In July 2006 the International Finance Corporation (IFC) – the private sector arm of the World Bank Group – launched a new set of business standards for managing environmental and social risks. Clients of the IFC who enter into project finance, equity investment, corporate finance or intermediary finance deals with IFC will shortly have to comply with these new standards.
Many commercial banks – Barclays, HBSC, JPMorgan Chase, Standard Chartered and others – are already following IFC practice in this area. As such we may well be witnessing the dawn of a new international financial benchmark for environmental and social risk management for project finance in emerging markets. The new standards are aimed at private sector clients, firmly resting responsibility for achieving their compliance with these parties.