Sustainable Development

An Environmental and Social Management System (ESMS) is a set of policies, procedures and defined roles that enables an institution to systematically identify, assess and manage environmental and social risks throughout the financing cycle — from initial screening to post-disbursement monitoring.

All projects financed with the participation of the NDI undergo environmental and social screening. The scope of the assessment depends on the project’s risk category: low-risk projects require only a basic review, while high-risk projects are subject to a detailed assessment and the development of an environmental and social risk management plan.

Partner banks classify projects according to their potential environmental and social impacts, in line with the IFC Performance Standards and the requirements of the NDI’s ESMS. The risk category is determined during the application review process and defines the required documentation, the scope of due diligence and the frequency of subsequent monitoring.

Partner banks must notify the NDI of any significant environmental or social incidents related to financed projects within the timeframes established by the financing agreement and ESMS procedures. Incident reports should include the date, location, nature of the incident and the corrective actions taken.

The IFC Performance Standards are eight internationally recognized standards developed by the International Finance Corporation. They establish requirements for managing environmental and social risks, covering areas such as risk assessment, labour and working conditions, resource efficiency, biodiversity conservation, community health and safety, and stakeholder engagement. They serve as a global benchmark for development banks and financial institutions.