The Road to the SDGs

PURPOSE X Environmental and social safeguards play a critical role in helping countries manage their assets, both human and physical. They also help address reputational risk to MDBs. X Until recently, IsDB has either relied on the laws and regulations of the respective MC to mitigate the impacts of projects or has agreed to implement the environmental and social safeguards policies of co- financing development partners. X In keeping with other MDBs, all of which have formal operational policies to assess environmental and social risks and adopt mitigation measures, where necessary, IsDB decided to implement a formal operational policy and structured framework to consistently apply safeguards in its projects. X Several factors indicate the need for such a structured framework of best industry environmental and social safeguards: – Increasing size and complexity of IsDB’s interventions – Need to finance investments that fill SDG gaps – ESG requirements of international rating agencies. X IsDB has developed its first Environmental and Social Safeguards Policy (ESSP), which enables it to: – Bring benefits to its MCs by taking necessary actions to access global grant resources related to environmental protection – Reflect global best practices – Reduce the reputational risks for project sponsors and funders – Enable systematic analysis of available data, identify options, engage actively with stakeholders, establish effective monitoring arrangements, and ensure high project quality at entry. METHOD X The ESSP embodies the principle of proportionality and takes a flexible yet risk-based approach, allowing for the selective use of country systems and other development partners’ policies to support the achievement of the overall objective of enhancing sustainability and development effectiveness. X The policy pillars on which the overarching goal of the proposed ESSP rests are: – Inclusiveness, through disclosure of information and consultation with and involvement of stakeholders in the overall decision-making process – Resilient development, by embedding Environmental and Social Safeguards Policy I sDB has launched a targeted policy to address the environmental and social impacts of development projects and programmes it funds IsDB has joined the major MDBs in implementing an Environmental and Social Safeguards Policy [ 172 ] SDGs