THE WORLD BANK ENVIRONMENTAL AND SOCIAL

FRAMEWORK (ESF)
IMPLEMENTATION UPDATE

September 2020
 Abbreviations and Acronyms

AF Additional Finance
CESSO Chief Environmental and Social Standards Officer
CODE Committee on Development Effectiveness
CSO Civil society organization
EHSG Environmental, Health and Safety Guidelines
E&S Environmental and Social
ESS Environmental and Social Standards
ESA Environmental and Social Assessment
ESCP Environmental and Social Commitment Plan
ESF Environmental and Social Framework
ESF ISU Environmental and Social Framework Implementation Support
Unit
ESMS Environmental and Social Management System
ESP Environmental and Social Policy
ESRS Environmental and Social Review Summary
ESS Environmental and Social Standard
FI Financial intermediary
FPIC Free, Prior and Informed Consent
GBV Gender-based violence
GHG Greenhouse gas
GIA Group Internal Audit
GIIP Good International Industry Practice
GP Global Practice
GPN ESF Good Practice Note
GRS Grievance Redress Service
IEG Independent Evaluation Group
IFC International Finance Corporation
IPF Investment Project Financing
IPN Inspection Panel
LEG Legal Vice Presidency
LEGEN Environment and International Law Unit, LEG

ii
MDB Multilateral development bank
MDTF Multi-Donor Trust Fund
OHS Occupational Health and Safety
OPCS Operations Policy and Country Services
PID Project Information Document
PM Practice Manager
RSA Regional Environmental and Social Standards Advisor
SEA/SH Sexual Exploitation and Abuse/Sexual Harassment
SD Sustainable Development Vice Presidency
SDGs Sustainable Development Goals
SEP Stakeholder Engagement Plan
SORT Systematic Operations Risk-Rating Tool
OESRC Operations Environmental and Social Review Committee
WBG World Bank Group

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 THE WORLD BANK’S ENVIRONMENTAL AND SOCIAL FRAMEWORK (ESF)

IMPLEMENTATION UPDATE
CONTENTS

Executive Summary ........................................................................................................................ 1

I. Introduction ......................................................................................................................... 3
II. Implementation Activities ................................................................................................... 6
A. Data on ESF usage .............................................................................................................. 6

B. Enhancing World Bank staff skills and capacity ................................................................ 8

C. Updating Bank systems..................................................................................................... 10

D. Revising Bank processes................................................................................................... 10

E. Organizational structure and OESRC ............................................................................... 12

F. Borrower Capacity ............................................................................................................ 15

III. Strategic Partnerships........................................................................................................ 16

A. Coordination with other IFIs ............................................................................................. 16

B. CSOs ................................................................................................................................. 16

IV. Experience to Date ............................................................................................................ 17

V. Looking Forward .............................................................................................................. 23
VI. Conclusion ........................................................................................................................ 27
A. Progress and Prospects on ESF objectives........................................................................ 27

B. Monitoring and Evaluation ............................................................................................... 28

C. Conclusion ........................................................................................................................ 28

ANNEX 1: Data on ESF Implementation ..................................................................................... 29

iv
 THE WORLD BANK’S ENVIRONMENTAL AND SOCIAL FRAMEWORK (ESF)

IMPLEMENTATION UPDATE

EXECUTIVE SUMMARY

1. This paper provides an update to the Board on the implementation of the

Environmental and Social Framework (ESF) for Investment Project Financing (IPF) which
was approved by the Board in August 2016. The ESF subsequently became effective on
October 1, 2018. All new World Bank IPF, with Concept Note meetings on or after this date are
applying the ESF. This update takes stock focusing principally on the initial implementation period
of the ESF against the objectives as set out in the 2016 Board Paper on the ESF1.

2. Modernizing the safeguard policies has been one of the most complex policy reforms
undertaken by the Bank, requiring a considerable, sustained effort from Borrowers, the
Board and Management. This multiyear process included the largest consultation ever
conducted, reaching nearly 8,000 stakeholders in 63 countries.

3. Substantial work was done during this initial implementation period, including
enhancing Bank capacity and staff skills, changing Bank operational systems and processes,
beginning to build Borrower capacity at a general and project level, and launching an overall shift
in approach to environmental and social (E&S) risk management, including for enhanced
harmonization and communication with development partners. Efforts have also been made to
integrate the ESF into the Procurement Process, an important step as application of many aspects
of the ESF, particularly in projects involving large works, are under the day-to-day control of
contractors.

4. Implementation demonstrates progress on all five objectives set out in the 2016 Board
paper. However, substantial works remains in order that the ESF delivers consistently intended
improvements in E&S risk management at the project level.

5. Bank staff continue to have considerable, evolving needs in relation to the ESF. Most
of these needs were anticipated at the outset of ESF implementation and were planned for
accordingly, while others have become apparent through experience. The number of staff available
to help clients prepare E&S aspects of projects has increased considerably since 2016 but teams
need to be further strengthened to absorb the expected peak in workload as implementation ramps
up. E&S staff working in the regions need to apply the new standards to a pipeline of investment
projects, operate new systems, and continue to work with the Safeguards-based system in parallel.
They also support the increased demand for client-capacity building and training of Bank staff on

1
See “Review and Update of the World Bank’s Safeguards Policies: Environmental and Social Framework
(Proposed Third Draft)” August 4, 2016
[Link]
bank-safeguard-
policies/en/materials/board_paper_for_es_framework_third_draft_for_disclosure_august_4_2016.pdf

1
E&S issues. These demands must be delivered against the backdrop of changing reporting lines,
Bank systems and ADM responsibilities. Measures to strengthen accountability and oversight,
such as through revisions to the ADM, have created potential for some redundancy, through
additional reviews and clearance, which will need to be addressed. More work needs to be done to
ensure staff and Borrowers take advantage of the added flexibility and proportionality provided
under the ESF, including in terms of the timing of project documentation.

6. The ESF requires a broader scope of potential environmental and social risks and
impacts to be assessed and managed by Borrowers. Borrower capacity to manage E&S issues
is limited in many countries, making this a key challenge to the success of the ESF, especially in
FCV countries. In the first year of implementation, some Borrowers have not understood the need
for additional requirements and project documents under the ESF and questioned the perceived
increase in associated project preparation costs. At the same time, some Borrowers have welcomed
how the ESF integrates environmental and social issues during project preparation, and has thereby
brought together a wider range of national authorities into project development. Dialogue with the
Bank has also shown that the Environmental and Social Standards help aggregate many provisions
previously in use, either through national and international law (for example on child labor).
Additional support from task teams has been required to help clients better understand
requirements and ensure their obligations under the ESF are met. Issues relating to ESF
implementation that require particular attention from Borrowers include labor and working
conditions, non-discrimination and social inclusion, biodiversity, SEA/SH, and occupational
health and safety.

7. This paper reports progress on all objectives set out in the 2016 Board Paper,
challenges that persist, and requisite measures (including monitoring and evaluation) that
will be developed over the period leading to a five-year review in 2024. No major “course
corrections” are anticipated at this time.

2
 THE WORLD BANK’S ENVIRONMENTAL AND SOCIAL FRAMEWORK (ESF)
IMPLEMENTATION UPDATE
I. INTRODUCTION

1. This paper provides an update to the Board on the implementation of the

Environmental and Social Framework (ESF) for Investment Project Financing (IPF) which
began on October 1, 2018. The ESF applies to all new IPFs with Concept Note meetings on or
after this date. This update takes stock of the initial months of application of the ESF against the
objectives as set out in the 2016 Board Paper on the ESF2 and summarizes early lessons learned.

2. The ESF comprises a Vision Statement, a Policy and a set of ten Environmental and
Social Standards, all of which the Board unanimously endorsed when it approved the ESF.
The Vision Statement is aspirational and reflects the World Bank Group strategy, Twin Goals, and
the importance of human rights and the United Nations Sustainable Development Goals (SDGs).
The Policy sets out the objectives and requirements for the Bank’s due diligence, while the
Standards include the objectives and requirements for Borrowers.

3. The Board and Management explicitly recognized that the ESF has the potential to
create better long-term development outcomes. The ESF was developed in response to the 2010
Independent Evaluation Group (IEG) Review of the Safeguard Policies3 (Review) and the 2012
Approach Paper to CODE4 which set out the objectives and methodology for the Review. The
multiyear process of modernizing the safeguard policies was one of the most complex policy
revisions undertaken by the Bank. It included the largest consultation ever conducted by the
institution, reaching nearly 8,000 stakeholders in 63 countries over three consultation and review
phases5. Each review phase was discussed by the Executive Directors and benefited from their
feedback and guidance on how to proceed to the next stage. Importantly, the ESF achieved the
goal of harmonizing the environmental and social standards of the WBG, recognizing the public
and private sector distinctions among its institutions. Having done so, the ESF was approved by
the Board in August 2016.

4. The ESF builds on more than two decades of Bank experience in the implementation
of safeguard policies. Table 1 lays out the ten Environmental and Social Standards introduced in
the ESF, the previous safeguard policies, and some of the key new elements of the Standards. In

2
See “Review and Update of the World Bank’s Safeguards Policies: Environmental and Social Framework
(Proposed Third Draft)” August 4, 2016
[Link]
bank-safeguard-
policies/en/materials/board_paper_for_es_framework_third_draft_for_disclosure_august_4_2016.pdf
3
See “Safeguards and sustainability policies in a changing world: an independent evaluation of World Bank Group
experience” 2010 [Link]
policies-in-a-changing-world-an-independent-evaluation-of-World-Bank-Group-experience
4
See “Approach Paper for the World Bank’s Safeguard Policies Proposed Review and Update”, October 10, 2012.
[Link]
bank-safeguard-policies/en/materials/[Link]
5
These three phases are summarized in 2016 Board paper

3
particular, the Environmental and Social Standards have a more comprehensive approach to
environmental and social risk, particularly on social issues, given there were just two ‘social’
safeguard policies: Involuntary Resettlement and Indigenous Peoples. Moreover, the ESF
integrates environmental and social issues across all ten of the ESSs.

Table 1: ESF Environmental and Social Standards

Standard Building on New Key Elements

ESS1: Assessment and Management OP/BP4.01(Environmental Integrates Environmental and Social
of Environmental and Social Risks Assessment) Assessment; includes requirements
and Impacts related to non-discrimination and social
inclusion; proportionality and adaptive
management; use of the ESCP

ESS2: Labor and Working OP/BP4.01 (Environmental Prohibits child labor and forced labor,
Conditions Assessment) and EHS heightened focus on OHS, grievance
Guidelines mechanisms

ESS3: Resource Efficiency and OP4.09 (Pest Management) Promotes efficient management of
Pollution Prevention and and EHS Guidelines energy, water, and other resources and
Management materials; hazardous materials
management; pesticides; GHG assessment
mandate

ESS4: Community Health and OP/BP4.37 (Safety of Dams) Assess risks and impacts on communities;
Safety and EHS Guidelines Design of safe and resilient infrastructure,
equipment operation, products, services,
road safety, hazardous materials;
emergency preparedness

ESS5: Land Acquisition, OP/BP4.12 (Involuntary Greater clarity on treatment of state land,
Restrictions on Land Use and Resettlement) land titling, access to common resources,
Involuntary Resettlement voluntary transactions, forced evictions

ESS6: Biodiversity Conservation OP/BP4.04 (Natural Habitats) Expanded requirement to assess and
and Sustainable Management of and OP/BP4.36 (Forests) mitigate impacts on biodiversity including
Living Natural Resources in primary supply chains; biodiversity
offsets; management of living resources
in additional sectors (e.g. agriculture)

ESS7: Indigenous Peoples/Sub- OP/BP4.10 (Indigenous Clearer definitions of IP, requires FPIC in
Saharan African Historically Peoples) specified circumstances
Underserved Traditional Local
Communities

ESS8: Cultural Heritage OP/BP4.11 (Physical Cultural Enhanced consultation with affected
Resources) communities, intangible heritage

ESS9: Financial Intermediaries OP/BP 4.01 (Environmental Establish E&S procedures commensurate
Assessment) with FI nature, risk level and impact

4
 ESS10: Stakeholder Engagement Consolidates WB Meaningful consultation, access to
and Information Disclosure engagement provisions information and grievance redress through
the life of project

5. When the ESF was approved by the Board, it was envisaged that roll out would occur
in four distinct implementation phases: a preparation phase of at least 15 months, a launch
phase of approximately 6 months, an embedding phase of approximately 2 years, and a new
steady state thereafter. Significant progress has been made on implementation (covered in
Section II and III of this report), with some early lessons learned (Section IV). Substantial work
remains to be done to ensure the success of the ESF (Section V).

Figure 1. ESF Implementation phases6

6. The ESF seeks to achieve better development outcomes in IPF through five objectives
laid out in the 2016 Board paper. The ESF aims to:

• Address a wider range of environmental and social risks than under the Safeguard Policies
• Renew efforts to work with Borrowers’ institutions to build their national systems for
managing E&S risk
• Increase effectiveness, efficiency and timeliness of environmental and social risk
management
• Improve policy harmonization, coherence and alignment with development partners
• Enhance transparency through stakeholder engagement and information disclosure

7. These five objectives are used to inform this implementation update. Results are
derived largely from the preparation phase of projects using the ESF and projects applying the ESF
that have entered implementation.

6
Based on 2016 Board Paper, Figure 4 (pg. 43)

5
 II. IMPLEMENTATION ACTIVITIES

8. The ESF has been a complex undertaking in both roll-out and implementation. The
initial implementation period has focused on (i) enhancing Bank capacity and staff skills,
expanding the E&S workforce, training and real time support; (ii) changing Bank operational
systems and processes to facilitate implementation; (iii) beginning to build capacity of Borrowers
at general and project level and (iv) promoting an overall shift in approach to E&S risk
management, including harmonization and communication with development partners.

A. Data on ESF usage

9. All new IPFs with Concept Note meetings on or after October 1, 2018 apply the ESF.
Those projects with Concept Note meetings held prior to the ESF launch on October 1, 2018 will
continue to use the existing Safeguard Policies. The Safeguard Policies will run in parallel to the
ESF for about seven years.

10. In response to staff and Borrower feedback, in December 2018 Management

determined that for a one-year period, Additional Finance (AF) to scale-up activities of
existing projects governed by the Safeguard Policies could apply the Safeguard Policies
rather than the ESF. This would minimize disruptions to well-performing projects and allow
development benefits to reach beneficiaries most in need. There were strict requirements in place
for projects to qualify for this extension, including that activities to be financed by the AF should
not raise the Safeguards category for the project, nor trigger any new Safeguard Policies. This
transition period ended on December 31, 2019. Further, as part of the World Bank’s rapid response
to the COVID-19 pandemic, as of June 2020 teams were permitted to seek Management waivers
to enable the exceptional use of AF with the application of Safeguard Policies to scale-up existing
pre-ESF IPF operations. However, strict requirements have also been put in place for such
applications to qualify, and the waiver can only be applied to scale-up were it is determined that
the permitted activities are in support of the COVID-19 response (see para 45).

11. As of June 30, 2020, 540 projects, totaling $63.4 billion have had a Concept Note
review (or equivalent) under the ESF. See Figures 2-5 and Annex 1 for further data on ESF
usage. Note that the ESF applies only to IPFs.

6
 Figures 2&3: ESF vs. Safeguard Policies – Number of projects [as of June 30, 2020]

Pipeline – Active –
Number of projects under preparation Number of projects under implementation

Figures 4&5: ESF vs. Safeguard Policies – Volume of net commitments (US $M)
[as of June 30, 2020]

Pipeline Active

7
B. Enhancing World Bank staff skills and capacity

12. E&S staffing has significantly increased. Between FY17 and FY20, the World Bank
hired and trained more than 100 new Environmental and Social Specialists to address existing
staffing needs and support ESF implementation. Hiring has included acquiring new skills where
Bank management felt stronger staffing and accountability was needed, including related to
gender, Labor and Working Conditions, and Occupational Health and Safety (OHS). The majority
of these new hires are based in country offices and report to Practice Managers from the
Sustainable Development Practice Group.

13. An ESF Internal Capacity Building program was launched in November 2017. The
program aims to rapidly build Bank staff knowledge of the ESF through core training modules and
supplementary, in-depth thematic sessions. By June 30, 2020, 4,375 staff had completed an eight-
hour eLearning course. 3,797 staff had participated in in-person workshops on the ESF (or
equivalent online sessions following the start of home-based work). In addition, a series of topic-
specific Learning Labs, Clinics and Deep Dive courses on innovative aspects of the ESF are held
regularly, including on topics such as Labor and Working Conditions, Stakeholder Engagement,
Security Risk Management, and Social Assessment. The trainings emphasize both technical issues
and the cultural change inherent in the ESF, relying as it does on proportionality.

14. Drawing on lessons learned from accreditation of Procurement and Financial

Management Specialists, a professional accreditation program was designed and launched
for Environmental and Social Specialists working on projects under the ESF. As of end FY20,
nearly 200 Environmental and Social Specialists and PMs have been accredited.

15. A suite of tools has been developed to strengthen staff understanding of the ESF. On
October 1, 2018, an ESF Help Desk was established in OPCS to respond to inquiries from Bank
staff with respect to the ESF. Over 3,100 queries from staff have been fielded since it was
established. Initial queries focused on use of the newly-launched Environmental and Social
Management System (ESMS) and led to a series of Just-in-Time clinics for Bank staff on the
ESMS, the Environmental and Social Commitment Plan (ESCP) and other tools. Over time,
questions have shifted towards thematic issues (e.g. labor and working conditions, community
health and safety). To accelerate knowledge transfer on the ESF, a web-based SmartSearch tool
was built to allow Bank staff to quickly search the ESF, Guidance Notes and Good Practice Notes,
the World Bank Group Environmental Health and Safety Guidelines (EHSG), and other Bank
materials. Frequently asked questions to the ESF Help Desk were curated and uploaded into the
ESF SmartSearch to ensure consistency of response across Bank task teams.

16. The ESF has introduced changes which require staff to familiarize themselves with
new concepts, requirements and project documents, and to make use of increased room for
exercising judgement and proportionality. Staff are provided with multiple opportunities to
discuss changes in content and approach and to flag specific implementation challenges and
problems, and to ensure their resolution, including regular meetings with the Chief Environmental
and Social Standards Officer (CESSO), OPCS management and ESF Implementation Support Unit
leadership as well as their managers and directors.

8
17. A range of material has been developed to support the ESF’s implementation. This
includes eight Good Practice Notes (GPNs) for World Bank staff on topics including non-
discrimination and disability, gender and addressing Sexual Exploitation and Abuse/Sexual
Harassment (SEA/SH) in IPF involving Major Civil Works. GPNs are developed in partnership
with specialist advisers from inside and outside the Bank and are designed to be reviewed and
updated periodically, when appropriate. Templates for new project documents required under the
ESF have been published to aid staff and Borrowers and support consistency, as summarized in
Box 1. These materials are linked to training for staff and feature in Learning Labs and Clinics.

18. To learn from IFC’s experience with the Performance Standards, the World Bank
and IFC are collaborating on developing guidance material and tools relating to E&S risk
management. As an early example of this, the Bank and IFC are working together to update the
general EHSGs as well as developing new industry specific guidelines. The EHSGs are technical
reference documents with general and industry-specific examples of Good International Industry
Practice (GIIP) and are referred to in the ESF and in IFC’s Performance Standards.

Box 1: Non-mandatory ESF Supplementary Material

• Guidance Notes for Borrowers on ESS1-10

• Good Practice Notes for Staff on Gender; Non-Discrimination and Disability; Addressing
Sexual Exploitation and Abuse/Sexual Harassment in IPF involving Major Civil Works;
Third Party Monitoring; Assessing and Managing the Risks and Impacts of the Use of
Security Personnel; Road Safety; Non-Discrimination: Sexual Orientation and Gender
Identity (SOGI); Dam Safety
• Interim Guidance on Conducting an Overview Assessment
• Advisory Note on Technical Assistance and the ESF
• Greenhouse Gas Emissions Accounting Under the ESF

Templates and checklists:

• Stakeholder Engagement Plan Template
• Grievance Redress Mechanism Checklist
• Tip Sheet for Project Screening and Preparing Concept Stage Environmental and Social
Review Summary (ESRS) and Project Information Document (PID)
• Environmental and Social Commitment Plan Template and associated Tip Sheet
• Environmental and Social Review Summary Concept Stage Template
• Tip Sheet for Project Screening and Preparing Concept Stage Environmental and Social
Review Summary and Project Information Document
• Environmental and Social Review Summary Appraisal Stage Template
• Labor Management Procedures Template

19. In July 2020, Group Internal Audit (GIA) published an audit of the Bank’s internal
ESF capacity, concluding that significant progress had been made by Management with the
preparation, launch and embedding of the ESF. The report noted internal ESF capacity would
further benefit from ongoing change management efforts and completion of accreditation of staff
assigned to ESF projects.

9
C. Updating Bank systems

20. Implementation of the ESF has provided an opportunity to introduce streamlined

processing, data capture, monitoring and reporting. An Environmental and Social
Management System (ESMS) was developed to facilitate quality and compliance reviews, manage
reporting of E&S issues and risks in IPF. It records the Bank’s due diligence for project-related
E&S risks and impacts. The ESMS was also developed to capture projects’ E&S management
performance within a single system, helping with portfolio monitoring. The Bank’s Operations
Portal has also been updated to ensure operations comply with ESF procedures.

21. An ESF data monitoring system has been built into the ESMS covering issues across
all Environmental and Social Standards. Over 100 project characteristics are tracked, such as
worker types involved, whether water use impacts are relevant, and whether the project involves
the use of security personnel. This systematic data capture supports corporate risk and performance
monitoring and allows for reliable and timely E&S information.

22. To help Bank staff fulfill their obligations regarding disclosure of E&S documents,
an integrated Disclosure Tool has been incorporated into the ESMS. The tool simplifies
categorization of E&S documents and streamlines their disclosure. By clarifying document
categories, this tool also makes it easier for external stakeholders to find disclosed project
documents.

23. The ESF has been integrated into model legal agreements. Management developed a
set of standard covenants to reflect key ESF obligations for Borrowers and ensure their
enforceability. These covenants relate to the direct applicability of the Environmental and Social
Standards to IPF.

D. Revising Bank processes

24. The revised business processes required by the ESF have been defined for each stage
of the project cycle, integrated across IPF policy, procedures and guidance, as well as within
the ADM framework. Continuing attention will be required to ensure that processes are as
efficient as possible while maintaining compliance with the ESF. Revisions to processes include:

- A new Bank Directive, the “Environmental and Social Directive for Investment
Project Financing”7, sets out the mandatory requirements for staff regarding the
implementation of the Environmental and Social Policy. The Directive applies to all
new IPF operations with Concept Note meetings held on or after October 1, 2018. The
Directive was updated again in July 2019 to reflect the realignment of operational units
(para 27), in January 2020 following changes to Additional Finance requirements (para 10)
and is under revision now to reflect the realignment of reporting lines on July 1, 2020.

7
“Environmental and Social Directive for Investment Project Financing” OPS5.03-DIR.113, January 28, 2020
[Link]
a195-055e06f7f3fd

10
 Figure 6 summarizes the accountability and decision making (ADM) requirements as
outlined in the Directive, as well as other key decision-making roles.

- Revision to the Accountability and Decision Making (ADM) framework. An ADM

revision was made on October 1, 20188 for project supervision and management of E&S
risks under the ESF. These changes included assigning specific ADM roles to the Practice
Managers (PMs) of the Environment and Social Development teams in the oversight of
E&S risks under the ESF. These were put in place to require greater management attention
to project supervision, promote cross-matrix ownership of portfolio risks and outcomes,
and support successful implementation of the ESF. This required revision to associated
systems, and familiarizing task teams and CMUs staff with the new requirements to ensure
compliance.

- The “Directive on Addressing Risks and Impacts on Disadvantaged or Vulnerable

Individuals or Groups”9 was issued alongside the ESF and sets out the Bank’s due
diligence obligations relating to the identification of, and mitigation of risks and impacts
on disadvantaged or vulnerable individuals or groups.

25. Quarterly regional risk reviews enhance a shared understanding of the E&S risks in
a portfolio and foster a collaborative and resource-efficient approach to managing such risks.
These meetings are chaired by the CESSO and are jointly organized by OPCS, the Regions, SD
and LEGEN. These meetings confirm the subset of projects that are high risk and of corporate high
risk from an E&S perspective; identify projects that merit enhanced support from Regional
Environmental and Social Standards Advisors (RSAs) or advice and guidance at Director level. In
addition, the meeting can refer systemic or thematic issues or specific projects to the Operations
Environmental and Social Review Committee (OESRC) for advice (see paras 29-31). The meeting
also addresses compliance issues in projects that were escalated to the Grievance Redress Service
(GRS) or Inspection Panel (IPN).

26. Updated risk guidance explicitly describes how ESF risk assessments and ratings feed
into risk assessments for each WB-financed operation via the Systematic Operations Risk-
Rating Tool (SORT). This guidance, and associated training for task teams and managers,
describes how the ESF risk assessment and rating methodology differs from other SORT risk
ratings: E&S risk ratings under the ESF during preparation capture inherent (or ex-ante, pre-
mitigation) risk, whereas other SORT risk ratings assess and reflect residual risk (the risk after
mitigation is applied). The higher of the E&S ratings becomes the combined E&S risk rating,
which is entered directly from the ESMS into SORT. Task teams are not able to override the E&S
risk rating but may consult with the specialists with any questions.

8
See Kiosk announcement “Changes to Support Enhanced Supervision and ESF Implementation”, November 1,
2018: [Link]
[Link]
9
“Bank Directive on Addressing Risks and Impacts on Disadvantaged or Vulnerable Individuals or Groups”,
EXC5.07-DIR.117, August 4, 2016,
[Link]
b787-7e1e775f29d5

11
E. Organizational structure and OESRC

27. World Bank operational units have gone through two realignments since the launch
of the ESF. The first, in July 2019, saw the creation of Regional Departments, Global Departments
and a dedicated ESF Implementation Support Unit reporting to the Vice President for Sustainable
Development. This was built upon by an organizational realignment in July 2020, to help further
enhance focus on country programs and strengthen delivery models for regional programs. As of
July 1, 2020:

- OPCS continues to be responsible for ESF interpretation and guidance (including

Directives, Guidance and good practice), and works closely with the RSAs (who are placed
organizationally with RVPs and have a dotted line to OPCS), Regional and Global Practice
Sustainable Development units and the ESF ISU.
- The Sustainable Development (SD) Regional Directors report to the Regional Vice
Presidents, with a dotted line to the SD Practice Group Vice President. They oversee the
budget and the delivery of country and regional programs of their Practice Group and are
full members of the Regional and PG leadership teams. They are responsible for ensuring
that the E&S PMs allocate staff in a manner commensurate with the risk and specific needs
of each project and that policies are fully complied with, while applying the flexibility and
proportionality embedded in them.
- E&S Specialists report to the Environment and Social Practice Managers (PMs).
- E&S Global Directors are accountable for global program delivery, knowledge
management (creation, dissemination, and usage), and leading corporate talent
management exercises such as talent review, rotation/mobility, and career planning.
- The ESF Implementation Support Unit (ISU) is housed in the SD Vice Presidency. The
ISU provides advice to operational teams on the ESF. Recognizing that the ESF is currently
in the early stage of implementation, the ISU will phase out by June 2022.

28. E&S risk management under the ESF has several facets. At its core is the project-
specific ADM, involving E&S Practice Mangers (PMs), RSAs and the project task teams, which
include E&S specialists (Figure 6). This project-specific ADM is informed and supported by a
broader range of actors, including SD Regional Directors and the CESSO.

12
 Figure 6: Environmental and Social Framework –
Key decision-making roles and accountabilities

29. The OESRC is an advisory body that meets weekly and is chaired by the CESSO.
Other members of the Committee include the Manager for E&S Standards, OPSPF; Global
Directors for the ESF ISU; the LEGEN Chief Counsel; and one principal and one alternate
Regional Director of Strategy and Operations and Regional SD Director, rotating every year.

30. The OESRC is available to provide advice and decisions on complex or sensitive E&S
aspects of Bank operations. In this respect, the OESRC can support the CESSO (as the decision-
maker) as and when needed in interpreting the ESF, E&S Directives, guidance and materials
directly related to the ESF, and assists the CESSO in advising on their application and
interpretation; and can provide advice to Bank task teams in situations in which the application of
the Directive on Addressing Risks and Impacts on Disadvantaged or Vulnerable Individuals or
Groups could expose such individuals or groups to risk of harm. Where needed, the Committee
considers the project-specific circumstances and the risk of harm and may advise the task team
whether to proceed with the project and, if so, on what basis. The CESSO considers bringing to
the OESRC for its consideration E&S issues that have corporate relevance, including those that
are thematic, sectoral, and related to general policy or process interpretation.

31. Since the launch of the ESF, the OESRC has issued guidance and decisions on
Technical Assistance and the ESF, PPAs and managing E&S risks for the Carbon Fund of the
Forest Carbon Partnership Facility (FCPF) Emission Reductions Programs. It has also provided

13
advice on specific projects, such as the Brazil Salvador Social Multi-Sector Service Delivery
Project II and the application of ESS7.

32. The Grievance Redress Service (GRS) is an avenue for people and communities to
raise environmental and social issues if they believe a World Bank-financed operation has or
is likely to adversely affect them. It provides a single-entry point at the corporate-level for
complaints, as part of the World Bank’s accountability structure between project-level grievance
mechanisms (GMs) and the World Bank’s Inspection Panel. The GRS seeks to address issues
quickly and effectively, works collaboratively to help achieve long-lasting solutions and serves as
a tool for early identification of potential project-level issues. It strengthens the learning process
by drawing attention to sectors or areas that call for further consideration or improvement.
Furthermore, the GRS provides an avenue to keep World Bank Senior Management informed of
potential environmental and social risks, which can assist in determining whether institutional
action may be warranted across the entire World Bank portfolio.

33. The GRS has four core functions:

- Complaints-handling: The GRS facilitates prompt responses to grievances by providing

support to World Bank task teams to address issues raised by project-affected people and
other stakeholders.

- Advisory: The GRS identifies systemic issues and lessons learned by analyzing complaints
received across sectors and regions. It also provides training for World Bank staff on
complaints handling and resolution.

- Monitoring and reporting: The GRS together with World Bank task teams monitor the
implementation of agreements reached between complainants and Borrowers. The GRS
reports on the status of complaints through a monthly Status Report to World Bank Senior
Management and a log of complaints published on its external website.

- Outreach and communications: The GRS maintains an external website

([Link] which includes information on how to file a complaint
with the GRS. The GRS also produces information material and conducts outreach to
enhance understanding of the GRS.

34. The GRS continually reviews means to improve services it provides to project-
affected communities, resolving project-level complaints with an aim to maximize the
development impact of projects. A GRS-strengthening exercise began in 2019 and is ongoing.
Measures to enhance the GRS include hiring additional staff, developing new procedures and
practices to ensure consistent approaches to handling grievances, maintaining confidentiality,
using a risk-based approach for addressing grievances, addressing the risk of retaliation, enabling
a suite of dispute resolution mechanisms and developing a roster of expert mediators to facilitate
resolution of complaints. An updated case management system launched in 2020 will support the
efficient functioning of the GRS and oversight on response time, while facilitating necessary
analytics for reporting on Key Performance Indicators (KPIs) and lessons learned. Furthermore,
outreach is being strengthened so that affected communities are increasingly aware of their ability
to access the GRS. The processes will include escalation of high-risk cases for the attention of the

14
Managing Director of Operations, based on defined criteria. The President will chair a Grievance
Redress Council to review the GRS caseload and performance and to provide oversight on specific
high-risk cases, as necessary. These actions address the findings of a 2019 Group Internal Audit
(GIA) assurance report on the GRS, as well as feedback from different stakeholders.

F. Borrower Capacity

35. Building the capacity of Borrowers to meet the ESSs, is critical to the effectiveness of
the ESF, and will continue to be central to implementation. Following Board approval of the
ESF, an Awareness Raising program for Borrowers was developed and launched. Between
February 2018 and May 2019, over 6,000 participants in Borrower countries participated in
Awareness Raising workshops on the ESF in over 100 country locations. Workshops were
customized to reach different groups: senior Government officials, staff of Project Implementation
Units, in-country bilaterals and multi-laterals, CSOs, academics, and private sector
representatives. The workshops focused on presentation and open discussion of the ESF,
substantial requirements of the Environmental and Social Standards and key innovations.
Evaluations from those sessions confirmed the relevance, utility and overall value of the training,
but also a need for wider, continuous outreach. To further support Borrower training and awareness
raising, as of Sept 2019, the same eLearning taken by Bank E&S Specialists is available to
Borrowers and other stakeholders. Several countries have expressed interest in working with the
Bank to improve their own institutions and capacities to manage E&S risk.

36. An important ambition of the ESF is the use of national environmental and social
systems in the assessment, development and implementation of projects, where such use can
help achieve the ESF objectives. Achieving this ambition involves enhancing the capacity of
Borrowers both with regard to the process of environmental and social assessment and specific
technical issues which may not yet be addressed in national systems. The provisions in the ESF
for the use of Borrowers Frameworks have not yet been taken up at the project level. However, to
support the design of capacity building measures, the ESF provides the option of conducting an
Overview Assessment at a Borrower’s request to identify aspects of the existing system that can
be strengthened and to support the design of capacity building measures. Interim Guidance on
conducting an Overview Assessment has been issued and is currently being piloted in selected
countries. In these countries, government counterparts have welcomed the opportunity to identify
aspects of national systems that can be strengthened and ways in which to do this, particularly
when this reflects their own strategic development priorities. Over the course of the past year,
several countries have initiated assessments to review legal, regulatory and institutional capacity
gaps, with a view to strengthen Borrower E&S management systems.

15
 III. STRATEGIC PARTNERSHIPS

A. Coordination with other IFIs

37. Since the inception of the ESF, the World Bank has reached out to other IFIs,
particularly MDBs and bilateral agencies, to support convergence of environmental and
social standards. Outreach has included through the MFI Working Group on Environmental and
Social Standards, at the World Bank Annual and Spring Meetings and a series of specially
convened meetings. To encourage convergence, the World Bank co-hosted with KfW well-
attended meetings in Frankfurt in December 2018. EBRD, EIB and other European bilateral
agencies took part. Similar meetings were co-hosted with JICA in Tokyo in June 2018, with
bilateral and multi-lateral agencies based in Asia, including JBIC, Korean EXIM Bank, Australian
DFAT, Asian Development Bank (ADB) and private consulting firms. KfW has now adopted the
Environmental and Social Standards for public sector projects. JICA is currently updating its
Guidelines for Environmental and Social Considerations (2010) and is looking to harmonize their
new guidelines with the ESF. The Inter-American Development Bank and Asian Development
Bank are updating their environmental and social policies and the World Bank has been working
with them in this process. This dialogue was followed up with an event for all MDBs, represented
by their heads of E&S risk management teams, in Paris in May 2019. Further discussions on this
topic were held at a senior level event at the Annual Meetings in October 2019 and follow up
among MDB principals in November 2019.

38. During the initial implementation period of the ESF, there has been modest uptake
in developing a common approach to risk management at project level. Of the projects that
apply the ESF for Board approval, relatively few have gone with joint-financing with other
development partners. However, joint-financing, for example with the AIIB, has not been inhibited
by the ESF and, in fact, should become more frequent as familiarity and confidence develops in
the application of the Environmental and Social Standards and other MDBs, such as EBRD and
IADB, converge around elements of the ESF.

B. CSOs

39. CSOs have continued to show interest in the ESF following its launch, offering
feedback and insight in some areas. There have been dedicated events on the ESF at the Civil
Society Policy Forum (CSPF) held at the time of the World Bank Group Annual Meetings and
Spring Meetings; each of these events has drawn approximately 100 CSO representatives. These
have provided a regular engagement with CSOs, especially those from Borrower countries. OPCS
has also met informally on several occasions with some of the CSOs most focused on the ESF, to
maintain open communication and help understand their interests and concerns. The Social
Development Global Practice (GP) has also had regular, bi-monthly interactions with CSOs on
ESF implementation, especially on ESS10. The CSOs taking part in these discussions have paid
particular attention to stakeholder engagement, treatment of disadvantaged or vulnerable
individuals and groups, accountability and transparency, and how local CSOs can become
involved at the project level. They have also been interested in discussing the first examples of
ESF project documents, such as SEPs and ESCPs. They welcome enhanced coverage of E&S
issues in some areas but are watching the initial stages of ESF implementation to understand how
they are being operationalized.

16
 IV. EXPERIENCE TO DATE

40. Experience with the ESF is preliminary as a high degree of projects using the
Environmental and Social Standards are still under preparation. Nevertheless, some useful
findings and interim measures are indicated.

41. Increased effectiveness and adaptability:

- Integration of ESF into the Procurement Process: Application of many aspects of the ESF,
particularly in projects involving large works, are under the day-to-day control of contractors.
To assist Borrowers and Bank task teams alike, the Standard Procurement Document (Request
for Bids Works) has been revised to incorporate relevant aspects of the ESF. This is intended
to reduce time taken to prepare bid packages, allowing the Borrower to focus on aspects of risk
mitigation specific to the project. For example, contracts for Works now reflect the ESF
requirements on child and forced labor, community and occupational health and safety, supply
chain and inspections and SEA. Furthermore, targeted training for Bank staff relating to labor
and working conditions has been expanded to include discussion of procurement-related issues
and issues relating to contractors.

- Reviewable Risk Classification: Training for Bank staff has reinforced the ESF’s principle of
proportionality, which allows additional resources and more experienced staff to be focused
on higher-risk projects. Risk classification under the ESF replaces three static categories (A /
B / C) with four more readily adjustable categories (High / Substantial / Moderate / Low); this
allows for greater precision and differentiation. It also builds on the risk classification system
under the safeguard policies by better accounting for Borrower capacity and commitment as
well as the specific context in which the project will be implemented. As the risk classification
is reviewed on a regular basis and may be adjusted throughout the life of a project, risk
management and allocation of resources and oversight by the Bank in exercising its due
diligence may also change.

- Environmental and Social Assessment: ESS1 (Assessment and Management of Environmental

and Social Risks and Impacts) sets out clearly and concisely how all projects are subject to
environmental and social assessment (ESA). The process of ESA enables the Bank, Borrower
and project-affected people to understand the risk, impacts and potential benefits of the Bank
financed project, while also reflecting multiple factors, including the type and extent of risk,
the timing for development of the project, and national law requirements.

- Increased transparency around Borrower commitments: Experience from the initial

Environmental and Social Commitment Plans (ESCP) and feedback from Bank task teams
indicated that some standardization and revisions to the template would be helpful. In response,
additional guidance has been being provided and examples of good practice are being
identified, but more remains to be done. The ESCP summarizes the measures and actions the
Borrower will take to achieve compliance with the Environmental and Social Standards over
the life of the project. The use of the ESCP is key to ensuring that E&S risk management is
completed, acknowledging that some of this work can only be done during project
implementation. Disclosure of the ESCP provides transparent, timely and relevant information
to project stakeholders.

17
- More Systematic Stakeholder Engagement: Every project under the ESF must prepare a
Stakeholder Engagement Plan (SEP) proportionate to the nature and scale of the project and
its potential risks and impacts. The SEP reflects the emphasis on stakeholder engagement as a
process to be carried out throughout the life of a project. Given the initial projects applying the
ESF have only recently entered their implementation phase, it is too early to tell how this
important feature of stakeholder engagement under ESS10 will be followed throughout the
project cycle, however, the focus on stakeholder engagement has been an important feature of
project design.

42. Covering a wider range of risks: The ESF has helped prompt dialogue with Borrowers
on specific E&S risks relevant to their own national development agendas. Such topics include
labor and working conditions, treatment and inclusion of disadvantaged and vulnerable groups,
the increased role of financial intermediaries in development, and the specific challenges of
working in fragile and conflicted-affected environments. Examples are presented in the
accompanying boxes.

- Labor and Working Conditions: ESS2 (Labor and Working Conditions) was vigorously
discussed prior to approval of the ESF by the Board. In the context of the ESF, the early
introduction of labor management procedures in project preparation has been key to identifying
and managing risks. In some cases, discussions with the Bank on labor management have
helped bring national authorities together to discuss the issues. In practice, ESS2 aggregates

Box 2: Working with Borrowers on Labor and Working Conditions

ESS2 is one of the most challenging Standards for staff and Borrowers to implement, given the
new requirements it introduces, including on occupational health and safety, treatment of
different categories of workers, grievance mechanisms, workers organizations and emphasis
on non-discrimination and equal opportunity. Labor Management Procedures (LMP), required
under ESS2, is also a new project document. ESS2 is relevant to over 95% of projects applying
the ESF to date, generating a significant demand for guidance and resources.

In some projects, clients argue that the new requirements are excessive and that some elements
of ESS2 are beyond their responsibility. A lack of Borrower capacity and experience on labor
and working conditions makes dialogue challenging and requires additional input from Bank
task teams. At the same time, E&S specialists have had to build their knowledge in this field
and draw on the expertise of colleagues to support Borrowers, while meeting their own due
diligence responsibilities. In some projects, dialogue on labor issues with the World Bank, as
well as with PIUs and contractors, has been constructive. These Borrowers recognize that many
aspects of ESS2 are reflected in their national labor laws and international conventions to
which they are a party. The LMP serves as an early planning tool that helps identify and manage
potential issues.

To support meeting the challenges of implementing these labor issues, additional resources
have been provided to Bank task teams including dedicated training workshops and Deep Dive
courses focused on labor management; development of guidance materials and templates; and
the creation of a Labor and Working Conditions Community of Practice to help share
experiences and expertise across the Bank.

18
 many provisions previously in use, either through national and international law (for example
on child labor) or in the World Bank Group’s Environmental Health and Safety Guidelines
(especially on occupational health and safety). The Standard takes into account good practice
being employed by other MFIs and the IFC’s Performance Standards and introduces more
precision into key concepts such as the classification of project workers.

- Disadvantaged and Vulnerable Groups: The ESF strengthens the Bank’s commitment to
inclusion. ESS1 requires assessing barriers to disadvantaged and vulnerable groups accessing
project benefits as well as potential risks and impacts that could affect them disproportionately.
ESS10 (Stakeholder Engagement and Information Disclosure) supports systematic
identification of disadvantaged and vulnerable groups through stakeholder mapping and
planning the different forms of engagement required through the SEP. An associated
Directive10 lays out the Bank’s due diligence obligations specifically with regard to these
individuals or groups. The initial feedback from Bank task teams is that these have allowed for
a more structured dialogue with Borrower’s inclusion issues.

- In support of such disadvantaged and vulnerable groups, ESF provisions on non-discrimination

have already been applied across projects in social sectors to strengthen inclusion. For
example, when the Cambodia Health Ministry asked the World Bank to help finance the Pre-
Service Training for Health Workers project (P169629), which aims to improve the quality of
education for health professionals, the task team saw applying the ESF as an opportunity to
Box 3: ESF and Disability Inclusion

Through its requirements on non-discrimination, the ESF strengthens the Bank’s commitment
to disability inclusion. One practical example is the Ghana Accountability for Learning
Outcomes Project (GALOP), a World Bank-financed project which promotes access,
participation, and learning for children with disabilities. Various stages of the project design
and ESF project documents reflect this. The Stakeholder Engagement Plan (SEP) identified
persons with disabilities and teachers among the key stakeholders to be included in project
consultations. The social assessment identified several challenges to education for children
with disabilities, including inadequate disability-responsive school infrastructure, teaching
resources and teacher skills, and the lack of a differentiated curriculum.

To address these challenges, GALOP is focusing on improving service delivery and the
enabling environment to promote disability inclusion. Activities include improved data
collection, inclusion of parents of students with disabilities in School Management
Committees, teacher training on screening, early identification, and provision of adapted
teaching and learning materials, and provisions for the assessment of students with disabilities
within the National Assessment Strategy to ensure that these improvements are monitored. As
the project moves through implementation, the ESF will continue to provide a framework for
promoting disability inclusion, including through stakeholder consultation throughout the life
of the project.

10
Bank Directive: Addressing Risks and Impacts on Disadvantaged or Vulnerable Individuals or Groups (August 4,
2016) [Link]
4ea0-b787-7e1e775f29d5

19
 help integrate inclusion into the project's design. The project was strengthened to include a
comprehensive study of the representation of women and ethnic minorities in the medical field,
providing special support to actively promote the enrollment of disadvantaged groups (ethnic
minorities, people living with disabilities, and women), as well as teaching good internal
practices on health care waste management.

43. Fragility, Conflict and Violence (FCV): The application of the ESF in the context of FCV
situations is a challenge, given low capacity and often volatile conditions. The ESF does not have
a separate procedure for FCV situations, but the flexibility built into the ESF can be combined
with strengthened Bank support to governments, with more direct support and additional
resources. The FCV strategy acknowledges the importance of risk management in such contexts
while noting that the preparation of the ESF instruments (as with the Safeguard Policies) can be
deferred to project implementation as long as the project has a detailed timetable for delivery of
the instruments to ensure that they are in place prior to the start of any activities that could result
in negative environmental or social impacts.

Box 4: Operationalizing the ESF in Somalia

Low capacity and volatility make ESF implementation in FCV contexts particularly
challenging. The Somalia Urban Resilience Project Phase II (SURP2) is an example of a World
Bank financed project addressing these challenges head on. Somalia is emerging from two and
half decades of conflict and fragility. Women and girls, as well as minority groups and
internally-displaced persons, face disempowerment and discrimination. The environmental and
social assessment conducted under the project has identified disparities between men and
women that may be exacerbated during project implementation, in areas such as exclusion from
stakeholder engagement activities, priority in hiring, pay rates for similar work, safe working
conditions as well as health and sanitary facilities in the work place. SURP2 proactively applies
the differentiated measures of the ESF to ensure engagement of women in project activities
including (i) involvement of female members in stakeholder engagement processes; (ii) job
opportunities in subprojects’ civil works and fair working conditions (including provision of
maternity leave and nursing breaks where relevant, and suitable toilet and washing facilities,
separate for men and women workers); and (iii) provision of special assistance to female-
headed poor households in mitigation of possible resettlement impacts.
While incidence of Sexual Exploitation and Abuse (SEA) in Somalia is a significant contextual
and project-related challenge, SURP2 addresses potential SEA risks with mitigation measures
recommended in the ESF Good Practice Note “Addressing Gender-Based Violence” (such as
the use of codes of conduct; community sensitization; hiring of GBV experts for project
implementation and monitoring; collaboration with relevant service providers; and
establishment of grievance mechanism with procedures and channels to enable safe,
confidential and ethical reporting of GBV incidents).

20
44. Financial Intermediaries (FI): To address the growing role of financial intermediaries in
development programs, ESS9 (Financial Intermediaries) works across various FI structures, to
cascade Environmental and Social Standard requirements down through institutions and
subprojects with their own fit-for-purpose Environmental and Social Management Systems
(ESMS).
Box 5: Applying ESS9 in Tunisia

To tackle high unemployment, Tunisia has initiated a series of reforms to stimulate startups
and incentivize SMEs. In this context, the World Bank is supporting the Tunisia Financing
Innovative Start-Ups and SMEs project, where the Caisse des dépôts et consignations (CDC)
– a state-owned fund - will provide financing to two funds that will invest in 280 innovative
start-ups and existing SMEs. This project is the first to apply ESS9 of the ESF.

While the CDC, a repeat client of the World Bank, was open to transition from the Bank’s
safeguard policies utilized under their prior Bank-financed projects to the ESF, they initially
lacked the capacity to prepare certain required documents such as Labor Management
Procedure and Environmental and Social Commitment Plan.

Working with the World Bank task team, CDC quickly came to appreciate the elements of
ESS9 including establishment of an ESMS to manage and monitor subproject environmental
and social risks and impacts. The ESMS put in place as part of the World Bank-financed project
is now a tool which CDC uses across their entire subproject portfolio. Furthermore, application
of the ESF brought the CDC an awareness of the importance of stakeholder engagement,
including enhanced consultation, participation and accountability.

45. COVID-19 Pandemic Response: The World Bank moved quickly to help developing
countries address the potential health, economic and social and environmental impacts of the
pandemic. This was possible by making full use of policy flexibilities, including those of the ESF,
by establishing a fast-track facility for COVID-19 response and using a dedicated operational
approach under the Multiphase Programmatic Approach (MPA). Examples of such action include
the following:

- In April 2020, the Board approved the COVID-19 Strategic Preparedness and Response
Program (SPRP) and the first package of projects to address the pandemic in 25 countries. The
SPRP utilizes the MPA, which allows fast track preparation of similar projects as part of a
global emergency response program and enables a coordinated and effective response to
COVID-19 by borrowing countries facing similar emergency needs (including assistance with
disease containment, diagnosis, and treatment). Once the Board approved the overall MPA,
Management was able to move quickly to commit funds for projects. The MPA presented to
the Board provided clarity on how the ESF would be applied to address potential
environmental, health and social impacts.

- A team in OPCS was established to work closely with HD, LEG, SD (Social and Environment)
and EFI (Governance) to support the response. Lead contacts were designated across
instruments and fields to ensure coherent and consistent advice and lessons across all COVID-

21
 19 Fast Track operations, included a team of two E&S PMs and one RSA to cover the clearance
process for E&S issues, with oversight by the CESSO. Expedited processing timelines were
used and documentation was based on simplified project templates. This approach enabled the
Bank to have crisis response programs running in over 100 countries in a just a few weeks.

- The ESF was applied as designed with its inherent flexibility, helping meet the demands of
this evolving response. Given the complexity of the environmental, health, social and worker
and community protection risks associated with COVID-19, new guidance was issued
addressing the specific circumstances of the emergency response, including medical waste
management, use of military/security forces, stakeholder engagement and labor management
procedures.

- To maximize the financing tools and instruments available to the Bank and its Borrowers for
the response, as of June 2020, teams were permitted to seek Management waivers to enable
exceptional use of Additional Financing (AF) with the application of Safeguard Policies to
scale-up existing pre-ESF IPF operations.11 OPCS issued guidance on preparing these waiver
requests, including a waiver template and guiding questions to help teams address COVID-19
specific risk considerations, such as discrimination and social inclusion, meaningful
consultation, SEA/SH, exposure to COVID-19 and use of security forces. OPCS also
established a dedicated team to review these waivers, working with RSAs and task teams. 13
AF waivers have been processed as of September 20th, totaling $830 million in AF.

11
See Kiosk announcement “COVID-19 Operations: Management Waiver for Exceptional Use of Additional
Financing under Safeguard Policies to Scale-up Ongoing Pre-ESF IPF Projects”, June 1, 2020.
[Link]
for-exceptional-use-of-additional-financing-under-safeguard-policies-to-scaleup-ongoing-preesf-ipf-projects--
[Link]

22
 V. LOOKING FORWARD
46. Significant work was completed during the initial ESF implementation period, but
much more will need to be done to ensure the success of the ESF. Much of this work was
accounted for, but resources and planning will need to be responsive to emerging issues and lessons
learned from implementation. Going forward, the following areas are among those that will require
considerable attention.

Environmental and Social Standards

47. From the outset, the Bank acknowledged that areas of the ESF with a broad range of
stakeholder views would present challenges in developing and implementing a new system
for E&S risk management. Particularly challenging areas include non-discrimination and social
inclusion, labor and working conditions, stakeholder engagement, and sexual exploitation, abuse
and harassment. Looking forward, these areas will require additional guidance and training for
staff, support for Borrowers in understanding and implementing requirements as well as associated
E&S project documents and tools, and close attention to building on early lessons learned and
ensuring consistency across application of the Standards.

- Non-discrimination and social inclusion. The Safeguard Policies did not explicitly require
project design to take into consideration whether there were certain groups (other than
Indigenous Peoples) who faced obstacles to participating in project benefits, who might be
adversely affected due to their status. The ESF explicitly faces this challenge, and insists not
only on assessment of whether there is the threat of discrimination, but also how to design
projects to be socially inclusive.

- Labor and working conditions. Given requirements under ESS2 and new E&S project
documents (including the Labor Management Plan), demand for advice and support is expected
to increase as the IPF portfolio under the ESF grows.

- Stakeholder engagement. One of the innovative aspects of the ESF is the requirement for
stakeholder engagement throughout the life cycle of a project, not just during project
preparation. This will require monitoring stakeholder engagement over the life of a project,
consulting with communities regarding project developments and ensuring Stakeholder
Engagement Plans are properly resourced. This implies longer-term monitoring, requiring
more work from staff and Borrowers. Work will also be needed to build the body of evidence
and experience on the inclusion of disadvantaged and vulnerable groups, as required under
ESS10 and the Directive on Disadvantaged or Vulnerable Individuals or Groups.

- SEA/SH - SEA/SH represents a significant contextual and project-related risk for some Bank-
financed projects, particularly in FCV countries (see Box 4 for example). While the ESF does
not explicitly mention SEA/SH, the Framework is designed to address such emerging risks, an
important feature for its long-term relevance. Training, tools, staff capacity and in-house
expertise is being scaled up to identify and manage SEA/SH risks. The ESF Good Practice
Note (GPN) “Addressing SEA/SH in Major Civil Works” is among the most widely read of
the GPNs and is being supported by training sessions on this issue. Integrating the ESF into
the procurement process has strengthened how SEA/SH is addressed in procurement and has
also driven staff demand for additional training and guidance.

23
- Other topics. Examples of other issues in the ESF on which there is little experience to date
but which will likely provide new lessons and demand increased attention include:

- Ecosystem Services (ESS1 para 28a, ESS 4, and ESS 6): risks and impacts, and coverage
in environmental and social assessment, are likely to emerge in the IPF portfolio.

- GHG emissions (ESS3 para 16): this will require refinement of technologies and Bank
assistance in cases where Borrower capacity is limited. The reporting of gross GHG
emissions, as required of Borrowers under the ESF, versus reporting of net GHG emissions,
as required under the Bank’s Climate Corporate Commitment, will require additional
guidance to Bank task teams.

- Free, Prior and Informed Consent (FPIC) (ESS7 section B): the application of the new
criteria and requirements around FPIC is expected to be closely scrutinized by Borrowers
and Beneficiaries and informed by emerging good practice.

- Intangible cultural heritage (ESS8): international good practice relating to intangible

cultural heritage is limited and evolving. Knowledge and skills on the topic are expected
to grow. In many cases this will be complemented by national and local expertise.

Borrower Capacity

48. Applying the ESF is often more demanding on Borrowers, requiring more explicit
consideration of a wider range of E&S risks in some areas (e.g., labor, non-discrimination,
stakeholder engagement) and new project documents (e.g., ESCP, LMP, SEP). For countries
with weaker institutional capacity and limited resources, this can be a considerable challenge. A
scaled-up Borrower Capacity Building program is required to support those Borrowers in meeting
these requirements and to further Borrower ownership of the E&S risk management process. This
requires new ways of working and additional resources.

- Borrower Capacity Building program. A comprehensive program for strengthening client

country E&S capacity is under design. As set out in the 2016 ESF Board paper, it is expected
that the Borrower Capacity Building program will be launched in FY21 with the aim of helping
to embed good practice for environmental and social sustainability and E&S risk management
within national systems. The priority focus of the program will be on low capacity countries,
countries affected by fragility and conflict, and on small island developing states.

- FCV. Close attention will be paid to the application of the ESF to FCV countries. The
combination of volatile contexts and low capacity may challenge the application of the
Environmental and Social Standards even further, while the security situation makes project
monitoring and evaluation extremely difficult. Attracting and committing Bank staff to these
countries is a priority.

- E&S documentation. The ESF introduces new project documents (e.g. ESCP, SEP) and
expands requirements for the content of others. This expansion poses some challenges for a
range of Borrowers, particularly in high and substantial risk projects, as they may have to cope
with an already heavy documentation process. Often it falls on the Bank to help Borrower’s in

24
 understanding how to complete these documents, while also providing guidance and training
to the Borrower.

- Use of Borrower Frameworks. The provisions in the ESF for the use of Borrowers
Frameworks have not yet been taken up at the project level. However, as outlined above (para
36), several countries are engaged in Overview Assessments (under para 29 of the E&S Policy)
as a first step in analyzing gaps between Borrower frameworks and the Environmental and
Social Standards, indicating areas for specific capacity building. Bank-supported projects can
also be an important channel to strengthen client E&S management systems. There are several,
ongoing efforts to strengthen Borrower E&S management systems through dedicated projects,
project components or trust funded activities, including in Ethiopia, Nigeria, Kenya and
Burkina Faso.

- Common Approach. Work remains to be done to build on the current modest uptake in
developing a common approach to E&S risk management at project level. This common
approach will be important to help minimize different requirements being placed on Borrowers
and optimize projects’ Borrower capacity building potential.

Bank systems and processes

49. The Bank’s first Environmental and Social Management System (ESMS) and
complementary processes are operational, but they will need to be regularly reviewed,
maintained and updated to reflect changes in policy and experience and make the
systems more efficient. Potentially unnecessary repetition in review and clearance from
these systems and the ADM, will need to be identified and addressed. At the same time,
Bank staff will continue to be trained and supported on the use of the ESMS so as to
maximize its potential benefits and strengthen its monitoring functions.

- Changes to the Accountability and Decision-making (ADM) framework. The update to

the ADM for IPF operations will need continued monitoring and review to illuminate
potentially unnecessary repetition and socialization to ensure that Bank staff understand
their respective ADM roles.

- Parallel E&S risk management systems. The ESF and Safeguard Policies will run in
parallel for the next six or seven years, until all projects under the safeguard policies are
closed. While two E&S risk management systems are in operation, support and training in
both the ESF and the Safeguard Policies will need to be provided; that said, training on the
Safeguard Policies will phase out over time. Directors, managers, RSAs and the ESF ISU
will all continue to support and mentor Bank staff with regard to both the ESF and the
Safeguard Policies.

World Bank staff skills and capacity

50. Bank staff recruitment and training was frontloaded to train staff ahead of ESF-
related discussions with Borrowers. Additional E&S Specialists are regularly hired, onboarded,
and trained. Steps will need to be taken to address the increased workload placed on E&S
Specialists, as they apply the new standards to a pipeline of investment projects and continue to

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work with the Safeguards-based system in parallel, all while addressing the increased demand for
client-capacity building and training of Bank staff on E&S issues.

- Training. Over 4,000 staff have been trained in the ESF; that said, eLearning, and both in-
person and distance-learning workshops will need to continue at their current pace to meet
demand and scale-up around high-demand topics (e.g., labor management). This will allow
coverage of units with comparatively low training uptake as well as new Bank staff. New topic-
specific ESF Learning Labs, Just-in-Time Clinics and Deep Dive courses will also be
developed, filling knowledge gaps. Feedback will help identify areas where Bank staff training
needs to be enhanced.

- Accreditation. By the end of FY20, nearly 200 E&S Specialists and PMs have received ESF
accreditation. This represents a significant commitment in Bank staff time and resources. By
the end of FY21, ESF accreditation will be mandatory for all E&S Specialists working on
projects applying the ESF.

- Supplementary material. The initial rollout of templates and other supplementary material
prioritized issues faced in early stages of the project life cycle (e.g., ESRS Concept and
Appraisal Stage templates, ESCP Tip Sheet). These resources will be augmented as the IPF
portfolio covered by the ESF matures. E&S Specialists have expressed interest in
complementing these templates and tip sheets with good examples of completed E&S project
documents (e.g., Stakeholder Engagement Plans, Labor Management Plans).

- Change Management. It will take time for Bank staff to fully familiarize themselves with
concepts, requirements and project documents introduced under the ESF. As with all new
policies, this will require continued management support, informed by monitoring and
stakeholder feedback. The new approach to risk classification will also require attention from
staff and continuing support from management as experience grows.

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 VI. CONCLUSION
A. Progress and Prospects on ESF objectives

51. Initial implementation of the ESF demonstrates progress on all five objectives set out
in paragraph six above. While it is still at its early stages, Management believes the ESF will
provide the intended improvements in environmental and social risk management at project level.
As with the introduction of the IFC Performance Standards, it will take time and incremental gains
to maximize the ESF’s potential.

52. With this progress, challenges have also emerged in the initial implementation which
will need to be addressed. In particular, the activities described in section five require extra effort,
resources and vigilance. Borrower capacity, particularly in FCV, will be crucial to the ESF’s long-
term success. The COVID-19 pandemic has further added to the demands on Borrower capacity
and Bank implementation support. Bank staff and Borrowers need to continue to improve their
understanding on how to apply the provisions of the ESF that provide a wider scope of coverage,
taking into account the principles of proportionality and adaptive risk management.

53. Against the five ESF objectives, progress and prospects are summarized as following:

- Addressing a wider range of environmental and social risks – Bank due diligence as reflected
in Environmental and Social Review Summary documents together with Borrower project
documentation already reflect the uptake on the broader coverage of the ESF. Protections for
labor and working conditions under ESS2 and for disadvantaged or vulnerable groups under
ESS1 are examples, although they occasionally represent some of the most challenging in
terms of dialogue with Borrowers and Borrower capacity to implement. The Bank will
continue to support the implementation of the Environmental and Social Standards through a
sustained effort of training, guidance and good practice materials. Evidence of improved
development outcomes will be collected over time but the full degree of impact may not be
wholly evident before the five-year review due in 2024.

- Renewed efforts to work with Borrowers’ institutions to build their national systems for
managing E&S risk - The initial ESF implementation has reached a wide audience and driven
a demand for more in-depth training and specialist implementation support. Borrowers with
low capacity, FCV countries and small island developing states will need additional assistance.
Overview assessments under ESS1 may provide productive first steps in dialogue on capacity
building.

- Increasing effectiveness, efficiency and timeliness of E&S risk management - Apart from
the immediate gains of greater precision on terminology and accountabilities, it is too early to
reach findings on this objective. Borrowers and Bank task teams are still learning how to take
proper advantage of the added flexibility and proportionality provided under the ESF. With
respect to this point, the efficiencies of using the ESCP are also not fully apparent, especially
in understanding and supervising the Borrower’s E&S commitments. Efficiency has also been
impacted by the introduction of new project documents to an already heavy documentation
process and possible repetition in review and clearance processes under the new ADM. When
the ESF was approved by the Board, Senior management reported (paras 29-38 of the 2016
Board paper) that any offset through efficiency savings of the increased resources needed for

27
 ESF implementation would be incremental and hard to measure. Management will continue to
monitor these objectives at both Borrower and Bank levels

- Policy convergence, coherence and alignment with development partners – Discussions with
development partners on E&S coordination are progressing. In some cases, development
partners have adopted the Environmental and Social Standards as their own (e.g., KfW),
whereas in others (such as the IADB and EBRD) they are poised to provide the basis for
harmonization of requirements at project level. However, there is more to be done in this area.
The Bank will continue to use relevant fora to pursue this objective such as during the World
Bank Annual Meetings, the MFI working groups and the International Association for Impact
Assessment (IAIA).

- Enhanced transparency through stakeholder engagement and information disclosure – As

required, 100% of projects applying the ESF have produced Stakeholder Engagement Plans
(SEPs). Initial feedback from Bank task teams indicate that this has provided a valuable avenue
for identification of, and engagement with, disadvantaged and vulnerable groups and has
promoted Borrower transparency with project-affected and other interested parties. Some
important elements of ESS10, such as stakeholder engagement throughout the life cycle of a
project, cannot be assessed at this time. The use of ESCPs is also supporting information
disclosure through the summary and disclosure of the measures and actions the Borrower will
take to achieve compliance with the Environmental and Social Standards over time. The Bank
will continue to update good practice as it emerges through technical notes and templates,
including experience from grievance mechanisms.

B. Monitoring and Evaluation

54. The five ESF objectives will form the framework of a monitoring and evaluation
approach, to be developed by management. Each objective will be evidenced at the project level
by a set of both quantitative and qualitative indicators. Given that the development impacts of the
ESF will take several years to fully materialize, some data on development outcomes will be more
qualitative, including interpretation of information extracted from ISRs and ICRs. However, much
active quantitative data on the implementation of the ESF at the project level can be taken from
the ESMS. This framework will be employed for subsequent annual reviews and refined through
practice for the larger five-year review to be carried out in 2024.

C. Conclusion

55. This paper reports progress on all five objectives, challenges that persist, and
requisite measures that will be developed over the period leading to a five-year review
carried out in 2024. No major “course corrections” are anticipated at this time. More effort on
supporting Borrower capacity is anticipated, accompanied by more detailed results framework for
the Environmental and Social Standards.

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 ANNEX 1: DATA ON ESF IMPLEMENTATION

Unless otherwise stated, all data in this section is as of June 30, 2020

Figures 7&8: Number and volume (US$ M) of ESF IPFs in portfolio, by Region

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Figures 9&10: Number and volume (US$ M) of ESF IPFs in portfolio, by Practice Group

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