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IFC Celebrates One Year of New Environmental and Social Standards:

Submitted by: International Finance Corporation

Categories: Environment

Posted: May 14, 2007 – 09:42 AM EST

 

Standards Emerge as Sustainability Benchmark in Project Finance

WASHINGTON, DC, May 14, 2007 - Within one year of their implementation, IFC’s environmental and social standards have emerged as the global benchmark in project financing. The standards, which are the basis for the Equator Principles, are used in close to 90 percent of project finance in emerging markets – representing $28 billion in 2006. Adherence to the standards has grown among banks and public financial institutions. Discussions about benchmarking projects against the IFC standards are ongoing among export credit agencies, and insurance companies and investors are considering ways to integrate the standards in their work.

"We are creating a level playing field, in which financial institutions abide by the same environmental and social standards. Where once they competed solely on price, now they are starting to compete through innovative financing for environmentally sustainable projects. This is one of the most important initiatives in the financial sector," said Lars Thunell, IFC Executive Vice President.

From May 14 to 16, IFC is celebrating the one year anniversary in a "Community of Learning" event. IFC is convening Equator Banks, public financial institutions, and export credit agencies to share their experience on their application of the environmental and social standards and to discuss the way forward for sustainable finance. IFC will present its lessons learned in one year of implementation.

"The Performance Standards are proving to be a solid framework, enabling us to make specific requirements of our clients. These include strengthening their environment and social management systems; establishing safe working conditions for all workers, including in the supply chain; and ensuring free, prior, and informed consultation with affected communities. Without the new standards, we would not be able to process complex projects that are critical for private sector–led development in emerging markets, nor would we be able to help key clients meet their environmental and social challenges," said Rachel Kyte, IFC Director of Environment and Social Development.

At the Community of Learning, IFC will present various guidance materials that support the implementation of the standards. This includes the new Environmental, Health, and Safety Guidelines, which were issued on April 30, 2007, after two years of updating. The guidelines offer technical guidance on pollution prevention and abatement to private sector clients and are used as the de facto reference by the private sector operating in emerging markets. IFC is also launching a Handbook on Stakeholder Engagement, which offers good practice guidance to companies on how to develop and sustain relationships with affected communities and other stakeholders throughout the life of a project.

IFC applies the Performance Standards to all projects it finances to minimize their impact on the environment and on affected communities. On April 30, 2006, after a rigorous process of updating, IFC launched its new standards. The new standards are stronger, better, and more comprehensive than the former IFC safeguard policies. They clearly define the roles and responsibilities of IFC and our client companies.

The Equator Principles are a voluntary set of principles for environmental and social risk management in project finance, based on IFC’s standards. To date, 51 financial institutions have adopted the Equator Principles. For more information, see http://www.equator-principles.com.

About IFC

IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit www.ifc.org.

IFC’s Environmental, Health, and Safety Guidelines are available at:
http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines

IFC’s Handbook on Stakeholder Engagement is available at:
http://www.ifc.org/ifcext/enviro.nsf/Content/Publications

For more information, please contact:

Lucie Giraud International Finance Corporation
Phone: 12022940504
Phone 2: 12024584662
Website: www.ifc.org

For more from this organization:

International Finance Corporation

 

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