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Hydropower Advisory

Investing in an Environmental and Social Management System Could Improve Your Performance and Save You Thousands of Dollars

Photo: World Bank


Thinking about improving your environmental and social performance and managing your risks? Upfront investment in an environmental and social management system (ESMS) is one way to go.


In the Mekong region, IFC will help hydropower companies develop and implement their ESMS so that they can better evaluate and manage environmental and social risks as well as address grievances from workers and affected communities.


“Without an ESMS, companies do not have the policies or procedures in place to properly address and manage risks,” said Kate Lazarus, ESMS trainer for IFC’s Lao Hydro Program. “Our aim is to help companies through this process by providing the tools and materials they need to preemptively lower the risk and impact they face with their hydropower projects.”


IFC offers a range of ESMS services to clients such as concise two- to three-day trainings, plus self and independent assessments. The process starts with a company assessing gaps that need to be bridged and then providing training to staff to ensure that they understand operating procedures aimed at lowering risk. An ESMS may help lower production costs by cutting energy, water and raw material consumption as well as improving safety-management procedures that reduce on-site accidents.


“For example, in the construction phase of a hydropower plant, if workers are not wearing protective gear or don’t have access to an escape route, this may be a result of the company not having an occupational, health and safety policy, or the workers not knowing what it is,” said Lazarus. “An ESMS helps companies establish such a policy so that they can address environmental, labor, occupational health, and safety issues effectively.”  


Despite the clear benefits of having an ESMS, many hydropower companies in the Mekong region have yet to develop one. 


“An ESMS is not a one-off document. It clearly defines how the company will address their environmental and social commitments,” said Lazarus. “With an ESMS, companies can be rest assured that they will be able to take action when an incident occurs.”


The Lao Hydro Program will provide more information on the benefits of an ESMS at its quarterly business meetings with hydropower companies, co-hosted with the Lao National Chamber of Commerce and Industry.


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