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U.S. Comments on IFC Sustainability Framework 

Changes Proposed by IFC in April 2010 

The United States welcomes the opportunity to comment on the first draft of proposed changes. 

The IFC – and the World Bank Group as a whole – must take the lead in setting a high bar for 

projects with social and environmental impacts. The United States strongly supports greater 

transparency in IFC projects and tougher environmental and social standards that lead to better to 

development results. This paper presents a summary of the United States’ priorities for the 

review.1

 Detailed technical comments are attached. 

Policy on Social and Environmental Sustainability 

Strong social and environmental policies are critical to achieving good development outcomes. 

The United States identifies the following as top priorities for the IFC: 

• Strengthen the Categorization Process

o Determine the categorization decision based on an assessment of pre-mitigation 

impacts and on the most significant (highest) risks/impacts; 

o Establish a publicly available framework for categorization; 

o Disclose preliminary categorization/significant decisions early in the project 

cycle. 

• Strengthen and clarify actions the IFC will take to help its clients address climate 

change

o Collaborate with the broader World Bank Group on host governments’ lowcarbon strategies; 

o Help reduce clients’ corporate carbon footprints; 

o Provide advisory services and annual reporting on total IFC portfolio greenhouse 

gas (GHG) emissions. 

• Broaden extractive industry governance

o Include all IFC EI clients’ contracts with governments, allowing for redaction of 

business confidential information, and inclusion of the disclosure requirement in 

the Performance Standards (see below). 

• Strengthen provisions regarding supervision of Financial Intermediaries (FIs)

o Require performance audits commensurate with the risks of sub-projects; 

o Explicitly include FIs receiving IFC financing in the form of equity, quasi-equity 

or general purpose financing in such audits. 

Performance Standards (PS)

The first four years of implementation of the Performance Standards has shown both strong 

development impact but also room for improvement – both in defining the standards themselves 

and implementation. The United States’ priority changes to the PS are: 

• PS 1 – Assessment and Management of Social and Environmental Risks and Impacts 

o Include an assessment of risks from climate change for climate-vulnerable projects. 

 

1 These comments supplement the USG’s first round of comments, provided in January 2010, available at the

Department of Treasury’s website:  

http://www.treas.gov/offices/international‐affairs/multilateral_banks/jan2010_policy.pdf
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o Broaden the scope of the environmental/social risk and impact assessment process to 

explicitly include: indirect impacts, a “no project” alternative, post-closure 

considerations, broader definitions of associated facilities and cumulative impacts, 

and supply chains where they might have significant risks/impacts. 

o Include all social and environmental risks potentially requiring mitigation, not only 

(as suggested for some issues) the significant risks and impacts. 

o Stronger baseline data requirements; more explicit disclosure of monitoring results. 

o Include EI revenue/payment and contract transparency provisions in PS 1. 

• PS 3 – Resource Efficiency and Pollution Prevention (including Environmental, 

Health, and Safety (EHS) guidelines)

o Include water issues besides consumption, including other types of impacts and 

access to water. 

o Develop EHS guidelines on dams. 

• PS 6 – Biodiversity 

o Projects in critical habitat should be required to have a positive impact on the critical 

habitat, and that projects outside critical habitat have no measureable negative 

impact on critical habitat. 

o No offsets for critical habitat. 

Disclosure Policy

Transparency is critically important to the IFC’s policies and mission. Therefore, we seek: 

• Adoption of World Bank’s Policy on Access to Information 

• Timely disclosure of Environmental and Social Impact Assessments (ESIAs) for projects 

with potentially significant environmental impacts. The IFC should develop an approach 

like that of the Asian Development Bank or the World Bank (IBRD/IDA) that ensures 

ESIAs are disclosed in a timely fashion, at least 120 days before Board decision. Links to 

the ESIAs prepared for FI sub-projects that have the potential for significant impacts should 

be posted publicly. 

• Broadening of development impact reporting. The IFC should expand its commitment to 

report publicly on development impacts of individual reporting to include all projects 

(including FIs). Impacts should be based on a robust set of indicators (general and projectspecific), include qualitative as well as quantitative assessments, and capture both positive 

and negative impacts.

• Enhanced environmental and social reporting. The IFC should disclose supervision and 

monitoring reports on environmental/social issues, including Corrective Action Plans and 

implementation reports for Category B projects.

• Greater disclosure of financial intermediary investments. Disclosure should include the 

assessment of the client’s environmental and social management system and specific 

activities anticipated to have significant risks and impacts.

• Broad community support. The IFC should disclose analysis that provides justification for 

determining broad community support. 

Reporting on IFC plans for implementation

Implementation will be critical to ensure results. Therefore, we recommend that the next draft of 

recommended changes to the Sustainability Policy, Performance Standards and Disclosure 
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Policy be accompanied by IFC plans for implementing the changes. In particular, we 

recommend information be provided on:

o Client commitment to implement the performance standards; 

o IFC oversight to ensure that clients are complying with the Performance Standards; 

o IFC training and capacity building for clients; 

o Risk assessment of the capacities of the client and host country government;

o Collaboration with the broader World Bank group; 

o Verification of client data for key decisions;

o Quality assurance of baseline data and impact analysis – (i) in general; (ii) with respect to 

resettlement and (iii) with respect to critical habitat;

o Staffing and staff incentives, including for improving internal coordination.
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 IFC Sustainability Framework 

U.S. Technical Recommendations/Comments2

August 2010 

I. Generic Issues

• Key terms. Include all definitions in a “key terms” section. 

• Limitation to “significant” impacts. Do not limit risk and impact identification analysis 

to “significant” impacts. 

• Indirect Impacts. Ensure that indirect impacts are included as well as direct impacts, 

using the reference to “direct and indirect” impacts as needed. 

• Reduce vs. Minimize. Use “minimize” instead of “reduce” with respect to impacts. 

• Business Activities and Projects Refer solely to client “business activities,” or explain in 

the Sustainability Policy the relationship between “business activities” and “projects” and 

ensure that the Performance Standards (PS) requirements clearly apply to all types of 

business activities. 

• External Experts. State that experts be both “qualified” and “experienced”. 

• Impacts vs. Risks and Impacts. Change all references to significant “impacts” to 

significant “risks and impacts.”

• FI Performance Standard. Consider a separate Performance Standard on Financial 

Institutions (FIs), following the EBRD’s example.

II. Policy on Social and Environmental Sustainability

IFC’s Commitments 

• Climate change. Proposed text to replace paragraph 9 (or in a separate section on climate 

change): 

“IFC is committed to supporting low-carbon economic development, and sees the Sustainability Policy as 

an important vehicle for IFC to operationalize the 2008 Strategic Framework for Development and 

Climate Change. IFC also recognizes that climate change may place at risk the positive economic and 

social development outcomes of IFC-financed projects. IFC works towards the reduction of greenhouse 

gas (GHG) emissions by supporting the adoption of new and appropriate technologies, processes, 

practices, and products. IFC believes that the private sector has important roles to play in both 

implementing appropriate climate adaptation measures and mitigating GHG emissions. 

IFC will take appropriate actions to address climate change at different stages of the project cycle, from 

pre-appraisal to project implementation, closure and post-closure. At the pre-appraisal stage, IFC’s 

engagement in GHG-intensive sectors in a country will normally occur in the context of national low 

carbon development strategies or plans. In addition, IFC will normally bring forward large GHG-intensive 

projects in the context of broader World Bank Group engagement with the host country in which climate 

considerations have been incorporated into broader sector policies and reforms. 

The IFC will work with clients to help them reduce their corporate carbon footprints, not just for the IFCfinanced operation. To do so, IFC will identify barriers to relevant low carbon investment opportunities. 

Depending on the opportunity, these barriers may include domestic policy distortions, market failures, 

 

2 Page numbers referenced in this document refer to the hard copy of the document prepared for the May, 2010

meeting of the Committee on Development Effectiveness (CODE).
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weak capital markets, country or project risks, etc. Where policy barriers or market failures exist to low 

carbon investment options in the sector in which its client is active, IFC will coordinate with the public 

lending side of the World Bank Group to mobilize appropriate measures address them. These operations 

might include policy dialogue, technical assistance, DPLs, regional approaches or sector wide 

approaches. 

A key aspect to IFC’s approach to climate change is the provision of Advisory Services to its clients on 

the risks of climate change, including options for developing mitigation measures and fostering 

knowledge-sharing among public and private sector entities. As needed, IFC will target financing 

instruments of its own to address climate risks and capture investment opportunities, and will also help 

clients identify and package appropriate financing instruments that might be available from concessional 

sources. 

IFC will prepare and disclose annually the total direct GHG emissions and the total indirect GHG 

emissions, across its active portfolio, from projects that produce above 20,000 tons CO2-equivalent/year. 

The totals will include direct emissions from the facilities owned or controlled within the physical 

boundaries of IFC projects, and the indirect emissions associated with the off-site production of power 

used by IFC projects, required to be quantified in PS3.” 

IFC Roles and Responsibilities 

• Balance of benefits and risks. Include a statement that where the balance of benefits and 

risks is not acceptable, the IFC will not support the proposed project. 

• IFC due diligence. Include a statement that IFC (i) reviews key client decisions, including 

but not limited to the scope of the necessary social and environmental due diligence and 

whether a comprehensive EIA and/or other assessment documents are appropriate; (ii) 

reviews the client-produced documents, such as environmental and social impacts 

assessments or audits and the various required plans, to ensure that they are materially 

complete and meet the requirements of the performance standards; and (iii) works with the 

client to address identified weaknesses. 

• Weak regulatory environments. State that the IFC will exert stronger oversight of projects 

in countries with weak regulatory environments. 

• Community consultation/engagement for brownfield projects. Recommended revised text 

on projects underway: “In these cases, the IFC’s approach is to assess IFC’s approach is, 

wherever possible, to take full consideration of the environmental and social management 

system already in place as well as the social and environmental assessment and community 

disclosure and engagement undertaken by the client and/or any third party before IFC’s 

consideration of the investment.” (para 22) 

• Project-level grievance mechanism. State that IFC will oversee the client’s grievance 

mechanism and assess the need for the CAO to work with people to build capacity. 

 

Broad community support(BCS)/free prior and informed consultation 

• Implementation. Establish publicly available benchmarks and/or minimal standards for 

determining “broad community support.” 

• Information for affected people. Include requirement that clients inform potentially 

affected people about “free, prior and informed consultation” and “broad community 

support” provisions. 

• BCS for Indigenous Peoples. State that IFC will confirm BCS and disclose its rationale 

where “free, prior and informed consultation” is required. 
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Financial Intermediaries 

• Paragraph 28. Proposed revised text: 

“28. IFC’s requirements for FI clients are proportional to the level of risk in the FI’s entire business 

portfolio (current and future):

• All FIs will apply the Exclusion List and follow respective national laws. 

• For FIs with current and/or prospective business activities where the activity financed presents 

some social or environmental risks,1

 the FI will apply the performance standards in accordance 

with paragraph 29. 

• For FIs with current and/or prospective business activities that have minimal or no adverse social 

or environmental risks,2

 the FI is not required to apply the performance standards. 

1

 This would be comparable to Category A and Category B projects. 

2

 This would be comparable to Category C projects.”

• IFC due diligence/supervision. Proposed revised text for paragraph 30: 

“IFC monitors FI client performance on an ongoing basis. Additionally, to determine the effectiveness of 

an FI’s social and environmental management system, IFC may review the process and results of the 

social and environmental due diligence review conducted by the FI for subproject investments under 

credit lines or other targeted finance facility, and also of a representative sample of other FI subprojects

when the IFC financing is through equity, quasi-equity or general-purpose financing, especially 

subprojects with potential significant risks and other high risk subprojects . IFC supervision visits may 

include FI subprojects as well as the FI itself, and frequency and focus of supervision visits will be

commensurate with the identified risks. In higher-risk situations, the IFC may require audits or verification 

reviews by qualified and experienced external experts of (i) the environmental and social performance 

and (ii) the development impact reporting of FI portfolios, which may also include subproject reviews as 

appropriate. IFC will work with its clients to help them address any identified weaknesses, in light of the 

IFC’s ongoing commitment to strengthening client capacity and ownership. 

• Development impact reporting for FIs. Develop standard FI reporting procedures to allow 

development impact reporting on both a portfolio-wide and project-specific basis 

• BCS determination. For subprojects where free, prior and informed consent is required, 

clarify who (IFC or FI client) is responsible for determining that BCS exists and for 

disclosing information on its determination . 

• GN1 para G33. Incorporate the concept of “critical review” (to indicate that it is not just a 

survey) and state that the process includes development of recommendations to address 

shortcomings; state clearly the standards against which the review takes place. 

Categorization and significance decisions. 

• Develop and make publicly available a categorization/significance-evaluation framework 

or guidance, articulating the connection between the category rating and the types of 

projects and factors that are the IFC considers, along the lines of the IBRD’s 1993 

Environmental Sourcebook Update No. 2 (April 1993) or the EBRD’s indicative list of 

Category A projects. 

• Establish quantitative thresholds as part of that framework, where possible, that can be 

used to help determine the category of a project, along the lines of what the EBRD has 

integrated into its indicative list of Category A projects. 
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• State that the risk-based “potential impact” approach applies to projects involving expansion, 

modernization, retrofitting and/or privatization. 

• For financial intermediaries, state that the proposed High-Medium-Low ratings are based 

on the riskiest elements of the portfolio, not on a portfolio average, and that “high” risk is 

defined as an FI where “one or more Category A subproject(s) are likely.” 

• If available, include in the Board document any differences in categorization of the same 

project by different co-financiers. 

• State that the categorization and significance decisions/assessments are based on potential 

pre-mitigation risks and impacts, not on post-mitigation risks and impacts, are based on the 

highest risk impact in the area of influence, and take indirect impacts into account. 

• Clarify that the phrase “largely reversible” in the Category B definition requires time 

frames for reversing the impacts that would not result in significant interim impacts. 

• Define “significant” as follows: “Category A Projects: Business activities with potential 

significant adverse social or environmental risks and/or impacts; that is, with risks and/or 

impacts that are diverse, irreversible or unprecedented.” 

Extractives’ contract and revenue transparency 

• EI contracts. Require clients to disclose contracts between companies and governments, 

with exemptions for the protection of business confidential information. 

• EI revenue. Require companies to disclose all material payments to governments including 

the levels of government. 

• Client requirements. Include the client requirements with respect to contract disclosure 

and revenue transparency in PS1. 

• Proposed text for para 36: 

“When IFC invests in extractive industry projects, IFC assesses the governance risks from these projects, 

including the extent to which the host country has in place functioning systems for transparency and 

accountability with respect to EI revenues, and options for mitigating governance risks. The IFC 

documents and publicly discloses this assessment in the project Board document. Where the balance of 

benefits and governance risks is not acceptable, IFC does not support such projects. IFC also promotes 

transparency of revenue payments from extractive industry projects to host governments and of 

contracts. Accordingly, IFC requires client disclosure as specified in PS1. Clients of IFC extractive 

industry projects will publicly disclose (i) their material payments (including but not limited to royalties, 

taxes, and profit-sharing) to host governments at all levels of government and (ii) their primary contracts 

with governments, with exemptions for the protection of business confidential information. For these 

purposes, contracts include permitting applications and approvals that establish the terms of an EI 

project’s operation.” 

Collaboration with Partners 

• Good/best international practice. Retain the concept of best international practice, not good 

international practice. (para 40, first bullet)
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III. Performance Standards 

PS 1 – Social and Environmental Assessment and Management Plans 

• Mitigation hierarchy. Proposed text: 

o Objective: “To adopt a mitigation hierarchy to avoid, and where avoidance is not possible, to 

minimize reduce, restore, or compensate/offset, in that order, for the risks and impacts to 

workers, Affected Stakeholders and the environment;”

o Para 14: “The mitigation hierarchy to address identified risks and impacts will favor the 

avoidance of impacts over reduction, restoration or compensation/offset, wherever technically 

and financially feasible. is to avoid, minimize, restore or compensate/offset risks and impacts, in 

that order. The client will avoid adverse risks/impacts, where possible; minimize risks/impacts as 

the next option; restore pre-impact conditions when both avoidance and minimization are not 

possible, and offset and/or compensate for residual impacts as a last resort.”

• Replacement of “assessment” terminology with “identification” terminology. Change all 

references to the “risk and impact identification process” to the “risk and impact assessment

process” or the “risk and impact identification/assessment process” and clarify that 

“assessment” includes the potential nature, magnitude, severity and duration of potential 

impacts. 

• “Significant” limit for new issues (footnote 7). Proposed text for footnote 7 to para 6: “7. 

Relevant risks and impacts to consider and identify include, if reasonably expected to be significant, 

among others, those The risks and impacts assessment process will include risks and impacts that 

potentially require mitigation relating to climate change, human health, human rights, gender 

differences, ecosystem functions, and access to water resources.” 

• Comprehensive EIAs for significant impacts. Retain the requirement for a comprehensive 

EIA for projects with potential significant impacts. Proposed text: “Projects with significant 

adverse risks and impacts -- that is, risks and impacts that are diverse, irreversible, or 

unprecedented -- will have comprehensive social and environmental impact assessments.” 

• Definition of significance for clients. State that the IFC definition of significance should 

be used by clients. 

• Quality Assurance/Baseline data. Proposed text for para 6: “The scope of the risks and 

impacts identification process will be consistent with good international best industry practice, and 

will determine the appropriate and relevant methods and assessment tools.... The risks and impacts 

identification process will be based on up to date (that is, reflecting current conditions) recent social 

and environmental baseline data at the an appropriate level of detail.9 necessary to assess the 

potential project impacts, collected over sufficient time to record variations in environmental 

receptors and biodiversity (including diurnal, seasonal and year-to-year variations)”. Delete 

footnote 9. 

• Indirect impacts. State that the risks and impacts process include indirect impacts. 

Recommended text: “The process will consider all relevant direct and indirect social and 

environmental risks and impacts of the projects....”  

• Consideration of Affected People. Recommended revised text: “the process will consider ...

the impacts on, and the views and concerns of communities and people likely to be affected.” (para 

6)

• Scoping. State that the scoping of the potential risks and impacts should include 

consultation with affected communities. (para 6) 
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• Trans-boundary impacts. State in the Performance Standards that the client is required to 

inform other affected countries where there are transboundary receptors. (para 6) 

• Project vulnerability to climate change. Clients should the potential impacts of climate 

change on a project and the vulnerabilities of a project to climate change. This assessment 

could be incorporated as part of the environmental and social impact process, although its 

focus is different (see proposed text), and disclosure, monitoring, etc., would be covered by 

existing requirements. Alternatively, if this cannot be incorporated in the 

environmental/social risks and impacts identification/assessment process, it should be 

separately required with clear requirements regarding consultation, inclusion in management 

plan, disclosure monitoring, etc. 

o Proposed text: “The risks and impacts identification/assessment process will include 

assessment of all relevant climate-related risks that would impact the operation and 

viability of the project.” (potentially between paras 6 and 7) 

• Associated facilities. Broaden the definition of “associated facilities”, consistent with the 

Inter-American Development Bank, to a one-way definition where the facility in question is 

essential for the MDB-financed project to function (or, in the IFC’s terminology, the client’s 

project would not be viable without the existing facility) and include modifications and 

expansions of existing facilities to service the IFC-financed project. Proposed text (para 7): 

“Associated facilities are defined as those new facilities, including modifications and expansions of 

existing facilities, that would not be constructed if the clients’ project did not exist and where the client’s 

project would not be viable without the other facility.11 Associated facilities may be funded, owned, 

constructed and operated separately.12 11 Examples include but are not limited to railways, roads, power plants or transmission lines, pipelines, utilities, warehouses, 

and logistics terminals, and production and processing facilities for inputs.” 12 Clients are also encouraged to include any other third party facilities that are essential for the successful operation of the 

business activity.” 

• Cumulative impacts. Expand the definition to include impacts of all “reasonably 

foreseeable” activities in the area, not “realistically defined” developments, and add detail 

on the scope of cumulative impacts. Proposed text: “Areas potentially affected by direct and 

indirect cumulative impacts... and other developments that are reasonably foreseeable realistically 

defined at the time of the risks and impacts identification/assessment process. The scope of 

cumulative impacts will include temporal, spatial and geographic boundaries that are resource 

receptor specific. ” (para 7 bullet 3)

• Supply chains in area of influence. Add an additional bullet “supply chains as required by 

PS1, PS2 and PS6” in the definition of area of influence. (para 7) 

• Alternatives analysis. Include an analysis of project alternatives. Proposed text: “The risk 

and impact identification/assessment process will include an analysis of project alternatives, 

including the “no project” alternative, and documentation of the rationale for selecting the particular 

course of action proposed. The analysis will consider alternatives in light of the mitigation hierarchy, 

including low-carbon alternatives. Alternatives analysis will include cumulative impact analysis of 

various alternatives, where relevant, and should allow for side-by-side comparison of the benefits 

and risks of the alternatives.”

• Post-closure. Include post-closure activities. Proposed text: “and decommissioning or closure, 

and post-closure.” GN1 G17 would include “and decommissioning, and closure and postclosure and...” (para 8) 

• Post-closure – specifics. Specify that closure/post-closure plans provide a full and realistic 

characterization of closure/post-closure requirements and that closure/post-closure plans be 
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incorporated in the client’s ESMP/Action Plans and be updated as needed. These plans 

should pay particular attention to perpetual care situations, including the periodic 

reconstruction of facilities in perpetuity and the periodic replacement of control and 

monitoring infrastructure 

• Segmentation. When projects are segmented, require that the timeframe for environmental 

and social impact assessment of a project be the likely useful life of the project and the 

associated post-closure period and pay particular attention to assessing the potential negative 

cumulative impacts over time and to government capacity to oversee the project and manage 

risks. 

• Supply chains. Proposed revised text: “The impacts associated with supply chains will be 

considered in the risk/impact identification/assessment process where when (a) the resource utilized 

by the project is ecologically sensitive or impacts ecologically sensitive systems or areas and/or (b) 

there is a potentially significant negative environmental or social impact as a result of supplying the 

project. (See also PS2, para 24, and PS6, para 25.)” Define “ecologically sensitive.” (para 9) 

• Emergency preparedness. Include a requirement or guidance note that for dams, clients 

evaluate “reservoir induced seismicity” (RIS) as part of their emergency assessment/ 

planning. 

• Stakeholder engagement. Proposed text: “projects with few stakeholders and/or limited impacts

will need a limited engagement plan.” Update the Stakeholder Engagement Handbook to 

provide more specific guidance linking form of disclosure to project risks. (para 24) 

• Other Disclosure. Proposed revisions to para 26 on access to information: 

o “The client will publicly, including locally in hardcopy, disclose the 

corresponding relevant document(s),” 

o add that the client is also encouraged to disclose its full ESMP. 

o add a new (iv), the Action Plan (previewed in para 17). 

o delete “and in any event before the project construction begins” so the disclosure 

timing requirement is simply “early in the project cycle,” as for consultation. If 

the intent is to address projects where the IFC is brought in after the beginning of 

the project cycle, we recommend a separate sentence, which should be consistent 

with any similar language on stakeholder engagement and consultation. 

o GN1 G96. Insert “As a minimum, the client should disclose the relevant 

information, including the relevant documents, related to the assessment process 

and the proposed management system...” or “such disclosure may range from 

disclosing, at a minimum, the draft Environmental and Social Assessments....” 

• Grievance redress mechanism. Include a provision for a grievance to be filed without the 

filer’s identity being made public, to address instances where project-affected people are 

afraid to speak out and include a requirement that the grievance redress mechanism be 

culturally appropriate and adapted to the communications challenge the Affected 

Stakeholders may face (e.g., language, low level of literacy, no access to technology), as 

discussed in G105. 

• Reporting to Affected Stakeholders, including on Monitoring. Proposed revised text: “In 

addition, clients will publish periodic reports on monitoring results with a frequency proportionate to 

the concerns of affected people but no less than annually and in a format accessible to affected 

stakeholders, and are also encouraged to publish periodic reports accessible to all stakeholders on 

their environmental and social performance and implementation of any environmental and social 

management plans.” (para 30)
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• Monitoring reports/data disclosure: Require that monitoring reports disclose 

comprehensive, detailed data, not only statements of “no violation of standards” to allow 

interested parties to review data for trends that might indicate early-stage problems. 

• Community participation in monitoring. Develop guidance notes on including affected 

stakeholders in monitoring and/or plan to address this in the Stakeholder Engagement 

Handbook. Proposed revised text: “consider: “Where appropriate, clients will consider

involveing representatives...” (para 34) 

PS 2 – Labor and Working Conditions

• Exclusion list. Revise the Exclusion List to reflect the more stringent definitions of 

forced labor/harmful child labor used in PS 2. 

• Workers’ organizations. Delete “unduly,” as it implies that some unspecified degree of 

employer influence or control is acceptable. Proposed revised text: “The client should not 

seek to unduly influence or control these means.” (para 12) 

• Supply chains. Proposed revised text: “The adverse impacts of supply chains will be 

considered given particular attention where there is a high potential risk....” (para 24). 

• Work force elimination. Reinsert the word, “significant” in reference to elimination of 

work force. Deletion of “significant” could theoretically allow the dismissal of a single 

worker to trigger an analysis 

• Prison labor. Proposed revised text for G64 since the ILO standard does not require 

equivalence, and wages to incarcerated workers might have different deductions, 

including restitution to workers: “which approximates or is equivalent to...”

PS 3 – Pollution Prevention and Abatement (including EHS) 

Mining 

• Mining EHS Guidelines. Add the “Environmental Code of Practice for Metal Mines, 

20093 to the list of sources. 

Water

Requirements concerning impacts on water. Proposed revised text for paragraph 9:

“In addition to applying the resource efficiency requirements of this Performance Standard, the client will 

include consideration of water issues in the risks and impacts identification process, and will implement 

measures in accordance with the mitigation hierarchy. In doing so, the client should demonstrate that 

measures to avoid or minimize project-related water consumption and impacts on water are evaluated 

(using current baseline data) and incorporated in the design and operation of the project, particularly in 

water stressed areas or for water-sensitive uses. Analysis will include water supply, water quality, water 

consumption, water-dependent downstream eco-systems and aquifers, water-dependent livelihoods 

including flood-recession agriculture, exposure to water-based public health risks, and affordability and 

access to water and sanitation services (including cost of service and distribution), and will be technicallybased where possible. 

 

3

 1/MM/17, Mining Section, Mining and Processing Division, Public and Resources Sectors Directorate, 

Environmental Stewardship Branch, Environment Canada
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Where relevant, the client will address issues pertaining to variations in water supply, including the 

maintenance of ecological flows. Where flood recession agriculture or flood-dependent ecosystems 

occur, planned mitigation includes artificial flood releases of adequate size and duration to continue 

supporting ecosystems (including fishery migrations) and population requirements. Large daily 

fluctuations in river levels is also to be adequately mitigated to ensure continued ecosystem functioning. 

9. When the project has client is a potentially significant water-related impacts (consumerption or other), 

of water, in addition to applying the resource efficiency requirements for this performance standard, the 

client shall adopt measures that avoid or reduce water usage and/or other impacts on water to ensure so

that, at a minimum, the project’s water consumption does not have significant post-mitigation adverse 

impacts upon others. These measures include, but are not limited to, the use of additional technically 

feasible water conservation measures within the client’s operations, the use of alternative water supplies, 

water consumption offsets to reduce total demand for water resources to within the available supply, and 

evaluation of alternative project locations.” 

GHG emissions. Proposed revised text to broaden the requirement to quantify indirect 

emissions; require explicitly an analysis of low-carbon alternatives and specific measures to be 

implemented; and clarify that offsets are a last resort:

“8. For projects that are expected to or currently produce more than 20,000 tons of CO2-equivalent 

annually, the client will quantify direct emissions from the facilities owned or controlled within the physical 

project boundary,8

 as well as indirect emissions associated with the off-site production of energy9 used by 

the project and, where feasible, emissions from projects that result in changes in plant cover, loss of subsurface carbon, or decay of organic matter. Quantification of GHG emissions will be conducted by the 

client annually in accordance with internationally recognized methodologies and good practice.10 [or 

WBG methodology if one is developed]. In addition, the client will evaluate technically and financially 

feasible and cost-effective options that in the aggregate reduce or offset project-related GHG emissions, 

and will incorporate appropriate measures in during the design and operation of the project. These 

options may include, but are not limited to, supply or demand side energy efficiency improvements, the 

use of renewable energy sources or other low carbon fuels, changes in agricultural/forestry/livestock 

production practices, reduction of fugitive emissions and the reduction of gas flaring. The client will 

document its analysis of the options considered and the specific measures chosen to be implemented. 

These options may include, but are not limited to, carbon financing, energy efficiency improvement, the 

use of renewable energy sources, alterations of project design, emissions offsets, and the adoption of 

other mitigation measures such as the reduction of fugitive emissions and the reduction of gas flaring. In 

accordance with the mitigation hierarchy, the preferred options are to avoid or minimize GHG emissions

within the project’s or client’s corporate footprint. If no such options are feasible, the client should 

consider the acquisition of internationally-certified emission offsets. Clients’ actions to address GHG 

emissions will be commensurate with the project’s level of emissions.

PS 5 – Land Acquisition and Involuntary Resettlement 

• Introduction/scope. Insert “land acquisition or restriction on land use” in the first 

sentence to be consistent with the rest of PS5. 

• Natural resources. Clarify in an appropriate place (or places) that “natural resources” 

includes not only natural resources on land but also freshwater and marine natural 

resources. 

• Resettlement as an opportunity to promote development. Add a new objective, with 

related PS and GN text, that “involuntary resettlement will be used as an opportunity to 

promote the development of the displaced people” Consistent with the ADB Safeguard 

Policy Statement, Appendix 2). Proposed text: 
10

Involuntary resettlement should be conceived of and executed as part of a development project or 

program and include appropriate benefit-sharing. The client will develop and implement resettlement 

action plans as part of a broader development program in which displaced people are provided 

opportunities to share in project benefits. The borrower/client will provide assistance such as credit 

facilities, training and employment opportunities so that they can improve, or at least maintain, their 

livelihood. Borrowers/clients are to ascertain specific opportunities for engaging affected personas as 

project beneficiaries and to consider how to spread such opportunities as widely as possible among 

affected person in the resettlement plan to share project benefits in addition to providing compensation 

and resettlement assistance. 

• Economic and financial analysis. Include in an appropriate place a requirement for 

economic and financial feasibility analysis and sensitivity analysis as the basis for clientproduced Resettlement Action Plans/Compensation Plans and corresponding 

Frameworks. 

• Private sector projects. Delete the phrase “in private sector projects” in the chapeau of 

para 5. 

• Other project situations. Proposed last sentence in para 7: “This may includes projectrelated restrictions on access resulting from the creation of biodiversity offset areas or legally 

designated buffer zones, and restrictions on freshwater and marine environments.”

• Significantly adverse impacts – client requirement. Remove the client discretion in the 

last sentence of paragraph 8 by dropping the word “consider,” consistent with the GN6, 

G13 text stating that, “If these impacts become significantly adverse at any stage of the 

project, so that the relevant communities are left with no alternative except to resettle or 

become economically displaced, the client should apply the requirements of Performance 

Standard 5, even where no initial project-related land acquisition was involved” and 

revise G13 text to, “even where no initial project-related land acquisition or land use restriction

was involved.” 

• Significantly adverse impacts – livelihood restoration. Adopt the requirement, 

consistent with the Asian Development Bank, that in the case of significantly adverse 

impacts from activities other than land acquisition and restriction on land use, the 

borrower/client will be required to develop and implement a management plan to restore 

the livelihood of affected person at least to pre-project level or better. 

• Acquisition. Clarify the phrase, “The acquisition of land and related assets...” as it 

doesn’t make sense to prohibit the client from acquiring land prior to paying 

compensation, but it is important not to move resettled people prior to certain other 

requirements being fulfilled. (para 10)

• Verification. Require verification of actions prior to actually resettling people. Proposed 

text: “Moving people to new locations may happen only after compensation has been paid and, 

where applicable, resettlement sites and moving allowances have been provided to the displaced 

persons,14 and these payments/provision has been confirmed by the IFC/ lender.” (para 10)

• Periodic monitoring/evaluation. Require clients to establish procedures “to monitor and 

evaluate periodically the implementation of the Resettlement and/or Compensation plans 

...” (para 15)

• Completion audits. Require completion audits for all projects with significant 

involuntary resettlement; include consultation with the affected people, to ensure that 

their views are taken into account in the evaluation of the effectiveness of the 

rehabilitation measures ; specify that it is the auditors’ judgment that mitigation is 
11

complete; and specify the client responsibility for addressing any shortcomings. 

Proposed new last sentence: “If the completion audit reveals shortcomings in achievement of 

the desired goals, the client will address the identified shortcomings.” 

• Completion of mitigation. Delete the standard for completion of mitigation of economic 

displacement in paragraph 22 since it is weaker than the one in paragraph 10. 

PS 6 – Biodiversity Conservation and Sustainable Natural Resource Management 

• Ecosystem services definition. Include in the definition of ecosystem services provisioning, 

regulating and cultural and supporting services, consistent with the Millennium Ecosystem 

Assessment definition cited in GN1 G54; do not limit the definition (as in footnote 1) to the 

first three concepts. 

• Scope of impact assessment. Delete phrases limiting the scope of ecosystem services 

considered, such as “critical,” “priority,” “major threats to” and “significant”. (Sample 

references to these terms are in PS1 paras 3, 6, 5 and PS1 footnote 7, respectively.) 

• Assessment focus. Focus the impact assessment on all ecosystem services and delete 

language limiting consideration to ecosystem services of particular concern only to the 

project or the Affected Stakeholders. 

• Risks and Impacts Identification Process. State that the risks and impacts identification 

process include “direct, indirect and cumulative project-related impacts” and that “Baseline 

data to assess impacts should be of sufficient duration to record variations in biodiversity 

(including diurnal, seasonal and year-to-year variations).” (para 4)

• External experts. Have independent, qualified and experienced external experts assist in the 

identification of ecosystem services impacts and determination of response. (para 5)

• Reference to mitigation hierarchy. Use the PS1 definition of the mitigation hierarchy 

verbatim (to avoid confusion) and delete references to “significant”. (para 8, footnote 5) 

• Examples of Modified Habitat. Rephrase to clarify that any habitat can be modified. 

Proposed text: “Any type of ecosystem or habitat can be modified. Examples of modified habitats 

include, but are not limited to, agricultural areas, forest plantations, reclaimed coastal zones, and 

constructed wetlands.” (para 9) 

• Offsets in Modified and Natural Habitat. Include a general statement that offsets should 

achieve positive biodiversity gains, and specify the following requirements for offsets in 

modified and natural habitat, based on the work of the Business Biodiversity Offsets 

Programme (BBOP).4 These principles are based on extensive field and policy experience 

in offsets and strive to provide a basis for the design and implementation of biodiversity 

offsets in order to maximize the benefit and minimize potential negative impacts of offsets 

for biodiversity and local communities. Proposed text for a new para 14: (with a crossreference in para 10): 

1.) “Law and Conventions: Offsets should be designed and implemented to comply with all 

relevant national and international law and in accordance with the Convention on 

Biological Diversity and its ecosystem approach as articulated in National Biodiversity 

Strategies and Action Plans. 

2.) No Net Loss: Offset should be designed and implemented to achieve in situ, 

measureable conservation outcomes that can be expected to result in no net loss and 

preferably a net gain of biodiversity within the project area of influence. (Note: Requiring 

 

4 Principles derived from the Business and Biodiversity Offsets Programme (BBOP) Biodiversity Offsets Design

Handbook (www.forest‐trends.org/biodiversityoffsetprogram/guidelines)
12

a ‘no net loss” at the international, national, regional level is probably beyond the 

manageable control of either the IFC or the client.) 

3.) Additional Conservation Outcomes: Offset should achieve conservation outcomes above 

and beyond results that would have occurred if the offset had not taken place. 

4.) Adherence to the Mitigation Hierarchy: Offset is a commitment to compensate for 

significant residual adverse impacts on biodiversity identified after appropriate avoidance, 

minimization and on-site rehabilitation measures have been taken according to the 

mitigation hierarchy. 

5.) Limits to What Can be Offset: There are situations where residual impacts cannot be fully 

compensated for by a biodiversity offset because of the irreplaceability or vulnerability of 

the biodiversity affected. 

6.) Landscape Context: Offset should be designed and implemented in a landscape context 

to achieve the expected measurable conservation outcomes taking into account available 

information on the full range of biological, social and cultural values of biodiversity and 

supporting an ecosystem approach. 

7.) Stakeholder Participation: In areas affected by the project and by the offset the effective 

participation of stakeholders should be ensured in decision-making about offsets, 

including selection, design, implementation, monitoring and evaluation. 

8.) Equity: Offset should be designed and implemented in an equitable manner, meaning 

the sharing among stakeholders with special consideration for indigenous peoples and 

local communities, of the rights and responsibilities, risks and rewards associated with a 

project and offset in a fair and balanced way respecting legal and customary 

arrangements. 

9.) Long-Term Outcomes: The design and implementation of the offset should be based on 

an adaptive management approach with the objective of securing outcomes that last at 

least as long as the project’s impacts and preferably in perpetuity. 

10.) Transparency: The design and implementation of the offset, and communication of its 

results to the public should be undertaken in a transparent and timely manner. 

11.) Science and Traditional Knowledge: The design and implementation of an offset should 

be a documented process informed by sound science and traditional knowledge.” 

• Offsets and Indigenous People. Clarify the meaning of “respect” in footnote 10. Proposed 

text: “During offset development, clients will respect ensure that proposed offset does not impinge 

on the ongoing usage of the proposed offset by Indigenous Peoples or traditional communities.” 

(para 13 bullet 2)

• Offset banking. Delete reference to offset banking as there are no credible systems.

• Offsets in critical habitat and legally protected and designated areas. Delete references to 

offsets in critical habitats since critical habitats are, by definition, not offsettable. (para 16)

• Paragraph 15: 

o We question whether the focus on a single criterion and the ecological processes 

supporting it sufficiently captures the nature of critical habitat as a complex ecological 

system. 

o Regarding the second bullet, we doubt that, in general, that the necessary up-to-date data 

are available for assessments of reduction of global, national or regional populations over 

time. 

o Regarding bullet 3, any biodiversity monitoring program should be accompanied by a 

robust companion structure for applying the biodiversity monitoring data and findings, in 

a timely manner, for decision-making to support the conservation and management of 

biodiversity. 

o Regarding bullet 4, see comment on bullet 1. 
13

• Definition of critical habitat. Critical habitat should be “important” to the various species, 

not “significantly important.” State that it can be outside legally protected and designated 

areas and should include sub-species where appropriate and species that are vital to the 

ecosystem as a whole . 

• No impacts from other projects. We recommend a “no adverse impact on critical habitat” 

standard for projects outside critical habitat. 

• Legally protected and designated areas (LPDAs). Require that the paragraph 12 and 13 

provisions apply to those LPDAs that are natural habitats, require that the paragraph 15 

provisions apply to those LPDAs that are inherently critical habitat or close to it (viz. IUCN 

Categories Ia, Ib or II or the biodiversity purpose), and establish additional requirements 

related to the legal nature of these areas. 

• Being sustainable and supporting the management plan. Require that proposed activities 

in LPDAs be ecologically sustainable and support the area’s management plan or, in the 

absence of a management plan, the objectives determined by the responsible natural 

resource, protected area, or wildlife agency. 

• Proposed text, reflecting changes from the IFC’s proposed text and also drawing on EBRD’s 

2008 Environment Policy: 

 

Critical Habitat 

14. Critical habitat is a subset of both natural and modified habitat that deserves particular attention. 

Critical habitat includes areas with high biodiversity value, including areas with the following criteria: (i) 

habitat of significant importantce to Critically Endangered and/or Endangered species, endemic and/or 

restricted-range species and subspecies, and globally significant concentrations of migratory species, 

and/or congregatory species; ; (ii) areas with regionally unique and/or highly threatened ecosystems; and

(iii) areas which are associated with key evolutionary processes; and (iv) species that are vital to the 

ecosystem as a whole . Critical habitat can include areas that are not being protected or managed, and 

may be outside legally protected and designated areas. Critical habitat may exist where the habitat’s 

ecosystem functions or species rely on or provide connectivity with other critical habitat, including legally 

protected critical habitat areas. Projects in critical habitats downgraded merely for the purpose of 

allowing the project to proceed will not be financed.

15. Critical habitat shall not be degraded. In areas of critical habitat, the client will not implement any 

project activities unless the following requirements are met: 

• The proposed activity supports conservation of the critical habitat, or the proposed activity in 

some other manner has a clearly positive environmental impact on the critical habitat. The client 

will document the positive impact.

• If the critical habitat is (or is in) a legally protected or designated area, the requirements of 

paragraph 17 also apply. If the critical habitat is not in a legally protected or designated area, but 

nevertheless is subject to a management plan or objectives from a natural resource/wildlife 

agency, the project supports that plan or objective. 

• The client documents, through baseline data and analysis, that tThere are no measurable 

adverse impacts, or likelihood thereof, on the critical habitat. on the criteria for which the critical 

habitat was designated and on the ecological processes supporting that criteria

• The project is not anticipated to lead to a net reduction in the global or national/regional 

population of any Critically Endangered or Endangered species over time

• The client has implemented a robust biodiversity monitoring program and a robust companion 

structure for applying the biodiversity monitoring data and findings, in a timely manner, for 

decision-making to support the conservation and management of biodiversity. 

• Any lesser Any potential negative impacts are avoided or minimized in accordance with the 

mitigation hierarchy, which for critical habitat should focus on avoidance and does not include 
14

offsets, to meet the “no measurable adverse impact” requirement above. mitigated in accordance 

with paragraph 8.

• The client establishes an environmental/biodiversity management plan, includes measures to 

improve the management of the critical habitat, where necessary, supports the conservation of in 

situ biodiversity, and supports the areas management plan/objectives, if any.

• Compliance with any due process required under international obligations or domestic law that is 

a prerequisite to a country granting approval for project activities in or adjacent to a critical habitat 

has been complied with. 

16. In areas of critical habitat, biodiversity offsets will be designed to achieve net positive gain of the 

relevant criteria described in paragraph 14 of this Performance Standard. Projects outside critical habitat 

will have no measurable adverse impact on critical habitat. 

Legally Protected and Designated Areas 

17. Legally protected and designated areas are those areas legally protected for the protection and 

conservation of biodiversity, or areas proposed by governments for such designation, including 

internationally designated areas. Legally protected and designated areas include IUCN Protected 

Categories (I-V), including marine areas, and established corridors between such sites; Key Biodiversity 

Areas (KBAs); wetlands designated under the Convention on Wetlands of International Importance (the 

Ramsar Convention), also known as Ramsar Wetlands; UNESCO World Heritage Sites; and UNESCO 

Man and the Biosphere Reserves. 

17bis. Legally protected and designated areas have differences among them that require different 

treatment. Proposed projects in areas of critical habitat within a legally protected and designated area, 

and in any legally protected and designated area (including marine areas) with the management objective 

to protect or conserve biodiversity and/or with management objectives as described for IUCN Categories 

Ia, Ib and II, including marine areas, such as KBAs and Ramsar Wetlands, will meet the requirements of 

paragraph 15 (for critical habitat). Proposed projects in all other legally protected and designated areas 

will meet the requirements of paragraph s 12 and 13 (for natural habitat). A project proposed to be 

located in a legally protected and designated area may include both critical and non-critical habitat in its 

sphere of influence and therefore be subject to the provisions of paragraph 15 and paragraphs 12/13 in 

the respective habitats. Projects in areas that were degazetted or their protected status down-graded for 

the mere purpose of allowing the project to proceed will not be financed. 

17ter. In addition, when a proposed project would be located within a legally protected or designated 

area11 or an internationally designated12 area, the client, in addition to the applicable requirements of 

Paragraphs 12, 13 and 1513 above, the client will: 

• Demonstrate that the proposed activity supports the area’s management plan or, in the absence 

of a management plan, the objectives determined by the responsible natural resource, protected 

area, or wildlife agency. 

• Demonstrate that the proposed activity is ecologically sustainable. 

• Demonstrate that any proposed development in such areas is legally permitted 

• Act in a manner consistent with any government recognized management plans for such areas

• Consult protected area sponsors and managers, local communities, Indigenous Peoples and 

other key stakeholders on the proposed project, as appropriate 

• Implement additional programs, as appropriate, to promote and enhance the conservation aims 

and effective management of the protected or designated area. 

11 Includes areas proposed by governments for such designation. 12 This includes UNESCO World Heritage Site, UNESCO Man and the Biosphere Reserves, Key 

Biodiversity Areas (KBAs) and wetlands designated under the Convention on Wetlands of International 

Importance (the Ramsar Convention).

13 If the primary management objectives of the legally protected or designated area are comparable with the 

management objectives as described for IUCN Management Categories Ia, Ib and Category II when these areas are 

designated for the protection or conservation of biodiversity.
15

• Footnote 8. In footnote 8 to para 12 change the definition of significant conversion or 

degradation to include (i) short-term change that could have substantial and lasting impacts 

and (ii) the results from small, incremental cumulative impacts, if significant. 

• Plantations and Natural Forests. Proposed text: “will not cause any conversion or degradation 

of critical habitat or areas identified as High Conservation Value (HCV), including any adjacent or 

downstream critical habitat and HCV.” (para 23) 

• Plantation location. Proposed text: “Where feasible, the client will locate plantation projects on 

highly modified habitat or significantly degraded lands.” (para 23) 

• Supply chains. Proposed text:

25. Where the resource utilized is ecologically sensitive and/or impacts on ecologically sensitive areas, 

clients should give preference to purchasing products, including renewable natural resources, from 

primary suppliers

18 

that have verified sustainable management practices. The adverse impacts associated 

with ecologically sensitive supply chains will be considered given particular attention where there is a 

potential risk that primary suppliers are overexploiting to areas of critical habitat or high conservation 

value HCV. 

• Guidance notes -- laws and conventions. Include in the list of applicable laws and 

conventions the International Plant Protection Convention and the International Treaty on 

Genetic Resources for Food and Agriculture. 

PS 7 – Indigenous People (IP) 

• Scope of assessment. Clarify that the scope of IP impacts assessment is the project’s area 

of influence. 

• Human rights. Delete the “the” before “human rights” to avoid misunderstanding that IP 

have separate specific human rights. Proposed text: “respect for the human rights and the 

dignity, aspirations ...” 

• Due process. Clarify the phrase, “due process in the case of commercial development of 

their land under national laws” since it suggests that a private entity can provide due 

process, while in fact due process is normally provided by states through its judicial system. 

(para 16, bullet 5) 

• Definitions. 

a. Reconcile footnote 1 definition of "good faith negotiation" with paragraph 24 of the 

Guidance document. 

b. Provide definitions of "informed participation," “free, prior and informed consultation” 

and "successful outcome". 

c. Clarify the different terms : "lands under traditional or customary use", "traditional or 

customary lands", "lands subject to traditional ownership or under customary use", "lands 

[that are] traditionally owned or under customary use", and "communally held traditional or 

customary lands under use." 
16

IV. Disclosure Policy 

• Overview. Ensure that the items included in the current proposed sections C and D of the 

IFC’s Disclosure Policy, on Investment-related Information and Advisory Services 

respectively, continue to be developed and disclosed in a timely fashion, supplemented by 

the recommendations below. 

• Project supervision, monitoring documents and completion reports. Consistent with the 

World Bank’s approach to these documents, disclose project supervision, monitoring and 

completion documents including, with respect to safeguards, the following documents: : 

o Corrective Action Plans (CAPs) and CAP implementation reports for Category B 

projects as well as Category A; (para 13.e)

o Substantive summaries of the environmental/social project supervision, 

monitoring and completion reports (or sections of broader reports), and 

Environmental and Social Review Documents (para 9.c and 14);

o Key documents specific to oversight and evaluation of FI Environmental and 

Social Management systems and FI subprojects, as discussed below;

o Reporting on any project-level performance indicators specifically pertaining to 

safeguard commitments. 

• Development impact reporting. Expand the IFC’s commitment to report publicly on 

development impacts of individual projects to include the following: (para 14.i)

o All projects (Categories A, B, C, FI)

o A robust set of DOTS indicators.

o Appropriate project-specific indicators, either within or beyond DOTS.

o Qualitative discussion.

o Both negative and positive impacts.

Disclosure specifically related to safeguards. 

• Category A ESRS public disclosure. Require an effective minimum disclosure period 

for Category A and FI(A) Environmental and Social Review Summaries (ESRS, which 

include EIAs) of 120 days before financing approval. 

• FI disclosure. For Category A projects financed by FIs, require the same disclosure 

period before approval as for Category A projects financed directly by IFC.

• Category rating and EIA disclosure early in the project cycle. Post the rating at the time 

the IFC determines a project to have potential significant adverse impacts that are 

diverse, irreversible, or unprecedented, and post the EIA when available, not waiting for 

full ESRS documentation. 

• Disclosure of rationale for categorization. Proposed text for footnote 6 to para 13.a: 

“The rationale for a project’s categorization will be project-specific, highlighting key factors in the 

categorization (e.g., key significant impacts, or key factors in determining that a project’s impacts 

will be limited rather than significant), and also addressing any changes from preliminary 

categorization ratings and any discrepancies from co-financing partners.” 

• EIA disclosure in a co-financing situation. Post links to environmental and social due 

diligence information posted by co-financing partners. 
17

• Broad community support. Disclose a summary not only of the process of determining 

BCS but also of the information on which the determination is based, highlighting key 

issues and considerations. (para 13.d) 

Disclosure related to FIs 

• Development impact reporting for FIs. Include FIs in Development impact reporting 

requirements; include new language that FI development impact reporting will include 

not only portfolio-wide reporting but also reporting on sub-projects with more substantial 

development reporting (positive and negative).

• Disclosure of social/environmental information. Publicly disclose in the SII, ESRS and 

subsequent annual updates:

o A summary of the analysis and assessment of the FI’s environmental and social 

management system (this would presumably not need annual updates except in 

the event of material change); 

o Any action plan agreed with the FI to address weaknesses; 

o Annual updates on implementation of any such action plan; 

o An updated list of FI subprojects with potential significant social and/or 

environmental risks and impacts and links to any EIAs. 

 

Advisory services, historical information and institutional information 

• Advisory services. 

o Include national programs in the disclosure requirements pertaining to global and 

regional Advisory Service programs. (para 16). 

o State that Advisory Services are subject to environmental/social impact 

assessment requirements. (para 17) 

o Include projects likely to lead to activities with environmental and social impacts 

in the disclosure requirements of specific Advisory Service projects. Proposed 

text: “For advisory services projects likely to lead to activities with environmental and 

social impacts (such as advisory projects in infrastructure, energy and extractives 

sectors) and those with a value over a certain threshold amount to be decided from time 

to time...” (para 17) 

V. Implementation 

Because the Performance Standards rely on actions taken by the client, IFC oversight of 

implementation is critical, supplemented by disclosure and ongoing engagement with affected 

stakeholders. Accordingly, we recommend that the next draft of proposed changes in the text of 

the PPS and DP be accompanied by a report on IFC plans for implementation. In developing this 

plan, we underscore the need for assurances of compliance at the time of Board consideration 

and strong client commitment to continued compliance, coupled with continued IFC compliance 

and the availability of appropriate and timely remedies in the event of non-compliance, including 

possible IFC disengagement. The IFC should also have an effective system for assessing a 

project’s initial and ongoing risk and the relevant risk management capacities of the client, the 

host country government and the IFC itself. Moreover, the IFC should ensure appropriate 

procedures to verify client data, especially for key determinations, such as whether a project has 

potential significant impacts; what to address in action plans; and whether client commitments 

are being met in a timely manner, particularly with respect to corrective action plans.