The EPs are voluntary guidelines. They represent an attempt by a number of large commercial banks to establish a level playing field in terms of the social and environmental impacts of project finance. The initiative is largely driven by banks’ reputational assurance needs.
So it’s about brand equity primarily?
That may be the starting point, but the large banks are also beginning to see that managing CSR risk issues has a potential upside too. We’re finding increasingly that people are coming to IFC because they want environmental and social due diligence on projects. Achieving a global standard helps them build credibility, reduce reputational risk and can also open doors to new capital investment flows for our clients.
Is there a similar appetite among IFC’s smaller clients?
Companies working in risky sectors, like natural resource extraction and infrastructure, have always been quick to pick up on good CSR management. But we’re now also seeing our smaller clients – companies working in everything from textiles to agribusiness – asking for assistance to identify and deal with the risks and opportunities that CSR issues present.
And what is IFC doing to address this demand?
IFC and the donor community have supported the formation of a small unit within IFC – the Corporate Citizenship Facility (CCF) – whose mandate is to help IFC clients (and wider private sector in emerging markets) understand and respond to the emerging CSR agenda in their respective businesses. CCF also works to disseminate good practice guides and tools more widely. A good example of what we’re doing is our work in the Ecuadorian banana industry, where we’re working to enhance the environmental and social performance of supply chains – the idea being that our client and hundreds of small scale banana farmers can continue to market produce via international supply chains. Another example of the kind of support that CCF can provide – this time in Kenya – is a proposal to set up a business offering our clients advice on addressing HIV/AIDS in the workplace. The plan is that it’ll take its services to the open market, and then in 18 months or so spin off as a stand-alone business.
How can companies investing in emerging countries promote CSR?
Good question! There’s no easy answer. I suspect the challenges will vary across sectors, regions and scales of activity, but one clear need is for companies based in OECD countries to provide more assistance when they “require” changes in the environmental and social performance through supply chains. It’s no good just imposing a compliance-like mode overnight. What the most progressive companies are doing is looking for ways to share technical assistance and management expertise with their suppliers. The results in terms of supplier fidelity, product quality and cost efficiency in production are slowly filtering through. Of course, more immediately, they could become a CCF sponsor!
Mark is programme leader for the Corporate Citizenship Facility at IFC. The unit was set up a year ago with funding from IFC and the Dutch and Norwegian governments to help further develop and demonstrate the business case for corporate citizenship. Mark is an ecologist by training and started his career in the Caribbean with VSO, before working with a number of different UK consultancy firms. From 1994 to 1998 he was an environmental adviser to DFID in Africa, before moving on to IFC. He joined the CCF unit in July 2002. He lives in Edinburgh with his wife and two children. When not traveling he has every intention of taking up scuba diving again.
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