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Environment and social (E&S) sustainability through the protection of people and the environment from potential adverse impacts of Asian Development Bank (ADB) projects, is a cornerstone of ADB’s support for inclusive green economic growth and poverty reduction in Asia and the Pacific. In July 2009, ADB’s Board of Directors approved the Safeguard Policy Statement (2009) (SPS). It has applied to all ADB-financed and/or administered sovereign and nonsovereign operations since January 2010. The SPS was widely considered to be a progressive policy when first approved in 2009. The core elements of the policy and the assessment processes and requirements for the environment, involuntary resettlement, and Indigenous Peoples remain relevant, functioning, and largely aligned with the practices of other multilateral development banks (MDBs). However, over the past 14 years of implementation, certain limitations within the policy have been observed. In May 2020, ADB’s Independent Evaluation Department (IED) completed a corporate evaluation of the SPS and recommended revisions to the policy and associated business processes and implementation requirements. Following the IED evaluation, ADB commenced a comprehensive SPS review and update (SPRU) process, considering the changing development context and evolving challenges and capacities of ADB’s developing member countries (DMCs) and clients. The main objectives of the SPRU are to (i) modernize the policy and apply good practices; (ii) harmonize with other MDBs; (iii) adapt to regional needs and financing modalities; and (iv) enhance business processes and efficiency. These objectives are aimed at improving the implementation and outcomes for project-affected persons and the environment. ADB recognizes that harmonization of E&S requirements with ADB’s peer institutions will reinforce the collective efforts of MDBs in supporting better E&S performance and strengthen borrowers’ E&S systems, while reducing transaction costs. The proposed environmental and social framework (ESF) builds on the findings and recommendations of IED and culminates almost 4 years of detailed analytical studies and extensive engagement with diverse stakeholders. It attempts to reconcile sometimes competing and conflicting views and recommendations. The ESF seeks to strike the right balance with aligned E&S approach with peer MDBs, while following good international practice, integrating emerging issues, and enhancing implementation effectiveness and efficiency. Throughout policy preparation, ADB consulted extensively with DMCs, civil society organizations, private sector clients, project-affected persons, and international organizations, including MDBs. These discussions highlighted implementation challenges and lessons from the SPS and yielded recommendations to strengthen the content and scope of the new policy. This included recommendations in areas including gender equality, sexual exploitation, abuse, and harassment; disadvantaged or vulnerable groups; labor and working conditions; biodiversity; climate change; digital risks; Indigenous Peoples; and stakeholder engagement. In addition, stakeholders, particularly DMCs and private sector clients, underscored the need to provide more support for strengthening and using borrowers’ E&S systems; greater harmonization with peer institutions; recognition of regional and country-specific contexts and needs, including fragile and conflict affected situations and small island developing states; and improved clarity, guidance, and capacity support. The ESF sets forth E&S objectives and requirements aimed at fostering sustainable development outcomes. The proposed ESF provides broader coverage in terms of E&S areas and promotes more integrated risk-based and adaptive management approach that aims to focus E&S assessment and management on key risks, with several elements to improve efficiency, without compromising on final outcomes and compliance. The ESF has five parts: (i) the vision, (ii) the E&S Policy, (iii) 10 environmental and social standards (ESSs), (iv) requirements for financing modalities and products, and (v) a prohibited investment activities list. The E&S Policy will be supported by an Operations Manual section and Staff Instructions for ADB Staff to provide detailed business process requirements. Each ESS will be accompanied by nonmandatory guidance notes, which will be finalized after the adoption of the ESF. A distinctive feature of the ESF is the delineation of ADB’s responsibilities (as detailed in the E&S Policy), and the borrower and client requirements (as detailed in the ESSs). Further, the ESF separates ADB’s long-term aspirational commitments to E&S sustainability (as captured in the vision) from the project-level mandatory requirements of ADB (as set out in the E&S Policy, and of the borrowers and clients, as set out in the ESSs and requirements for financing modalities and products). The ESF will become effective 1 January 2026, or a later date as determined by Management after confirming the readiness to implement the ESF and following Board consultations on the same. It will supersede the SPS, subject to the following transitional arrangements: (i) (ii) for projects that have been approved or have a concept note approved by ADB prior to the effective date of the ESF, the SPS will continue to apply; and for new projects for which a concept note is approved by ADB on or after the effective date of the ESF, the E&S Policy, ESSs, and the prohibited investment activities list will apply. ADB will allocate responsibilities and appropriate resources to support the effective implementation of the ESF. The ESF rollout across ADB, DMCs and private sector clients will commence immediately following ADB’s Board approval of the ESF and will span 3 years. The main objective is to help borrowers and clients transition effectively to the new policy and implement the ESSs, while continuing to apply the existing SPS requirements for ongoing projects. It will focus on (i) supporting and strengthening the capacity of ADB Staff, borrowers, and clients; and (ii) training implementing agencies and other stakeholders, including contractors, on the implementation of the ESS requirements.

Environmental and Social Framework

Resource Key: VKFS7UEV

Document Type: Report

Creator:

Author:

  • ADB

Creators Name: {mb_resource_zotero_creatorsname}

Place: Mandaluyong City, Philippines

Institution: Asian Development Bank

Date: October 2024

Language: en

Environment and social (E&S) sustainability through the protection of people and the environment from potential adverse impacts of Asian Development Bank (ADB) projects, is a cornerstone of ADB’s support for inclusive green economic growth and poverty reduction in Asia and the Pacific. In July 2009, ADB’s Board of Directors approved the Safeguard Policy Statement (2009) (SPS). It has applied to all ADB-financed and/or administered sovereign and nonsovereign operations since January 2010. The SPS was widely considered to be a progressive policy when first approved in 2009. The core elements of the policy and the assessment processes and requirements for the environment, involuntary resettlement, and Indigenous Peoples remain relevant, functioning, and largely aligned with the practices of other multilateral development banks (MDBs). However, over the past 14 years of implementation, certain limitations within the policy have been observed. In May 2020, ADB’s Independent Evaluation Department (IED) completed a corporate evaluation of the SPS and recommended revisions to the policy and associated business processes and implementation requirements. Following the IED evaluation, ADB commenced a comprehensive SPS review and update (SPRU) process, considering the changing development context and evolving challenges and capacities of ADB’s developing member countries (DMCs) and clients. The main objectives of the SPRU are to (i) modernize the policy and apply good practices; (ii) harmonize with other MDBs; (iii) adapt to regional needs and financing modalities; and (iv) enhance business processes and efficiency. These objectives are aimed at improving the implementation and outcomes for project-affected persons and the environment. ADB recognizes that harmonization of E&S requirements with ADB’s peer institutions will reinforce the collective efforts of MDBs in supporting better E&S performance and strengthen borrowers’ E&S systems, while reducing transaction costs. The proposed environmental and social framework (ESF) builds on the findings and recommendations of IED and culminates almost 4 years of detailed analytical studies and extensive engagement with diverse stakeholders. It attempts to reconcile sometimes competing and conflicting views and recommendations. The ESF seeks to strike the right balance with aligned E&S approach with peer MDBs, while following good international practice, integrating emerging issues, and enhancing implementation effectiveness and efficiency. Throughout policy preparation, ADB consulted extensively with DMCs, civil society organizations, private sector clients, project-affected persons, and international organizations, including MDBs. These discussions highlighted implementation challenges and lessons from the SPS and yielded recommendations to strengthen the content and scope of the new policy. This included recommendations in areas including gender equality, sexual exploitation, abuse, and harassment; disadvantaged or vulnerable groups; labor and working conditions; biodiversity; climate change; digital risks; Indigenous Peoples; and stakeholder engagement. In addition, stakeholders, particularly DMCs and private sector clients, underscored the need to provide more support for strengthening and using borrowers’ E&S systems; greater harmonization with peer institutions; recognition of regional and country-specific contexts and needs, including fragile and conflict affected situations and small island developing states; and improved clarity, guidance, and capacity support. The ESF sets forth E&S objectives and requirements aimed at fostering sustainable development outcomes. The proposed ESF provides broader coverage in terms of E&S areas and promotes more integrated risk-based and adaptive management approach that aims to focus E&S assessment and management on key risks, with several elements to improve efficiency, without compromising on final outcomes and compliance. The ESF has five parts: (i) the vision, (ii) the E&S Policy, (iii) 10 environmental and social standards (ESSs), (iv) requirements for financing modalities and products, and (v) a prohibited investment activities list. The E&S Policy will be supported by an Operations Manual section and Staff Instructions for ADB Staff to provide detailed business process requirements. Each ESS will be accompanied by nonmandatory guidance notes, which will be finalized after the adoption of the ESF. A distinctive feature of the ESF is the delineation of ADB’s responsibilities (as detailed in the E&S Policy), and the borrower and client requirements (as detailed in the ESSs). Further, the ESF separates ADB’s long-term aspirational commitments to E&S sustainability (as captured in the vision) from the project-level mandatory requirements of ADB (as set out in the E&S Policy, and of the borrowers and clients, as set out in the ESSs and requirements for financing modalities and products). The ESF will become effective 1 January 2026, or a later date as determined by Management after confirming the readiness to implement the ESF and following Board consultations on the same. It will supersede the SPS, subject to the following transitional arrangements: (i) (ii) for projects that have been approved or have a concept note approved by ADB prior to the effective date of the ESF, the SPS will continue to apply; and for new projects for which a concept note is approved by ADB on or after the effective date of the ESF, the E&S Policy, ESSs, and the prohibited investment activities list will apply. ADB will allocate responsibilities and appropriate resources to support the effective implementation of the ESF. The ESF rollout across ADB, DMCs and private sector clients will commence immediately following ADB’s Board approval of the ESF and will span 3 years. The main objective is to help borrowers and clients transition effectively to the new policy and implement the ESSs, while continuing to apply the existing SPS requirements for ongoing projects. It will focus on (i) supporting and strengthening the capacity of ADB Staff, borrowers, and clients; and (ii) training implementing agencies and other stakeholders, including contractors, on the implementation of the ESS requirements.

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