IFC Performance Standards Revisions Entering Final Lap
In its recent
Please visit updated blog post: Remaining Obstacles to Revisions of IFC Performance Standards
The IFC Performance Standards, which provide the basis for the
Example of proposed changes include project/investment categorization. This is expected to increase the number projects classified as A-level (or high risk). These will require more extensive social and environmental impacts assessments (SEA or ESIAs). IFC also proposes to introduce a more segmented and risk-based categorization (FI-1-FI-3) for investment in and through financial intermediaries. These constitute nearly half of IFC’s new investments each year.
Human Rights issues are addressed in changes to Performance Standard 1 and its accompanying Guidance Note. These will provide information on how to use human rights impact assessments (HRIA) as a voluntary risk management tool in high risk situations.
Approach to Labor and Supply Chain issues have also been strengthened. IFC proposes to expand the scope for labor and supply chains to include non-employee workers contracted directly by a client, and to ensure that working conditions for migrant and non-migrant workers are comparable.
IFC is also seeking to strengthen stakeholder engagement, particularly in relation to local communities. IFC is proposing that clients should demonstrate that they have obtained Broad Community Support (BCS) and Free, Prior and Informed Consent (FPIC) for Indigenous Peoples, when applicable. (See also one of my earlier blog about FPI-Consultation and FPI-Consent)
IFC is also proposing a major shift to its
Highlighted changes to existing policies and Performance Standards can be accessed
Do you feel that these changes simply provide a policy catch-up with improving practices at IFC? Or do you feel that these changes will create an undue burden on IFC and/or its prospective clients? Ultimately, do you expect that these changes will direct IFC’s investments towards more sustainable private sector investments?
About the author: Mehrdad Nazari (MBA, MSc, LEAD Fellow) is a Corporate Responsibility, Sustainability Reporting & ESIA Advisor, and Director of