Financial close does not end the environmental and social review: it starts it. During construction and operation, lenders periodically verify that the project is meeting its action plan and the agreed standards.
What lenders require after close
The Equator Principles (Principle 9) call for independent monitoring and reporting over the life of the loan for Category A projects and, as appropriate, Category B projects. Development finance institutions have equivalent requirements.
In practice this means two obligations: periodic reports prepared by the project, and reviews by an independent environmental and social consultant who reports to the lenders.
Independent monitoring for lenders
- Review of the project's periodic reports and compliance evidence.
- Site visits with inspection of work fronts, camps and facilities, and interviews with workers, contractors and communities.
- Verification of progress on each action in the environmental and social action plan (ESAP).
- Monitoring report with rated findings and agreed corrective actions.
- Reviews for specific milestones: disbursements, construction completion, start of operations.
Supporting the project with its reporting
- Preparation of periodic environmental and social reports for lenders.
- Organization of evidence and ESAP progress tracking.
- Preparing the team and contractors for monitoring visits.
- Corrective action plans and follow-up through to closure.
- Alignment audits against the IFC Performance Standards for operating assets.
What gets reviewed
- Status of the ESAP and of the environmental and social conditions in the loan agreement.
- Implementation of the environmental and social management system and contractor performance.
- Occupational health and safety: indicators, incidents and investigations.
- Labor conditions and worker grievances.
- Engagement, community grievances and social commitments.
- Progress on land acquisition and livelihood restoration.
- Implementation of the biodiversity action plan and monitoring results.
- Compliance with licenses and permits, and reports to the environmental authority.
One role per project. We act either as the lenders' independent consultant or as the developer's adviser, never in both roles on the same project.