Implementing Environmental and Social Risk Management on the Ground: Interfaces Between Clients, Investment Banks, Multi-laterals, Consultants and Contractors: A Case Study from the EBRD

Abstract

Assessing and understanding the potential environmental and social (ESG) risks is an essential step in the preparation and development for a project seeking investment. Understanding the due diligence process, the scope of issues to be covered and how interfaces or relationships between key parties can potentially affect the risk profile of the project and timeline for financial approval is explored in this chapter. Including ESG requirements as a key component of the investment works best when incorporated early in the project cycle and should ensure that the project meets national requirements and standards. However, the introduction of International Lenders may broaden the ESG risk analysis and therefore require the project to be recalibrated to meet an additional set of standards, requirements or principles. This can be a challenge for all parties involved. This chapter considers some of the lessons learnt from the environmental and social appraisal processes and from the monitoring of project development and implementation in practice, or ‘on the ground’ of large-scale infrastructure projects. It explores some complexities of interfaces and how they address project ESG risks and highlights areas where there may be some capacity building needs.