Assessment of environmental and social impacts
Taking into account and managing the project’s environmental and social impacts is important and beneficial to the company already at the preparation stage of a project.
Financial grant applicants need to agree to comply with internationally accepted environmental and social responsibility standards as well as local legislation concerning, for example, environmental and employee rights. The assessment is based on the IFC’s Environmental and Social Responsibility Standards and the World Bank Group’s general and sectoral guidelines. For the projects, observing these higher standards can be a benefit.
If necessary, the applicant can seek advice on the application of standards to their project from Finnpartnership, which consults Finnfund’s environmental experts in questions concerning environmental and social responsibility.
Classification of the project’s environmental and social impacts
An expert on the environment classifies projects based on their potential environmental and social impacts. The nature and stage of the project influence the detail and information of the analysis significantly. The aim is to ensure that the project has a minimal number of negative impacts on health, society and the environment.
A project that may have significant negative environmental impacts possibly extending to a wider area than where the project is located. In practice, this refers to, for example, new production plants and significant expansions of production plants in critical sectors. Environmental class A also includes projects located in fragile zones or in their immediate vicinity or that may have negative impacts on fragile zones.
A project that may have moderately negative environmental impacts, which are smaller than the impacts of class A projects and which are more easily managed than in class A projects.
A project that does not have potentially negative environmental impacts or they are minor.
Special attention is paid to the assessment of social impacts for projects with the following characteristics:
- The project operates in primary production, for example, in forestry, agriculture or mining, and employs significant numbers of unskilled and/or temporary/hired labour.
- The project is targeted at a labour-intensive sector (particularly in special economic zones).
- Raw materials or processes hazardous to health are used in the production related to the project.
- Project implementation may require the resettling of people or the project will weaken the trade opportunities for the local community.
- The project is a privatisation project, the implementation of which could result in extensive lay-offs or weaken the community’s access to existing basic services.
For more information:
Marika Torkkel
Senior Sustainability Impact Adviser
Business Partnership Support, Development impacts
marika.torkkel@finnpartnership.fi +358 (0)50 306 6721Support for identifying and managing risks
Finnpartnership offers a free consulting service to companies that have received Business Partnership Support and whose projects are challenging in terms of environmental, social and human rights impacts.
Apply for Business Partnership Support for assessing environmental and social impacts
When assessing business potential in developing markets, a company can apply for Business Partnership Support to analyse its environmental and social impacts. With the help of financial grant, the company can identify the best place to launch operations and assess the company’s potential impacts on the local environment.