Continuing to Put People First: Embedding community investment in the sustainability standards of international financial institutions

Abstract

We discuss environmental, social and governance (ESG) considerations in international development projects, especially those funded by the World Bank and International Finance Corporation (IFC). Their social safeguard policies were adopted because of neglect of social impacts by projects. Although development assistance goals have shifted from economic growth towards poverty reduction and shared prosperity, mitigating adverse impacts of projects does not necessarily address the multiple dimensions of poverty or the Sustainable Development Goals. ‘Do no harm’ has limited ability to achieve social development objectives. Instead, a significant contribution to international development could come by embedding community investment in the environmental and social frameworks of international financial institutions, and social impact assessment and international development practise. This would ensure that projects contribute to improving the lives of project affected peoples. We propose changes to the IFC Performance Standards that could be implemented by other multilateral development banks and in the Equator Principles.