Environmental and Social Assessment of Projects
The Bank aims to reduce negative impacts that its financed projects may have on the environment and society, and increase positive results, as well as to promote best practices in sustainability among its clients.
Environmental and Social Assessment Sustainability Governance
Sustainability-Related Materials
Environmental and Social Framework
The Bank applies a comprehensive set of integrated environmental and social procedures for every project considered for financing at all stages of the project cycle, from the initial phase of client screening to regular project monitoring and until its closure. At the project level, the core assessment aims to prevent, mitigate or minimise occurrence of environmental and social risks and adverse impacts; while also taking account of project effects. At the company level, the Bank also traces an ESG profile of the company in order to understand its level of maturity and the implied risks of business association.
The framework is aligned with international best practices and harmonized with the industry standards prevalent in the EDB’s investment. The Bank promotes and requires compliance with these robust practices by its existing and prospective clients, thereby contributing to improving the environmental and social standards and diligence of companies and projects in the Eurasian region.
The platform of tools used to assess the environmental and social performance of the projects includes:
- Excluding financing for specified activities
- Collecting data on project environmental and social contributions
- Assessing clients’ ESG profile
- Applying Environmental and Social Safeguards
- Regularly monitoring the environmental and social effects of the projects
The current version of the Environmental and Social Framework was updated in 2023 and is publicly available in both Russian and English.
Process of the project cycle
| Stage of the project cycle | Stage of environmental and social analysis | Tool for environmental and social analysis |
| 1. Preliminary analysis | Environmental and social screening | checking against the Environmental and social Exclusion List |
| 2. Project analysis | Environmental and social impact assessment | additional ESG profiling of the borrower |
|---|---|---|
| data collection on environmental and social contributions | ||
| assessment of compliance with environmental and social Safeguards | ||
| Environmental and social categorisation | summarising environmental and social analysis result | |
| providing recommendations | ||
| developing environmental and social monitoring indicators | ||
| 3. Monitoring | Environmental and social monitoring | |
| completing the Monitoring Questionnaire | ||
| preparing the monitoring report | ||
Performed by the Borrower
Performed by the Bank
Exclusion List
The Exclusion List is attributable to thorough and rigorous study of the applied literature, market frameworks and benchmarking, in consideration of the Bank’s mission and strategy. The list sets forth a comprehensive array of specified activities that will be refused by the Bank, reserving its right not to finance whether direct or intermediated by financial institutions.
- Permanently forbidden by established regulations: host country laws, regional or international laws, international phase-out or bans
- Not in conformity with the Bank’s mandate, its socio-environmental responsibility and sustainable development
More about the Exclusion List
The Exclusion List was revised and approved by the Bank’s Sustainability Committee and it constitutes a fully-fledged regulatory Bank document, a component of the Bank’s Environmental and Social Policy applicable to projects in all its member states.
The document will be subject to regular review by the EDB’s Directorate of Sustainability. Whenever material regulatory and industry standards require fast-paced revision of the existing provisions, the Bank is expected to adapt promptly to changes, reduce risks and demonstrate commitment to compliance and operational excellence. Any proposed amendments to the document will be subject to consideration and approval by the Sustainability Committee.
In light of the current economic development maturity, available resources and technological landscape in the member states, the Bank has also diligently examined inclusion of a list of conceivable exceptions within the Exclusion List. Exceptions will be treated on a discretionary and selective case-by-case basis, including screening for more sustainable alternatives. This transition provision allows the Bank to balance potential environmental and social negative impacts and benefits, as well as the risks of controversies relating to each activity.
To facilitate the interaction assessment procedure with the Borrower, Guidelines to the Exclusion List and the add-on MS Excel file on exceptions and detailed observations have been developed.
The current version of the Exclusion List was last updated in 2023 and is publicly available in both Russian and English.
Project environmental and social due diligence
The EDB provides financing for projects at diverse stages of implementation, including those with potentially limited information. Consequently, the principal aim of the environmental and social assessment is to thoroughly evaluate all ex-ante effects of projects before financing is initiated. In this regard, the Bank articulates its standards and requirements and aligns with best international practices.
Projects financed by EDB must comply with the requirements and standards to which the Bank is committed, including, but not limited to
- UN Sustainable Development Goals;
- The Ten Principles of the UN Global Compact;
- UN Principles of Responsible Investment;
- Equator Principles;
- UN Framework Convention on Climate Change;
- UN Universal Declaration of Human Rights;
- UN Universal Declaration of Human Rights;
- The World Heritage Convention.
- Potential environmental and social impact of the project;
- Compliance by the project with applicable taxonomies in the region of operations;
- The relevant project category depending on its environmental and social effects (A, B, C and FI)
The Bank endeavours to reduce the negative impact and increase the positive impact Bank-financed projects can create. The EDB assesses the safety of financed projects against the EDB's Environmental and Social Safeguards . The Safeguards are a set of good practices for responsible and considerate management related to eight aspects of operations
Safeguard 1
Assessment and Management of Environmental and Social Risks and Impacts
Safeguard 2
Labour and working conditions
Safeguard 3
Resource efficiency and pollution prevention
Safeguard 4
Community health, safety and security
Safeguard 5
Land acquisition and involuntary resettlement
Safeguard 6
Biodiversity conservation and sustainable management of natural resources
Safeguard 7
Indigenous peoples and vulnerable populations
Safeguard 8
Cultural heritage
Deviation from the safeguards signals that project implementation might have an adverse environmental and social impact (environmental and social risks). The Bank is particularly careful and stringent about such projects in order to undertake the most feasible and affordable measures to mitigate such impact.
Assessment of borrowers and E&S effects of projects
The Bank exercises ex-ante estimations. when checking clients and projects for ESG aspects. The EDB’s approach to environmental and social effect assessment is comparable to the methodologies adopted by other multilateral development banks. For these purposes, the Bank has several tools in place.
The Bank conducts a complimentary assessment of borrowers’ commitment to best sustainability practices. The client's ESG profiling indicates how well the business has integrated the regional and global best ESG standards. The Bank promotes information on how the client’s company can contribute to sustainable development in a meaningful way.
Depending on the number and scope of ESG practices identified for the client, their ESG profile is rated as Negligible, Medium or Sufficient. The EDB ESG profiling questionnaire is publicly available in both Russian and English.
The Bank collects data not only on the risks and negative impacts, of a project, but also on positive ones. The client is motivated to provide the EDB with data on the project's contributions to the following socio-environmental aspects:
Aspect 1
Cutting GHG emissions
Aspect 2
Energy efficiency
Aspect 3
Land use
Aspect 4
Renewable energy
Aspect 5
Reducing pollution
Aspect 6
Resource efficiency
Aspect 7
Waste management
Aspect 8
Safety
Aspect 9
Job creation
Aspect 10
Benefits for society
Aspect 11
Local engagement
Aspect 12
Diversity and inclusion
Aspect 13
Related country- & regional-level effects
The EDB Environmental and Social Contributions Form and ESG-profiling Questionnaire are publicly available in both Russian and English