Read WRI's recommendations for the International Finance Corporation's (IFC) environmental and social sustainability framework.
The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, plans to update its environmental and social policies by the end of the year. In May, after several months of initial consultations, IFC publicly released the first draft of its updated Sustainability Policy (for IFC use), Disclosure Policy (for IFC use), and Performance Standards (for client use). The draft improves on the 2006 version, and takes important first steps to bring IFC’s policies in line with the changing landscape of corporate responsibility over the past five years—including greater focus on climate change, ecosystem services, and human rights.
An ongoing criticism of the IFC Performance Standards is that many clients reduce them to a checklist of the minimal activities necessary to receive financing. IFC, in turn, lacks effective ways to ensure that these activities lead to actual, improved environmental and social performance on the ground. Consultations with local communities, for example, often become “information sharing” sessions rather than an opportunity for affected people to participate meaningfully in project decision-making. This remains an underlying concern in the first draft, and we look forward to continued improvements in the second draft.
Our key recommendations, which are described in more detail in the attached PDF, include:
- Reduce the net climate change impacts of IFC’s investments.
- Use an ecosystem-services approach to strengthen environmental protection.
- Avoid adverse human rights impacts in IFC’s investments.
- Require the free, prior and informed consent of indigenous peoples affected by IFC activities.
- Strengthen the broad community support standard as a way to prevent conflict.
- Improve coordination between the World Bank and IFC.