2004 October Report of the Auditor General of Canada

General features

Documented environmental and social review process appropriate to the organization's mandate

Demonstrate that an environmental and social scan of the mandate has been undertaken (such as an assessment, minutes of management meetings)

Standard¹

List key objectives of the process

Standard

Define key terms used in the process (such as project, environment, environmental risk, and environmental effect)

Emerging²

Demonstrate management commitment (such as a public statement on process, a management review process)

Standard

Demonstrate management accountability (such as a designated management representative responsible for decisions under the process)

Standard

Demonstrate organizational capacity to implement the process (such as trained staff and resources)

Standard

Provide for monitoring of process conformance

Standard

Provide for public reporting on the nature and extent of the application of the process

Standard

Include a policy commitment and procedures to promote continual learning and improvement in the organization and to inform clients of changing requirements

Standard

Review of financial services applications

Systematic procedures for financial services applications

Provide objective criteria and/or procedures for

• classifying all applications by environmental risk regardless of level of financial involvement

Emerging

• determining significance of environmental risks

Standard

• exempting applications from review

Standard

• refusing support

Standard

• special categories such as modifications, expansions, or maintenance

Standard

• applications that might affect sensitive ecosystems and protected areas

Standard

Require third-party review (at arm's length) of the client's environmental assessment, where the financial institution's process has determined the potential for significant environmental risks

Emerging

Include tools for process implementation (such as guidelines for clients, training packages for internal staff)

Standard

Contents of environmental assessment reports

Specification of the expected contents of environmental assessment reports

Describe the surrounding environment

Standard

Describe the intended use of funds or financial support and any related physical structures

Standard

Describe host country laws, regulations, standards, and other applicable environmental requirements

Standard

Assess and describe known and potential environmental risks (for example to air, water, land, protected areas)

Standard

Identify mitigation measures and monitoring required

Standard

Identify residual impacts after mitigation

Standard

Prepare an analysis that justifies accepting residual impacts

Standard

Describe emergency response procedures where there is a significant potential impact on the environment in the case of an incident

Emerging

Identify and assess public and stakeholder concerns

Standard

Consider alternatives to the undertaking

Standard

Consider cumulative effects

Emerging

Environmental and social standards

Documented policy and procedures respecting environmental and social standards

Comply with host country regulations and standards

Standard

Apply international environmental standards and guidelines (such as World Bank Group's standards, ISO 14000, or a numeric standard such as the World Health Organization's air quality guidelines)

Standard

Apply home country standards in the absence of host country or international standards

Emerging

Ensure due regard for global environmental agreements and conventions (such as Convention on Climate Change, Kyoto Protocol, Montreal Protocol, Convention on Biodiversity, Convention on Environmental Impact in a Transboundary Context, Aarhus Convention)

Standard

Co-operation among institutions

Documented policy and procedures for co-operation

Co-ordinate environmental review and monitor efforts when more than one financial institution is involved (for example, co-financing)

Standard

Allow flexibility to use existing environmental assessments

Standard

Disclosure

Documented policy and procedures for active disclosure

Define information to be disclosed, by whom and when

Standard

Establish a format for public disclosure of environmental assessment findings

Standard

Public consultation

Documented policy and procedures for public consultation

Determine the need for public consultation

Standard

Identify relevant stakeholders

Emerging

Notify stakeholders

Standard

Receive and summarize public consultation results

Standard

Document gaps in consultation (for example, where consultation was not possible for cultural or political reasons)

Emerging

Disclose results of public consultations

Standard

Environmental covenants

Documented procedures that establish and include environmental covenants in contractual agreements

Document any changes or covenants imposed on the application as a result of internal policies, environmental assessment, and public consultations

Emerging

Monitor and report on compliance with the covenants by the client or a third party

Standard

State the applicant's obligation to take corrective action if monitoring indicates a problem

Emerging

Supervision and monitoring

Documented procedures to define how transactions are to be supervised and monitored by the institution and to ensure compliance with established covenants

Arrange occasional inspections by the institution or a local agent to verify compliance reports

Standard

Establish follow-up procedures where non-compliance has been identified

Standard