The management of social issues poses a key challenge for many private companies operating in emerging markets. Identifying and addressing these issues early on and managing them actively throughout the life of a project can increase the likelihood of project success. This approach creates broader social support for the investment, reduces risks and uncertainties, helps maintain a “local license to operate,” and enhances the reputation of a company. Ultimately, economic development cannot be successful if it is not sustainable, and sustainability cannot be achieved without taking into account the social aspects of an investment. Therefore, promoting the social well being of local communities is an explicit objective of development projects financed by IFC. IFC views social assessment as an important tool for evaluating the social aspects of IFC-financed projects as well as an integral part of IFC’s environmental assessment process. This Good Practice Note (Note) provides guidance on how to
identify and assess project-related social issues. It also provides guidance on options for social ”value added” and sustainable development opportunities that may arise in project development. While the identification and assessment of impacts of IFC financed projects are mandatory, the approach outlined in this document serves as good practice guidance.
This Note is intended as a reference document for IFC’s sponsors, but the primary target audience is practitioners and/or specialists working in a developing country context and in charge of identifying, analyzing and addressing social issues on behalf of the sponsor during the assessment process. In the hands of a knowledgeable and experienced practitioner, this Note will provide the
roadmap necessary to undertake the social impact assessment process at the project level and prepare the appropriate documentation for IFC.