IFC helps companies follow through on their investment goals while protecting the environment. © Shutterstock.com
At first glance, turtles and tigers don’t seem to have much in common. But they’re both at risk when companies embark on large infrastructure and agricultural projects near their homes. Although concerns for animals and their habitats can derail projects, through careful evaluation and management, businesses can combine environmental protection with a positive investment outcome.
These evaluations can be costly to implement and pose technical challenges, particularly for small- and medium-sized companies operating in markets that are already challenging. To help these companies follow through on their goals while protecting the environment, IFC developed an approach for assessing and mitigating potential risks to biodiversity. IFC’s Performance Standard 6 (PS6) offers a one-size-fits-all framework for biodiversity risks and supports companies that need to integrate biodiversity protection and conservation measures into project planning and operations. Ultimately, this reduces project costs and enhances a company’s reputation.
“Performance Standard 6 has set a new bar for the private sector in terms of biodiversity management, shifting the global conversation from, ‘Can we mitigate impacts to biodiversity?’ to ‘How do we get it done?’” says Linda Krueger, a Senior Policy Advisor at the Nature Conservancy. “It’s changed expectations about how to address biodiversity impacts from development in a very practical way.”
Supporting businesses that want to create site-specific biodiversity strategies requires specialized expertise and experience. IFC works with partners—including companies, governments, academia, NGOs, and conservation organizations—to put PS6 into practice.
One project in Costa Rica tells an especially strong story of how this coordination benefits wildlife. In that country, IFC’s partnership with Panthera, a global conservation organization, allowed IFC to implement a program focused on preserving the country’s jaguar population. And in Jordan, where IFC worked to create the Tafila Wind Farm, the first large-scale wind energy project in the Middle East, IFC helped develop an evaluation and mitigation framework ensuring the safety of birds, bats, and other wildlife.
These two examples only begin to touch on the potential of PS6 to guide better outcomes, says Neil Cox, Manager of the Biodiversity Assessment Unit at the International Union for Conservation of Nature (IUCN). “PS6 has been very valuable to us in helping transition the knowledge that we have on biodiversity conservation into the actual development processes, where the work is taking place on the ground,” according to Cox. “PS6 is directing companies toward using these safeguards to conserve the world’s biodiversity and nature as a whole. Without it we would be fairly lost.”
The private sector has also contributed to widespread adoption of Performance Standard 6. In a recent IFC survey of companies operating in the oil, gas, mining, and infrastructure sectors, nearly 85 percent of surveyed companies either fully or partially adopted Performance Standard 6 as part of their business model, and the majority considered it the current international standard for cross-sector biodiversity good practice.
For example, Newmont, a mining industry leader that prioritizes environmentally sustainable approaches to its work, issued a Biodiversity Management Standard for its exploration sites, operations, and new projects in 2014. Newmont’s standard is based in part on IFC’s Performance Standard 6. The company uses our definitions of habitat, use of avoidance and mitigation hierarchy, and criteria for development in critical habitats.
Just as turtles swim beyond maps’ borders and tigers roam widely, there is a need to develop strategies for evaluating biodiversity risks that transcend the geographical boundaries of a project.
IFC created such border-busting assessment strategies while supporting a project in Pakistan. This project required collective action by numerous stakeholders to protect critically endangered fish in two rivers. IFC guided the development of a biodiversity plan for the Gulpur Hydropower Project in the Poonch River, which is being scaled-up to the whole Jhelum-Poonch basin where IFC is financing three other hydropower projects. The strategy aims to enhance and preserve aquatic habitats for key fish species, including fish hatcheries, offer protection of priority ecosystem services, and enable a coordinated approach to manage water and sediment flows in the basin.
For smaller projects with limited resources, taking this cumulative approach to assessments and planning can deliver huge cost-saving benefits. This can help other lenders or partners, encouraging more sustainable investments.
The Integrated Biodiversity Assessment Tool for the World Bank Group facilitates screening of critical habitat values through access to key conservation data and expertise during implementation of environmental safeguards and performance standards.
PS6 is part of a broader, interconnected framework of eight IFC Environmental and Social Performance Standards that guide investors through projects with potential risks.
All IFC-financed projects must meet these requirements. However, influence and implementation of the Performance Standards reaches far beyond IFC’s own client base; PS6 is recognized globally as a leading benchmark for environmental and social risk management.
IFC’s Performance Standards form the basis of the Equator Principles, an environmental and social standard used by over 90 financial institutions in 37 countries around the world. This covers over 70 percent of international project finance debt in emerging markets.
Published in August 2017