Most development work requires some form of borrowing to get it off the ground, usually in the form of private investment. But did you know that showcasing your commitment to biodiversity goes a long way when trying to attract private finance?
Securing private funding
Attracting funding is a vital step in making a proposed development viable. The International Finance Corporation (IFC) offers support for businesses looking to access private finance, providing that the development project meets a number of criteria, including:
- Be located in a developing country that is a member of IFC;
- Be in the private sector;
- Be technically sound;
- Have good prospects of being profitable;
- Benefit the local economy; and
- Be environmentally and socially sound, satisfying our environmental and social standards as well as those of the host country.
Anyone who applies for credit with the IFC needs to adhere to its Sustainability Framework.
What is the IFC sustainability framework?
The Sustainability Framework expresses IFC’s strategic commitment to sustainable development. It promotes sound environmental and social practices, encourages transparency and accountability, and contributes to positive development impacts. The Sustainability Framework consists of:
- ThePolicy on Environmental and Social Sustainability, which defines IFC’s commitments to environmental and social sustainability.
- ThePerformance Standards, which define clients’ responsibilities for managing their environmental and social risks.
- TheAccess to Information Policy, which articulates IFC’s commitment to transparency.
Why are Performance Standards important?
The IFC’s Performance Standards are globally recognized as a benchmark for environmental and social risk management in the private sector. There are eight Performance Standards, which establish standards that the developer is to meet throughout the life of an investment by IFC. These include:
- Assessment and Management of Environmental and Social Risks and Impacts
- Labour and Working Conditions
- Resource Efficiency and Pollution Prevention
- Community Health, Safety, and Security
- Land Acquisition and Involuntary Resettlement
- Biodiversity Conservation and Sustainable Management of Living Natural Resources
- Indigenous Peoples
- Cultural Heritage
Importance of Performance Standard 6
Performance Standard 6 (PS6) relates to Biodiversity, making it a central part of assessing whether a development is sustainable.
PS6 has three main objectives: to protect and conserve biodiversity, to maintain the benefits of ecosystem services, and to promote the sustainable management of living natural resources.
The IFC wants to make sure that all developments protect and conserve biodiversity, maintain ecosystems, and manage living natural resources. This is particularly important in countries which are reliant on natural resources to provide livelihoods, but applies across the world as any loss of biodiversity can have a knock-on effect on ecosystems which contribute to the economic prosperity and development of people everywhere.
One of the aims of PS6 is to manage and mitigate the impact that a development has on the IFC’s ‘ecosystem services’, which describe the benefits we all get from ecosystems. These are broken down into four parts, including:
- The products we gain from ecosystems
- The benefits we get from the regulation of ecosystem processes
- The non-material benefits of ecosystems
- The natural processes that maintain other areas of biodiversity
Failure to meet PS6 could completely ground your project.
Adhering to PS6
Navigating PS6 documentation can be complex. This is where an ecological consultant becomes invaluable. As experts in this field, they will be able to use their knowledge and experience to complete the paperwork, advise you about possible risks to biodiversity, and outline the best ways to mitigate these risks in a cost-effective way.
A good ecological consultant will have prior experience of IFC approval and will be able to work with them to ensure your proposal is taken seriously. They will also have experience and contacts with other agencies involved in the approval process, including government bodies and frameworks supplied by other agencies.
The key things your ecological consultant will need to cover to ensure you are fully compliant are:
- Critical habitat assessment – including habitat characterisation, rapid surveys, reporting and stakeholder consultation
- Biodiversity management plan – to work as part of a wider Environmental and Social Management Plan (ESMP)
- Biodiversity action plan – an IFC requirement to describe measures taken to ensure compliance
- Biodiversity strategy – a broader strategy mainly for external stakeholders to refer to
- Biodiversity monitoring and evaluation – measurements taken throughout the lifetime of the project
- Biodiversity offset management plan – explaining what has been done to offset any environmental damage and how this will be maintained in the long-term.
By appointing an ecological consultant at the start of the process, you will also ensure that you are prepared for any biodiversity-related issues, which may have delayed or impeded work further down the line.
Demonstrating your commitment to biodiversity
By complying with PS6, you are playing an active role in protecting local biodiversity and ecosystems. This shows the IFC, and key stakeholders, that you are carrying out work in a responsible and sensitive way, and adhering to best practice.
In return, you will have upheld Performance Standard 6 and will significantly boost your chances of securing private funding for your development.
To discuss your project requirements, please contact our experienced team