TOOLS TO ENHANCE ESG DUE DILIGENCE AND RISK MANAGEMENT

Transcription

1 10 th Annual Community of Learning TOOLS TO ENHANCE ESG DUE DILIGENCE AND RISK MANAGEMENT BRITISH MUSEUM, LONDON, NOVEMBER 9, 2016 Raymi Beltran Senior Environmental Specialist, IFC

2 Business case for Contextual Risk & ESG Performance

3 Contextual Risk

4 Tools to enhance due diligence throughout our project cycle ` ESG Due Diligence

5 RepRisk: Business Intelligence Tool RepRisk (reprisk.com) is a data provider firm that offers daily monitoring of 28 ESG issues and media criticisms of companies (listed and unlisted), in 15 languages across thousands of sources globally. Its News Reports screen for ESG issues and negative media coverage concerning a company/project and benchmark with other companies in the same sector or country.

6 Verisk-Maplecroft: ESG Risk Indices, Mapping & Bespoke Reports Verisk-Maplecroft (Maplecroft.com) is a UK-based firm that provides analysis of risks at local, country, issue, and sector level, with researched quantitative risk indices and mapping technology. Their 10-page concise reports examine ten key issues associated with a sector within a country or sub-national level to inform project-level risk management.

7 Example: Verisk-Maplecroft

8 Geographical Information System (GIS): Visualizing ESG risks GIS is a system designed to capture, store, manipulate, analyze, manage, and present all types of spatial or geographical data

9 Example: GeoDesk (N. Brazil) Proposed windfarm plot and turbines for project

10 IBAT: Integrated Biodiversity Assessment Tool (1) Assess overlaps with protected areas, World Heritage sites, & key biodiversity areas Web-based map and reporting tool for rapid (<1hr) access to core biodiversity information. Customized for IFC users to screen critical habitat issues by anyone. Derived from tools built with and for users from finance (EPFI s, OECD EXIM Banks, MFI s), agribusiness, mining & energy, manufacturing and other sectors Links to underlying databases & supporting info on priority species or sites

11 IBAT: Integrated Biodiversity Assessment Tool (2) Quick guide for all specialists to undertake rapid screens Auto-generated PS6-focused report with initial interpretation based on PS6 requirements & emphasis on next steps Available in English & Spanish Identifies local experts & NGOs Network of regional champions to support specialists in IBAT screening

12 Tools into Use: Brazil Wind Project Research Brief pulling together an array of sources: 1. Report: Findings from external sources (IDB projects, Verisk-Maplecroft risk indices, RepRisk sectoral/regional reports...) 2. GIS Map 3. IBAT Analysis

13 A bit on Process.. IFC s Risk Management during Appraisal 1. Encouraging wider use of ESG tools Training! 2. Resource management - Matching skills with needs/risks 3. Pre-Appraisal Check-ins opportunity to share internal knowledge 4. Early engagement with Investment Teams (timing, expectations, internal support) 5. Close engagement with clients leading to disclosure (Comittment?) and after..

14 A bit on Process (2) IFC s Risk Management during Supervision: 1. Closer monitoring of ESRR 3-4s, CAO cases and High Risk Projects 2. Real Sector More focused ESG support to clients (key areas of risk) 3. Financial Institutions (FIs) Enhanced ESG support 4. EMENA Real Sector SSV Pilot Program

15 Key Takeaways New tools available to improve our understanding of contextual less obvious risks More information when coupled with strategic allocation of resources can deliver improved management of projects Better understanding of ESG risks can lead to more proactive work by the company and closer supervision by financial institutions to drive improved ESG performance and development!

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17 THANK YOU!

18 ANNEX

19 Summary of Tools RepRisk (Business Intelligence Tool) Negative media screens on clients/projects/sectors Watch-list on active clients Verisk-Maplecroft Bespoke reports on a country/subnational level/sector Risk indices (environmental, human rights, political & economic) GIS (Geospatial Information Systems) Help team & client visualize their ESG risks IBAT (Integrated Biodiversity Assessment Tool) A rapid screening tool for biodiversity and critical habitat issues

20 Example: RepRisk News Alert on an Active Client

21 Example: RepRisk Reports 1

22 Example: RepRisk Reports 2

23 Example: GeoDesk (N. Brazil) Proposed windfarm plot and turbines for project

24 Open sources & data used to build GIS models for E&S specialists ACLED : ACLED (Armed Conflict Location & Event Data Project) is the most comprehensive public collection of political violence and protest data for developing states. Center for Hazards and Risk Research Climate Change Knowledge Portal: The Climate Change Knowledge Portal (CCKP) Beta is a central hub of information, data and reports about climate change around the world. Global Forest Watch : WRI s Global Forest Watch initiative uses the most advanced satellite data and crowd-sourced information to track deforestation throughout the world in near-real-time. Global Reach: Map of IFC disclosed projects and other thematic GIS datasets. International Renewable Energy Atlas Labor, Human, and Civil Rights Risk Indices : Human Rights Indices from Verisk-Maplecroft LandMark - LandMark is a dynamic, online mapping platform that provides critical information on the collective land and natural resource rights of Indigenous Peoples and local communities around the world. Map Africa - MapAfrica is an interactive platform that maps the geographic locations of the African Development Bank s investments in Africa. ThinkHazard : Think Hazard is a new web-based tool enabling non-specialists to consider the impacts of disasters on new development projects. UN Comtrade Database : Free access to detailed global trade data