International Finance Corporation

While this is discussion remains current, IFC is undergoing an update to their Performance Standards that will render some information obsolete once finished. Also, IFC continually updates the links to their policy documents, and consequently some of the hyperlinks below may no longer work.

The International Finance Corporation's over-arching social policy aims and objectives are established in its Sustainability Framework. IFC's Sustainability Framework first entered into force on April 30, 2006 and was updated in 2012 . Prior to the 2006 Performance Standards, investments were subject to contemporaneous versions of the IFC and World Bank Group safeguard policies.

In addition to the Sustainability Framework, social policy at IFC is also manifested in the form of operational guidance to its staff and clients in the from of procedures, operational guidelines, and guidance notes.

The discussion that follows elaborates each facet of IFC's social policy.

Social and Environmental Policy at IFC

IFC's Current E&S Policy Framework

Sustainability Framework

First adopted in 2006, IFC's Sustainability Framework articulates the corporation's strategic commitment to sustainable development. The framework establishes environmental and social practices in the context of risk-management, accountability and transparency.

The Sustainability Framework consists of:

  1. The Policy on Social & Environmental Sustainability, which defines IFC's commitments to environmental and social sustainability.
  2. The Performance Standards, which define clients' responsibilities for managing their environmental and social risks, including requirements for information disclosure.
  3. The Access to Information Policy, which articulates IFC's commitment to transparency.

The 2006 edition of IFC's Sustainability Framework applies to investments that go through IFC's initial credit review process from April 30, 2006 to December 31, 2011. In 2012—following an 18-month process of stakeholder consultation—the Sustainability Framework was updated to reflect the evolution in good practice for sustainability and risk mitigation. The 2012 edition of IFC's Sustainability Framework applies to all investment and advisory clients whose projects undergo IFC's initial credit review process after January 1, 2012.

Performance Standards

IFC 2012 Performance Standards on Social & Environmental Sustainability

PS 1: Social and Environmental Assessment and Management System
PS 2: Labor and Working Conditions
PS 3: Pollution Prevention and Abatement
PS 4: Community Health Safety and 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

IFC's Performance Standards on Social & Environmental Sustainability are globally-recognized as a benchmark for environmental and social risk management in the private sector. The Performance Standards define clients' roles and responsibilities for project management—including client and project-level requirements for information disclosure. The Performance Standards are grouped into eight sections, each of which is coupled with Guidance Notes to further clarify client roles and responsibilities under the standards (see discussion below).

Pre-2006 Environmental and Social Safeguards

Prior to 2006, IFC's safeguard policies defined the responsibilities of IFC and its clients for preventing and mitigate undue harm to people and their environment in the identification, preparation, and implementation of projects. IFC's safeguard policies comprised the following:

Guidance Notes

IFC's Guidance Notes were created to accompany the 1998 Environmental and Social Review Procedure (ESRP)—to provide additional information to assist IFC staff and project sponsors. The 1998 Guidance Notes were updated in 2006 and again in 2012 alongside updates to the Sustainability Framework.

IFC's Guidance Notes are not binding policy requirement in the same manner as the Performance Standards and safeguards policies. Rather, they are issues as policy implementation guidance for IFC clients.

First Editions of IFC Guidance Notes (December 1998) [ARCHIVAL]

Policy on Disclosure / Access to Information

IFC first adopted its Disclosure Policy in September 1998 to clarify scope of materials that IFC makes publicly available—either on a routine basis or upon request. The policy was updated in 2006 in-line with the Policy on Social and Environmental Sustainability and the Performance Standards. IFC's Access to Information Policy (AIP) went into effect on January 1, 2012 and supersedes the 2006 Disclosure Policy.

In accordance with the requirements of the Performance Standards, IFC's Disclosure Policy necessitates that IFC clients self-disclose information to project-affected parties about all types of adverse environmental and social impacts resulting from the project, as well as the client’s plan to mitigate these impacts. In addition, the document also defines how routinely-provided information can be obtained, the types of information that IFC does not routinely provide (a fairly standard list of exceptions intended to protect the financial and personal welfare of IFC, its clients, and its employees), and how IFC monitors its own implementation of this policy. IFC's 2012 Access to Information Policy seeks to provide accurate and timely information regarding its investment and advisory services activities to its clients, partners and stakeholders.

IFC Exclusion List

The IFC Exclusion List defines the types of projects that IFC does not finance. The original exclusion list applies to IFC's investments prior to July 30, 2007. The second iteration of this list, dated July 30, 2007, is currently in effect.

Environmental and Social Review Procedure

Introduced in December 1998, IFC's Environmental and Social Review Procedures (ESRP) define how IFC conducts its environmental and social due diligence for the business activities involving direct investments, investments through financial intermediaries, and advisory projects. ESRP provisions apply to IFC project environmental and social review and appraisal, leading to an IFC-approved Environmental and Social Review Summary (ESRS) and Action Plan. The ESRP define IFC’s responsibilities for direct investment supervision, the disclosure and supervision procedures concerning IFC’s financial intermediary investments, and the social and environmental requirements for IFC-managed advisory services.

The ESRP are periodically updated.

Environmental and Social Review Procedures Manual

Interpretation Notes

IFC's Interpretations Notes (IN) guide IFC staff in implemeting its E&S policy framework. To date, IFC has published three IN:

World Bank Group Environmental, Health, and Safety Guidelines

The World Bank Group Environmental, Health, and Safety Guidelines (known as the "EHS Guidelines") are technical reference documents with general and industry-specific examples of Good International Industry Practice (GIIP) and are referred to in the World Bank’s Environmental and Social Framework and in IFC’s Performance Standards.

The EHS Guidelines contain the performance levels and measures that are normally acceptable to the World Bank Group, and that are generally considered to be achievable in new facilities at reasonable costs by existing technology.

The World Bank Group requires borrowers/clients to apply the relevant levels or measures of the EHS Guidelines. When host country regulations differ from the levels and measures presented in the EHS Guidelines, projects will be required to achieve whichever is more stringent.

General EHS Guidelines

The General EHS Guidelines (2007) contain information on cross-cutting environmental, health, and safety issues potentially applicable to all industry sectors. This document should be used together with the relevant Industry Sector Guideline(s).

The General EHS Guidelines include the following sections and subsections (links below in English only):

1. Environmental

2. Occupational Health and Safety

3. Community Health and Safety

4. Construction and Decommissioning

References and Additional Sources

Industry Sector Guidelines

IFC Industry Sector Guidelines are living documents that reflect the most updated versions of the World Bank Group Environmental, Health, and Safety Guidelines (known as the "EHS General Guidelines") accoding to specific industries and sectors, as follows:

Agribusiness/Food Production

Chemicals

Forestry

General Manufacturing

Infrastructure

Oil, Gas & Mining

Power

Pollution Prevention and Abatement Handbook (PPAH)

Between 1998 and 2007, IFC investments were guided by the the World Bank Group's 1998 Pollution Prevention and Abatement Handbook (PPAH), as set out in Operational Policy (OP) 4.01, "Environmental Assessment," and related documents. The PPAH updated and replaced the World Bank Group's 1988 Environmental Guidelines. It consists of three sections. Part I contains a summary of key policy lessons in pollution management, derived from practical experience inside and outside the World Bank Group. Although Part I is aimed primarily at government decision makers, other readers will derive considerable benefit from a better understanding of the issues facing government agencies. Part II presents good-practice notes on implementation of policy objectives, based on experience with World Bank Group projects and on lessons from the policies and practices of other agencies and organizations in this field. Part III provides detailed guidelines to be applied in the preparation of World Bank Group projects.