The environmental questions should arrive before the financing deadline

An environmental or social issue discovered late in a financing process can become a scheduling problem, a design problem and a commercial problem at once. By then, important assumptions may already be embedded in contracts and forecasts.

IFC’s Performance Standards provide a widely used framework for identifying and managing these risks. The applicable requirements for any transaction must be established with the relevant specialists and financiers. The commercial lesson is to investigate early enough for the findings to influence the project.

A document cannot substitute for a process

The useful questions concern what the proposed activity affects and how those effects will be managed. Land, livelihoods, labour, community safety and operating practices can all require attention, depending on the project.

A completed assessment is valuable when management understands its findings and can implement the necessary measures. A report left outside the operating plan may offer little protection against the risks it identifies.

Budget and responsibility should follow the assessment. If a mitigation measure requires spending or a change in design, that implication belongs in the financial and delivery plans.

Include the people who will carry the obligations

Technical teams, operators and sponsors need a common account of what is required. A financier’s timetable should not become a reason to promise measures the business is not equipped to deliver.

B&A’s perspective is that responsible preparation strengthens the commercial case by making important risks visible while choices remain open.

The objective is more durable execution: a project whose design, budget and operating arrangements reflect the environment and communities around it, with specialist advice where needed.