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Sustainability Policy

Stakeholder Feedback IFC Response

Frequently Asked Questions
Why does the proposed mitigation hierarchy use IFC has adjusted the proposed mitigation hierarchy in Version 2 of
“reduce” instead of “minimize” with respect to the Sustainability Framework, and “minimize” has replaced
impacts? “reduce” in order to reflect industry-wide practice. Additional
clarification on the mitigation hierarchy is provided in Guidance
Note 1.

Why does the Policy not require IFC to exert IFC’s approach to supervision is based on the level of existing
stronger oversight of projects in countries with risks and potential impacts. A weak regulatory framework might
weak regulatory environments? increase risks and IFC takes this into consideration; however this
fact does not necessarily need to be explicitly reflected in the
Policy. It is an operational rather than a policy issue.

How does IFC define risks and impacts? IFC defines environmental and social risk as a combination of
probability or frequency of certain hazard occurrence and severity
of impacts resulting from such an occurrence. ”Impact” is defined
as any potential change to the physical, natural or cultural
environment, surrounding community, or health of community or
workers directly resulting from the business activity to be

Is IFC’s categorization of projects determined by Mitigation measures are incorporated in the project design from an
pre-mitigation risks and impacts? early project development stage. IFC’s categorization decision is
based on information related to potential risks and impacts
available during its appraisal process. By definition, actions
already undertaken by clients before IFC’s involvement do not
constitute risk, as risks refer to future, not past events.

How does IFC assess E&S risks in advisory IFC's social and environmental due diligence applies to the full
projects? spectrum of IFC investments and advisory services (AS) activities.
In case of advisory activities, IFC reviews the overall social and
environmental risks associated with an AS activity and screens the
activity for potential social and environmental risks, as well as
against the IFC Exclusion List. Should the review result in the
identification of environmental and/or social risks, the advice
provided to clients should be consistent with the Performance
Standards as a framework of good international industry practice
in social and environmental risk management.

Note: IFC’s responses to questions and comments are based on the current draft (Version 2) of IFC’s
Sustainability Framework. They are subject to change as the Framework is further revised. No text in
the Framework or in these interim comments and responses is final until approved by IFC’s
Management and Board.