IFC A Strategic Approach for

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• IFC A Strategic Approach for
• Social and Environmental Sustainability

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IFC A Member of the World Bank Group
International Bank for Reconstruction and
Development, 1945
International Finance Corporation, 1956
International Development Association, 1960
Multilateral Investment Guarantee Agency, 1988
International Centre for Settlement of Investment
Disputes, 1966
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IFCs Mission

• To promote sustainable private sector investment
  in developing countries, helping to reduce
  poverty and improve peoples lives.

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Mainstreaming Social and Environmental Issues

• New Social and Environmental Standards

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IFCs SE due diligence framework

• Exclusion List
• 8 new Social and Environmental Performance
  Standards
• Environmental, Health Safety and Industry
  Guidelines updates soon to be released
• Updated Social and Environmental Review Procedure
  questionnaires, appraisal, ES Review Document,
  loan agreement, annual monitoring and supervision
• Best Practice and Guidance Notes
• Creating Business Opportunity through Improved
  Animal Welfare
• Addressing the Social Dimensions of Private
  Sector Projects
• Non Discrimination and Equal Opportunity
• Managing Retrenchment
• HIV/AIDS in the Workplace
• Addressing Child Labour in the Workplace and
  Supply Chain
• New Labor Toolkit for Investment Officers
• New Biodiversity Guide
• Updated Disclosure Policy

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New Policy and Performance Standards on Social
and Environmental Sustainability

• IFC introduced new policy and performance
  standards on April 30, ,2006
• New standards
• fill gaps left by earlier policies
• outcomes orientation
• recognize importance of management systems and
  community engagement
• becoming an international benchmark (Equator
  Principles)

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Equator Principles

• Voluntary association of private banks (currently
  41)
• Currently use IFCs old policies as their
  principal social and environment risk management
  tool. Effective July 1, 2006 the banks will
  start migrating to the new IFC Policy and
  Performance Standards on Social and Environmental
  Sustainability
• The banks account for over 85 of global project
  finance in emerging markets
• details available at www.equator-principles.
  com

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IFC Policy Performance Standards

• Basis of IFCs leadership approach to ES
  sustainability
• Ensure projects financed by IFC are
  environmentally and socially sound
• Provide comprehensive risk and opportunities
  framework for IFC and its clients
• Can be used to improve project performance

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IFCs Policy Framework
Requirements
Implementation
Disclosure Policy
Environmental Social Review Procedure
IFC Institutional
Sustainability Policy
8 Performance Standards

• 8 Guidance Notes
• Environmental, Health Safety Guidelines
• Best Practice Materials

Client Project Level
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8 Performance Standards

• PS 1 SE Assessment and Management Systems
• PS 2 Labor and Working Conditions
• PS 3 Pollution Prevention and Abatement
• PS 4 Community Health, Safety Security
• PS 5 Land Acquisition and Involuntary
  Resettlement
• PS 6 Biodiversity Conservation and Sustainable
  Natural Resource Management
• PS 7 Indigenous Peoples
• PS 8 Cultural Heritage

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IFC Resources to help clients

• Almost 50 social and environmental experts on
  staff
• approximately 25 are working in field offices
  (4 in Africa)
• provide advice and support during appraisal and
  supervision
• Broad range of Technical Assistance and other
  support for clients
• donor funded support through Trust Funds and
  SME facilities
• Social and Environment staff an integral part of
  IFC team

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Walking the Talk

• Highlights of IFC Leadership and Case for
  Sustainable Finance

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IFCs value add

• Global experience in sustainable finance
  mainstreaming SE issues
• Provider of technical assistance and incubator
  financing to support new sustainable business
  opportunities
• Sustainable Energy
• Biodiversity
• Cleaner Technologies
• Social Responsibility
• Sustainable Finance
• Carbon Finance
• Gender
• SE site is the most visited part of the IFC
  website after Careers, in May 2006
• visits to CES external website 11,492
• total number of document downloads from CES
  external website 8,088

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Responding to climate change challenge

• World Bank Group went carbon neutral on World
  Environment Day, June 5, 2006
• offset GHG emissions from DC headquarters and
  travel from HQ (field offices next) by
  investments in renewable energy and energy
  efficiency projects
• direct and indirect carbon dioxide emissions of
  approximately 148,000 metric tons 60 percent
  from operations and 40 percent from airline
  travel
• First IFC project in Asia biogas-based power
  and heat generation in Korat, Thailand
• IFC now also guaranteeing carbon finance
  purchases for European buyers

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IFC supports first FT Sustainable Banking Awards

• Financial Times launches 1st Sustainable Banking
  Awards, in association with IFC
• 90 entries from 48 institutions around the world
  
• HSBC Sustainable Bank of the Year
• Banco ABN Amro Real of Brazil - emerging markets
  bank of the year
• WestLB, the German bank - sustainable bankers of
  the year
• Citigroup, its Mexican arm Banamex and Financiera
  Compartamos, a Mexican microfinance provider -
  sustainable deal of the year for the first
  peso-denominated investment grade bond issue to
  finance loans to poor entrepreneurs, mainly women
  in rural areas
• Credit Suisse - sustainable energy deal of the
  year - for last year's flotation of Suntech Power
  Holdings, a Chinese solar energy company, on the
  New York Stock Exchange

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IFCs 2005 Sustainability Report

• Outlines IFCs response to global challenges
• climate change, poverty, corruption, HIV/AIDS,
  participation of women in private sector
  development, and the preservation of natural
  resources
• Provides more information than ever before about
  how sustainability is integrated into
  decision-making throughout IFC's investment cycle
• Presents progress in how IFC manages its own
  social and environmental footprint and is leading
  by example through its new ES standards and by
  promoting the business case for sustainability
  among its financial sector clients
• Adopts the Global Reporting Initiatives
  Sustainability Reporting Guidelines

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The case for sustainable finance

• Protecting the environment and ensuring fair
  treatment of people and communities affected by
  projects is recognized as a fundamental
  requirement of long-term economic success
• Increasing activism coupled with ease of access
  to global communications has significantly
  increased the risks presented by poor
  environmental and social performance
• Investors now increasingly demand good
  environmental and social performance as a
  condition of investment growth of SRI funds,
  Equator Principles, etc
• Demonstrated business case for good environment
  and social performance positive impacts on
  costs, market access, risk and reputation