IFC Board Approves new Environmental and Social Standards

 

IFC Board Approves new Environmental and Social Standards on February 21, 2006. The Equator Principles are expected to be revised in light of these new standards

Environment & Social Development Department

Washington D.C., February 21, 2006 – The Board of Directors of the International Finance Corporation (IFC) adopted today new environmental and social standards for the organization. The new standards build upon the environmental and social requirements that IFC currently applies to private sector projects it finances in the developing world. A new policy on disclosure, adopted at the same time, will increase transparency requirements.

The main benfits of the new standards are:

1. New requirements for community health, safety, and security; labor conditions; pollution prevention and abatement; integrated social and environmental assessments; and management systems.

2. Stronger requirements for community engagement and consultation; biodiversity protection; community and worker grievance mechanisms; use of security forces; greenhouse gas monitoring; and greater disclosure of information to the public by IFC and client companies.

3. New outcomes-based approach, which requires client companies to have in place effective management systems that allow them to handle social and environmental risks as an integral part of their basic operations and business model.

Lars Thunell, IFC’s Executive Vice President said:

“The new IFC standards are stronger, better, and more comprehensive than those of any other international finance institution working with the private sector. We aim, with these new policies, to increase the development impact of projects in which we invest. We also seek to give companies operating projects in emerging markets the capacity to manage fully their environmental and social risks and to compete better in a global economy.”

In approving the new set of standards, IFC’s Board requested some refinement of the language. Accordingly, the final version of the Performance Standards and Disclosure Policy will be issued as a complete text in the coming weeks. For more information, visit http://www.ifc.org.

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