throughout the life of each project receiving IFC financing. What's the Business Case for Sustainability? Sign up to receive updates from Continental Energy Corporation. The Equator Principles have long been based on the performance standards and related guidelines developed by IFC. Next IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts IFC Performance Standard 2: Labor and Working Conditions IFC Performance Standard 3: Resource Efficiency and Pollution Prevention IFC Performance Standard 4: Community Health, Safety, and Security Your email address will not be published. (IFC Specifications), Sample Spreadsheet: IFC_File_Analyzer_ifc.xlsx, IFC Resources: buildingSMART,Free IFC software, Common BIM files, IFC Format, IFC Wikipedia. Multiple IFC files can be analyzed at once to compare entity usage. A lock ( The IFC uses the Performance Standards to manage the social and environmental risks and impacts associated with projects receiving IFC financing. The IFC File Analyzer provides this capability by creating a spreadsheet from the IFC file. 1 The IFC standards focus on: If a country has legally imposed standards, those that are more stringent than the IFC apply. Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCB's, wildlife or products regulated under CITES. This site is protected by hCaptcha and its, Assessment and Management of Environmental and Social Risks and Impacts, Resource Efficiency and Pollution Prevention, Land Acquisition and Involuntary Resettlement, Biodiversity Conservation and Sustainable Management of Living Natural Resources. TheIFCFileAnalyzerruns on Windows 7 and higher. In upcoming posts, we will look in more depth at revised Performance Standard 7 and its implications for companies. The main purpouse of the institution is to level out disparities and scale down extreme poverty and improve shared prosperity. establishes the importance of (i) integrated assessment to identify the environmental and social impacts, risks, and opportunities of projects; (ii) effective community engagement through disclosure of project-related information and consultation with local communities on matters that directly affect them; and (iii) the clients management of environmental and social performance throughout the life of the project. OECD export credit agencies and European development finance institutions, for example, feature among the public development financial institutions that reference the use of the standards. The International Fluids Consortium (IFC) was established in 2020 by 11 vehicle manufacturers, to replace the current fragmented regional approach to developing automotive lubricant specifications with a more efficient global system. Secure .gov websites use HTTPS Engine oil development is still one of the most effective ways to improve fuel economy. CSV files are generated if Excel is not installed. This cooperation between the two organisations led to a Memorandum of . Performance Standard 1: ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS Underscores the importance ofidentifying E&S risks and impacts, and managing E&S performance throughout the life of a project. Information about how to use the IFC File Analyzer is available through the Help menu, tooltipsin the software, and the README file. Key areas covered by 2012 IFC Performance Standards are: Broader Range Stakeholder Engagement Download the zip file above. As for climate change and biodiversity, the IFC acknowledges that these issues are important and need attention. The IFC File Analyzer supports IFC2x3, IFC4, IFC4x2, and IFC4x3. From a banking risk perspective, the standards are relatively easily understood. Drift net fishing in the marine environment using nets in excess of 2.5 km. Increased project development obligations, Improved Prevention measures and Resources Management. Official websites use .gov %PDF-1.4 % The spreadsheet is useful to help understand the IFC file format and relationship between the entities and their attributes. The Equator Principles is a risk management framework adopted by financial institutions, for determining, assessing and managing environmental and social risk in project finance. "IFC currently has only a limited number of climate change-related requirements within the performance standards and no requirements for IFC in the sustainability policy," an 18-page open letter released in March by a group of nearly 100 non-profit groups alleges. Funding Institutions whose activities comply with the Equator Principles are a confirmation of responsible environmental and investment management. Save my name, email, and website in this browser for the next time I comment. Note that in case of discrepancies between the original English text and the translated documents, the English text will prevail. display: none !important; Understanding IFC's Environmental and Social Review Process, Find out more about the 2009-2011 Review and Update of the Sustainability Framework, Performance Standards Community of Learning, View the webinar on IFC Performance Standards 101, Interpretation Note on Environmental and Social Categorization, Interpretation Note on Financial Intermediaries, Interpretation Note on Small and Medium Enterprises and Environmental and Social Risk Management. Most notably, IFC Performance Standard 7 now requires that a company seek the free, prior, and informed consent ("FPIC") of affected indigenous peoples. Typical IFC viewers show a visualization of the building represented by the IFC file. The Performance Standards are directed towards clients, providing guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way, including stakeholder engagement and disclosure obligations of the client in relation to project-level activities. endstream endobj 234 0 obj <>>> endobj 235 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC/ImageI]/Properties<>>>/XObject<>>>/Rotate 0/TrimBox[0.0 0.0 432.0 648.0]/Type/Page>> endobj 236 0 obj <>stream s{'hiD;v_W;> "g$u=F~LDEbE;/w_ [G[M-9flREl6v^%hy_C,-v{a9'Hv7@P{ =&H [`E_kAS@G:_ 0 mB The revision aims to clarify language, improve implementation effectiveness and fill gaps in present coverage. IFC has prepared a set of Guidance Notes, corresponding to the Performance Standards on Environmental and Social Sustainability. GAIN AN INTERNATIONAL STAMP OF APPROVAL The Equator Principles, which have been adopted by more than 70 of the worlds leading investment banks in developed and developing countries, are based on IFCs Performance Standards. The 2012 edition of IFC's Sustainability Framework, which includes the Performance Standards, applies to all investment and advisory clients whose projects go through IFC's initial credit review process after January 1, 2012. IFC (Industry Foundation Classes) is the data exchange standard used to facilitate interoperability in the building and construction industry. Registered in England and Wales: 2505735. While the International Finance Corporations standards are a useful project finance benchmark, they are not immune to criticismAs the private sector lending arm of the World Bank, the International Finance Corporation has a mandate to aid development in its 182 member countries. Weaknesses related to supply chain issues have also been identified. Assess an ESMS. The IFC seems to contemplate that the process is not one-size-fits-all and may look different from project to project or community to community, because it will depend in part on the customs of the affected population. These . IMPROVE FINANCIAL AND OPERATIONAL PERFORMANCEIFC believes that meeting the Performance Standards helps clients improve their bottom line. hbbd```b``+ D IFC clients must demonstrate that they have disclosed all relevant project information to affected communities and meaningfully consulted them throughout the project development phase. A full copy of the IFC Performance Standards in force for all new project transactions from 1 January 2012, is available for download here. Specifically, the consultation should: (2) Informed Consultation and Participation. In such instances, a company must conduct an Informed Consultation and Participation (ICP) effort, building on the basic consultation process. Investment banks, which play the greatest role in developed and developing countries, are based on the IFC standards. An important distinguishing feature of IFC's loans is that they do not require government guarantees. Initial social and environmental assessments by IFC clients are notably flawed, the letter says, and assessment requirements should be tightened. IFC's environmental, health and safety focus guidelines are good international practices leading to IFC standards. Stakeholders will be able to see the changes we propose and provide their feedback on how issues such as climate change and biodiversity have been addressed, says Greg Radford, director of environment and social development at the IFC. `-$TOvi'k. The most traction to date has come from the private project finance community. Performance Standard 6: BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES Promotes theprotection of biodiversity and the sustainable management and use of natural resources. The IFC Performance Standards are also applied or referred to through the Equator Principles.. #F-xvd*)c"@KmD@01C9w'kKOPE`D.d[6_SwWm67PP{c!Q8 Adapting the investment project to performance standards is also a tool that can significantly influence public acceptance of the business. = Therefore, the Performance Standard calls on a company to: Performance Standard 7 notes that consent does not always require unanimity. establish objectives and requirements to avoid, minimize, and where residual impacts remain, to compensate/offset for risks and impacts to workers, affected communities, and the environment. IFC's Environmental and Social Performance Standards define IFC clients' responsibilities for managing their environmental and social risks. *#{ " The Multilateral Investment Guarantee Agency (MIGA) applies IFCs Performance Standards in its operations. The IFC Performance Standards help IFC and its clients manage and improve their environmental and social performance through an outcomes-based approach and also provide a solid base from which clients may increase the sustainability of their business operations. In the financial markets worldwide, the Performance Standards have been catalyzing the swift convergence of standards for cross-border project finance. The standards boast some significant successes, however. Category B projects have potential impacts that are limited and generally site-specific. As well as all typical risk scenarios (boycott, protest, negative media, closure, accidents, etc.) Landshut, As discussed in an earlier post, the International Finance Corporation ("IFC") recently released an updated version of its Performance Standards on Environmental and Social Sustainability. A .gov website belongs to an official government organization in the United States. Prior results do not guarantee asimilar outcome. Interpretation Note on Financial Intermediaries. More, Isa Mirza advises governments, corporations, and civil society organizations on a range of federal legislative and regulatory mattersMore, Chris Hart has counseled and represented sovereign nations, Fortune 500 companies, start-up companies, non-profits, and individuals in a wide variety.More, Foley Hoags unique Global Business and Human Rights ractice was launched in 2000 and provides counsel to multinational companies, governments, and More. The EverSource Capital ESGMS aligns with the IFC Performance Standards and EHS Guidelines and therefore review with respect to EverSource Capitals ESGMS has been incorporated into Table 3. These principles are estimated to cover nearly 90% of project financing in emerging markets. Equator Principles (EP) are principles adopted by funding institutions. IFC Performance Standards was updated in January 2012. There are many benefits in meeting all the requirements of the IFC standards. Performance Standard 4 Implementation Resources Good Practice Handbook: Use of Security Forces: Assessing and Managing Risks and Impacts Strategic Community Investment: A Good Practice Handbook for Companies Doing Business in Emerging Markets Addressing Grievances From Project-Affected Communities Introduction to Health Impact Assessment Performance Standard 7: INDIGENOUS PEOPLES Aims to ensure that the development process fosters full respect for Indigenous Peoples. Finally, when indigenous peoples are not involved,the IFC must still define in the Guidance Notes when projects have potentially significant impacts sufficient to trigger an ICP process, rather than a baseline consultation process. Performance Standard 7 acknowledges that the process must involve the indigenous peoples representative bodies. 282 0 obj <>stream IFC is developed by buildingSMARTand isan ISO standard - ISO 16739. To learn more about cookies and how we use them, please see our Privacy Notice (available here). Hydropower Evolutions is committed to meeting the requirements of the IFC Performance Standards in projects where we are engaged. Production or trade in unbonded asbestos fibers. In the absence of an internationally recognised set of environmental risk guidelines, the IFC standards offer a de facto threshold for the finance sector, according to Chris Bray, head of environmental risk management at Barclays. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Drawing on his extensive corporate and public policy experience, Gare A. Smith founded the firms Global Business and Human Rights practiceMore, Shrutih Tewarie is a partner in Foley Hoags Litigation and White Collar departments, and serves as the Co-Chair of the firms Trade Sanctions and Export Controls practice. IFC Performance Standard 2: Labor and Working Conditions. Performance Standard 3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION Recognizes that increased industrial activity and urbanization often generate higher levels of air, water and land pollution, and that there are efficiency opportunities. There is no Linux or macOS version. Enhanced brand value and reputation may also be attractive to new investors or financiers. What processes are adequate to fulfill them? IFC standards, which must be met to ensure the credibility of the investment and to ensure that the loan is granted, are a key tool for identifying and managing environmental and social risks. These Guidance Notes offer helpful guidance on the requirements contained in the Performance Standards, including reference materials, and on good sustainability practices to improve project performance. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where IFC considers the radioactive source to be trivial and/or adequately shielded. 2 Forced labor means all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty. Probably that investments which do not meet IFC standards are less likely to be lent by the Financing Institutions. The investments, which have a net value of more than $25bn, represent a quarter of the total number of projects in the IFCs portfolio. 233 0 obj <> endobj In accordance with its own rules, IFC discloses information relating to its own institutional and investment activities. Production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous Peoples, without full documented consent of such peoples. SOCIAL LICENSE TO OPERATE In addition, the Standards help clients find ways to maximize local development benefits and encourage the practice of good corporate citizenship. A locked padlock The World Bank applies IFCs Performance Standards (known as World Bank Performance Standards) to projects supported by IBRD/IDA (International Bank for Reconstruction and Development/International Development Association) that are owned, constructed and/or operated by the private sector. 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