ENVIRONMENTAL AND SOCIAL FRAMEWORK

ESS1
Assessment and Management
of Environmental and
Social Risks and Impacts
GUIDANCE NOTE
DECEMBER 2025

ASIAN DEVELOPMENT BANK

 CONTENTS

ABBREVIATIONS .................................................................................................................... iii

I. INTRODUCTION ................................................................................................................ 1
II. OBJECTIVES ..................................................................................................................... 1
III. SCOPE OF APPLICATION ................................................................................................ 1
IV. REQUIREMENTS ............................................................................................................... 2
A. Associated Facilities...................................................................................................... 5
B. Existing Facilities .......................................................................................................... 6
C. Common Approach ....................................................................................................... 7
D. Environmental and Social Assessment and Management ........................................... 8
E. Environmental and Social Commitment Plan and Environmental and
Social Action Plan ....................................................................................................... 16
F. Environmental and Social Assessments in Fragile and Conflict-Affected Situations .. 18
G. Monitoring, Adaptive Management, and Reporting .................................................... 19
H. Stakeholder Engagement and Information Disclosure ............................................... 21
I. Use of Borrower’s Environmental and Social Systems ............................................... 21
J. Environmental and Social Approach to Financing Modalities and Products ............... 23
K. Management of Contractors ....................................................................................... 23

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 ABBREVIATIONS

ADB Asian Development Bank

E&S environmental and social
EHSG Environmental, Health, and Safety Guidelines
ESAP environmental and social action plan
ESCP environmental and social commitment plan
ESF Environmental and Social Framework
ESMF environmental and social management framework
ESS Environmental and Social Standard
GIP good international practice
GN guidance note
SEAH sexual exploitation, abuse, and harassment

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This guidance note is part of a series of documents that guide borrowers/clients on the application
of the Environmental and Social Standards (ESSs), which form part of the Asian Development
Bank’s (ADB’s) Environmental and Social Framework (ESF).1 The guidance notes help to explain
the requirements of the ESSs; they are not policy, nor are they mandatory. The guidance notes
do not replace the need to exercise sound judgment in making project decisions. In case of any
inconsistency or conflict between the guidance notes and the ESSs, the provisions in the ESSs
prevail. Each paragraph of the ESS policy provision is highlighted in a box, followed by the
corresponding guidance. Words in the ESS provisions highlighted in blue are the terms defined
in the ESF.

The borrower/client is responsible for project development and implementation in line with the
ESSs. Activities, techniques, and methods recommended in the guidance note could either be
directly applied by the borrower/client or by consultants under borrower/client supervision.

Note: This document is a working document and may be amended from time to time.

This working document is being disclosed to the public in accordance with ADB's Access to
Information Policy. By making any designation of or reference to a particular territory or
geographic area, or by using the term “country” in this document, ADB does not intend to
make any judgments as to the legal or other status of any territory or area.

1 Asian Development Bank (ADB). 2024. Environmental and Social Framework.

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 I. INTRODUCTION

1. This Environmental and Social Standard (ESS) 1 sets out the borrower’s/client’s
responsibilities for screening and scoping, assessing, managing, and monitoring
environmental and social (E&S) risks and impacts of a project, in a manner proportionate
to the nature and scale of the potential risks and impacts.

2. The ESSs are collectively designed to help the borrower/client manage the E&S risks
and impacts of a project, and improve E&S performance, through a risk- and outcomes-based
approach. Each ESS sets out the objectives, followed by specific requirements to help the
borrower/client achieve these objectives through means that are appropriate to the nature and
scale of the project and proportionate to the level of E&S risks and impacts.

II. OBJECTIVES

a. Screen and scope, assess, manage, and monitor the E&S risks and impacts of a
project in a manner consistent with ESS1 and other applicable ESSs.
b. Adopt a mitigation hierarchy approach to (i) anticipate and as a first priority, avoid
E&S risks and impacts; (ii) where avoidance is not possible, minimize or reduce E&S
risks and impacts to acceptable levels; and (iii) once E&S risks and impacts have
been minimized or reduced, mitigate, restore, and/or compensate for adverse
impacts on the environment and project-affected persons.
c. Require that a project be environmentally and socially sound and sustainable, and
support the integration of E&S considerations into the project decision-making
process.
d. Adopt differentiated measures so that adverse impacts do not fall disproportionately on
the disadvantaged or vulnerable, considering gender-related risks, and ensure they
are not disadvantaged in sharing development benefits and opportunities resulting from
a project.
e. Promote improved E&S performance, in ways which recognize and enhance
borrower/client capacity.

III. SCOPE OF APPLICATION

3. The requirements of ESS1 and other ESSs apply, to the extent such ESSs are
determined to be applicable, to ADB-financed and/or ADB-administered sovereign and private
sector projects and their components regardless of the source of financing, including
investment projects funded by a loan, a grant and/or other means, such as equity and/or
guarantees, hereafter broadly referred to as projects. A project’s legal agreement describes a
project, which in turn, helps identify the E&S requirements that apply to a project. The approach
for the assessment and management of E&S risks and impacts for projects across different
financing modalities and products offered by ADB is explained in paras. 62−63 of ESS1 and in
Part IV of the Environmental and Social Framework (ESF).

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Guidance note (GN) 3.1. ESS1 is the overarching ESS that explains the overall requirements for
assessing and managing all E&S risks and impacts that an ADB-financed and -administered
project may create or exacerbate. For specific financing modalities and products, the ESSs will
need to be read together with Part IV of the ESF to understand the specific requirements for
assessing and managing E&S risks and impacts under each modality.

4. The ESSs do not apply to activities that are not part of a project, nor to activities that
the borrower/client implements following project completion without financing support from
ADB, with the exception of associated facilities as set out in paras. 16−17.
4.
5. \
5. The application of ESS1 and other ESSs to associated facilities, existing facilities, and
those projects or components cofinanced with other parties are described in paras. 16–21.

6. The borrower/client will ensure that a project does not include activities on the Prohibited
Investment Activities List in Part V of the ESF.

GN6.1. The project design, along with monitoring measures and actions in the environmental and
social commitment plan (ESCP) or environmental and social action plan (ESAP) and legal agreement,
will confirm that the project does not include activities on the Prohibited Investment List described in
Part V of the ESF, which does not qualify for ADB financing. Any new activity considered during project
implementation should not fall within the Prohibited Investment Activities List.

IV. REQUIREMENTS

7. The borrower/client will meet all requirements under the ESSs applicable to a project
and will provide ADB with information reasonably requested to ascertain the appropriate E&S
risk classification of a project in accordance with the E&S Policy in Part II of the ESF. The
assigned E&S risk classification will form the basis for scoping, assessing, and managing a
project’s E&S risks and impacts.

GN7.1. Risk screening, scoping, and classification begin at the project concept stage and play a
key part in ADB’s project appraisal process. ADB assesses E&S risks and contextual risk factors
when screening a project to assign the E&S risk classification and establish a foundation for a robust
project design and timely preparation of E&S assessments. A borrower/client contributes to the
screening process by providing data and any other required information, ensuring that risk
screening remains factual and evidence based. This approach benefits the borrower/client and ADB
in managing the project effectively and efficiently.

8. Based on the E&S risk classification, the borrower/client will determine, in consultation
with ADB, the scope of the E&S assessment in section D for screening, assessing, managing,
and monitoring the E&S risks and impacts of a project in accordance with the relevant ESSs,
proportionate to the nature and scale of its potential E&S risks and impacts.

GN8.1. Scoping of the E&S assessment will be aligned with the applicable ESSs and
proportionate to the nature (type) and scale (magnitude) of the project, as well as the severity and
likelihood of potential E&S risks and impacts. This will integrate E&S considerations effectively
and proportionately to the risk level throughout the project cycle.

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GN8.2. When evidence is lacking, but the nature, scale, and potential impact of a project indicate
significant risk, adopting a precautionary approach in risk assessment is essential. This approach
acknowledges uncertainty while ensuring that appropriate mitigation measures are in place to
prevent unforeseen adverse effects. By considering comparable projects, industry standards,
expert opinions, and potential worst-case scenarios, risks can be identified in a conservative
manner. This enables proactive risk management, ensuring that the E&S assessment process
remains robust, even in the absence of definitive data.

9. The borrower/client will ensure that the E&S assessment addresses, in an integrated
way, all direct, indirect, and cumulative E&S risks and impacts such that relevant E&S
factors, including those set out in para. 26 (i) and (ii) and relevant contextual risks are
considered comprehensively and in a non-fragmented manner, throughout the concept design,
preparation, and implementation phases of a project cycle together with any project-specific
issues raised by ADB or identified by the borrower/client.

GN9.1. The E&S assessment avoids fragmentation by examining how risks and impacts
interrelate across time and space rather than treating them in isolation. Beginning early in the
project preparation phase allows for the integration of potential risks and impacts from the outset,
strengthening the overall approach to risk identification and mitigation (refer to para. 26 and
related guidance on the E&S factors to consider). It is possible that E&S risks and impacts that
were not identified during concept design and project preparation could arise during project
implementation. Regular monitoring will identify these risks and impacts, enabling adaptive project
management to address them appropriately in coordination with ADB (refer to GN43.1 on
adaptive management).

GN9.2. Direct risks and impacts are E&S risks and impacts caused by a project and occur
contemporaneously at the location. These are easily identifiable and measurable, and are effects
of changes to the environment and people as a direct result of the project's activities and within
project control and influence.

GN9.3. Indirect risks and impacts are E&S risks and impacts caused by a project and are later in
time or farther removed in distance than a direct impact, but are still reasonably foreseeable. They
might not be immediately apparent, but are still attributable to the project. Indirect impacts result
in whole or in part from the chain of causation caused by an activity but are not the first link in that
chain. The E&S assessment will identify all known indirect impacts and explain the effects that
are not known but are reasonably foreseeable. Reasonably foreseeable means those that are
predictable, probable, or likely to occur. Risks and impacts that are merely possible, or
speculative, are not reasonably foreseeable.

GN9.4. Cumulative risks and impacts are the E&S risks and impacts of a project when added to
impacts from other relevant past, present, and reasonably foreseeable developments, as well as
unplanned but predictable activities enabled by a project that may occur later or at a different
location. Cumulative impacts can result from individually minor but collectively significant activities
taking place over a period. Cumulative impacts include impacts generally recognized as important
based on scientific concerns and/or reflecting the concerns of project-affected persons.

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 10. Throughout the E&S assessment process, the borrower/client will identify project-
affected persons that may be disproportionately affected by a project because of their
disadvantaged or vulnerable status. Where such disadvantaged or vulnerable persons are
identified, the borrower/client will undertake the assessment of the risks and impacts to identify
and implement differentiated measures to mitigate the adverse impacts and ensure the
project’s adverse risks do not fall disproportionately on them. The borrower/client will ensure
that, through these measures, such disadvantaged or vulnerable persons can share equitably
in the benefits and opportunities resulting from a project. The design of these measures and
their implementation will consider the particular circumstances of such persons, project, and
country context, including the legal, governance, and institutional framework of the host
country and other factors set out in para. 37, to the extent possible and as determined by ADB.

GN10.1. By adopting an intersectional approach, the overlapping vulnerabilities faced by individuals

who may belong to different types of disadvantaged or vulnerable groups can be addressed.
Intersectional approaches offer ways to understand and respond to different factors that intersect
to shape individual identities, thereby enhancing awareness of people’s specific needs, interests,
capacities, and experiences. It recognizes that these factors are not static and will shift and change
over time, thereby affecting their ability to participate and benefit from projects. Refer to ESS10 and
its guidance note for the requirements for identifying and engaging in meaningful consultation with
disadvantaged and vulnerable individuals and groups to understand their needs and concerns.

11. The borrower/client will comply with the host country’s applicable laws, including
those laws implementing the host country’s obligations under international instruments.
Where requirements of the host country’s applicable laws differ from ESS requirements, the
borrower/client will achieve or implement whichever is more stringent or protective of the
project-affected persons and/or the environment. The borrower/client will also apply the
requirements of relevant good international practice (GIP) and other internationally
recognized standards such as the World Bank Group’s Environmental, Health, and Safety
Guidelines (EHSGs), as required under the relevant ESSs.

12. Where the borrower/client proposes less stringent standards than those provided in
applicable GIP or EHSGs, as required under the relevant ESSs, the borrower/client will provide
a detailed assessment and justification for the proposed less stringent standards. In this
justification, the borrower/client will demonstrate, to the satisfaction of ADB, that the choice of
any less stringent standard is consistent with the objectives of the ESSs and the applicable
GIP or EHSGs, and is unlikely to result in significant environmental or social harm.

13. The borrower/client will ensure that all E&S assessment requirements under the
relevant ESSs have been identified and undertaken to the extent possible to the satisfaction
of ADB to enhance E&S readiness of a project.

GN13.1. Through the E&S assessment process, the borrower/client will identify the assessments
that need to be undertaken for a project and agree with ADB on the timing of these assessments
under the relevant ESSs. All assessments will be undertaken to the extent possible before
appraisal or final credit approval (unless agreed as per para. 14), to allow ADB and the
borrowers/clients to enhance E&S readiness and make an informed decision at the time of
appraisal or final credit approval, whether to proceed further with the approval of a project.

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GN13.2. E&S readiness means the project has completed specific E&S requirements necessary
for project start-up prior to project approval by ADB. This includes timely preparation of E&S
assessment and management documents, that project procurement documents (particularly for
civil works contracts) include appropriate E&S considerations, and that borrower/client capacity
for implementation of E&S assessment and management documents has been assessed as
adequate and/or any measures to fill gaps between borrower’s/client’s capacity and required
capacity for the project have been agreed with ADB. Enhancing E&S readiness is key to smooth
project implementation, understanding contractors’ responsibilities, and may also result in
reduced overall transaction costs.

14. The borrower/client will develop an environmental and social commitment plan (ESCP)/
environmental and social action plan (ESAP) for a project as detailed in paras. 41–47,
implement all measures and actions set out in the ESCP/ESAP, and conduct monitoring and
reporting on the E&S performance of a project against all applicable ESSs as set out in the
ESCP/ESAP.

A. Associated Facilities

15. For the purpose of the E&S Policy and the ESSs, the term associated facilities means
new facilities or activities that are not funded as part of a project and, in the judgment of ADB,
are (i) directly and significantly related to the project; (ii) developed, or contemporaneously
planned to be developed, with the project; and (iii) necessary for the project to be viable and
would not have been developed if the project did not exist. This determination on the
associated facilities will be made by ADB on a case-by-case basis based on the project
circumstances and context.

GN15.1. There are many circumstances in which certain facilities are not funded as part of an
ADB-financed project but are necessary for the project to function properly. Another financial
institution or the borrower/client may fund these facilities. For a new facility or activity associated
with the project to be considered an associated facility, it will need to meet all three specified
criteria.

GN15.2. Directly and significantly related to the project means that the facilities or activities may
be physically, geographically, or functionally related to the project in a direct and significant way.

GN15.3. Facilities or activities carried out or planned to be carried out contemporaneously with
the project do not need to exist or occur during the exact same period as the proposed ADB
project. However, at the time of project design and preparation, adequate information on these
facilities or activities should be known to ADB and the borrower/client to assess (i) and (iii), and
they should occur within the period from project identification to project completion.

16. The borrower/client will ensure that the E&S assessment and management provisions,
consistent with ESS1 and other ESSs, apply to associated facilities, to the extent that the
borrower/client has control or influence over the associated facilities.

GN16.1. Refer to GN18.1. for an explanation of control or influence.

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 17. Where ADB determines that the requirements of the common approach under para. 21
or the requirements of other multilateral or bilateral agencies or organizations are likely to
address the E&S risks and impacts of the associated facilities to achieve E&S outcomes
through meeting the objectives materially consistent with the ESSs, the borrower/client may
agree with ADB to apply such requirements, instead of the ESSs, to the associated facilities.

GN17.1. Refer to GN21.1. for an explanation of the common approach.

18. The borrower/client will be required to demonstrate the extent to which it cannot
exercise control or influence over the associated facilities, providing details of the
considerations for such a determination. If the borrower/client does not have control or
influence, the E&S assessment for a project will still identify and consider the E&S risks and
impacts that may be presented by the associated facilities to the project.

GN18.1. Where the borrower/client has limited or no control or influence over the associated
facilities, the E&S assessment will identify the parties and their roles with respect to the associated
facilities to demonstrate the extent to which they cannot exercise control or influence on such
parties. The E&S assessment will also include details of the relevant considerations for such a lack
of control or influence, which may include legal, regulatory, and institutional factors. Furthermore,
even if the borrower/client has limited or no control or influence, the E&S assessment will identify,
consider, and document the risks and impacts that these associated facilities may present to the
project, to the extent possible based on the availability of and access to the required information to
undertake the assessment.

19. When a new facility or activity that is related to the project does not meet the conditions
in para. 15, the borrower/client will undertake a high-level E&S risk assessment of such a new
facility or activity to the extent possible based on the information available to the borrower/client
at the time of project preparation, documenting the scope of potential issues and future
management issues to be determined.

GN19.1. A high-level E&S risk assessment for a new facility or activity that is not identified as an
associated facility involves evaluating the potential E&S risks and impacts related to the new
facility or activity to understand what future assessments and development of management
measures may be needed for such a facility or activity. The scope of this assessment depends
on the availability and accessibility of the information required to undertake it.

B. Existing Facilities

20. For a project that includes existing facilities or activities as a component, the
borrower/client will undertake an E&S audit, including an on-site assessment, to identify past
or present concerns related to E&S risks and impacts. The scope of the E&S audit will be
proportionate to the nature and scale of the E&S risks and impacts of the existing facilities or
activities, and it will be undertaken by qualified and experienced specialists. As part of the
audit, the borrower/client will analyze the legal, governance, and institutional framework for the
existing facilities or activities, including the issues set out in para. 37, any existing operating
permits and licenses, and existing plans developed to address specific E&S risks and impacts
for the existing facilities or activities, and where applicable, any E&S requirements of the
financiers of the existing facilities or activities. If such audit identifies any past or present E&S

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 risks and impacts, the audit will propose and justify measures and actions to correct and/or
mitigate such E&S risks and impacts, estimate the cost of such measures and actions, and
recommend a schedule for implementing them. The proposed measures and actions will
depend on a project’s intended use of existing facilities or activities and the intended purpose
of the ADB financing, and will also take into account the technical and financial feasibility of
such measures and actions. Modifications to, or new components of, such existing facilities
or activities financed by ADB will meet the requirements of the applicable ESSs.

GN20.1. The existing facilities or activities are those owned and/or controlled by the
borrower/client and are part of the project. Qualified and experienced specialists will conduct the
E&S audit, ensuring a thorough and accurate assessment proportionate to E&S risks and impacts
based on the terms of reference agreed with ADB.

GN20.2. The audit will analyze the status of the main E&S risks and impacts of the existing
facilities and activities, and the mitigation measures being applied. Where mitigation measures
are not being implemented for any reason, the E&S audit will assess the reason/s and the ongoing
impacts and potential risks. As part of the E&S audit, the borrower/client will also assess legacy
issues associated with such facilities. Legacy issues such as unaddressed pollution and
unresolved grievances are problems that arose in the past and persist with the existing facilities
and activities, regardless of the original source of funding for the existing facilities or activities.

GN20.3. The E&S audit will propose measures and actions to correct and/or mitigate past or
present E&S risks and impacts, provided they are consistent with the intended use of the existing
facilities or activities and the intended purpose of the ADB financing. For example, a project to
finance the early retirement of a facility with no physical activity, financed by ADB, will not
undertake an audit with the aim of upgrading E&S requirements to comply with ESSs. In this case,
the audit will focus on compliance with the requirements that are in place for the facility and
consider technically and financially feasible measures and actions that are consistent with the
intended early retirement of the facility and the intended use of the funds.

C. Common Approach

21. Where ADB is cofinancing a project with other multilateral or bilateral agencies or
organizations, and where appropriate, the borrower/client will cooperate with ADB and such
cofinancier(s) to agree on a common approach in the E&S assessment, development, and
implementation of a project. A common approach will be acceptable to ADB, provided that such
an approach is likely to address the E&S risks and impacts of a project to achieve E&S
outcomes through meeting the objectives materially consistent with the ESSs. The common
approach will apply the requirements among the cofinancier(s) that are most stringent or
protective of the project-affected persons and/or the environment, as appropriate. In
determining whether the common approach is acceptable, ADB will consider the policies,
standards, and implementation procedures of the multilateral or bilateral agencies or
organizations, as applicable. ADB, the cofinancier(s), and the borrower/client will agree on the
E&S arrangements, including the applicable E&S requirements and the roles and responsibilities
of the respective parties under the common approach as early as possible during project
preparation and no later than at the time of project appraisal or final credit approval. These
arrangements will be reflected in the ESCP/ESAP and the E&S performance will be measured
against the common approach. A common approach will apply to the associated facilities
financed by the same cofinancier(s) if agreed by ADB and the borrower/client.

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GN21.1. A common approach facilitates cooperation among the borrower/client, ADB, and other
financing agencies and organizations, avoids duplication, encourages efficient use of resources
for a project, increases the development impact, and supports joint-capacity development
activities. A common approach, if agreed upon, applies to the E&S assessment process
throughout the project cycle with the aim of ensuring consistency and alignment of E&S
requirements among all parties involved. The E&S arrangements for the common approach will
be documented and justified in a project document.

GN21.2. When a common approach is proposed for the associated facilities, the borrower/client
will share with ADB information on existing collaboration with the proposed cofinancing agency
or agencies. This information will allow ADB to determine whether an already-agreed approach
to assessment and management of E&S risks and impacts for the associated facilities is
appropriate for a common approach.

22. Where ADB is financing a project for which certain E&S assessments have already
been undertaken and E&S assessment and management documents have been prepared
as required under the common approach, the borrower/client may rely on such E&S
assessment and management documents prepared using the agreed common approach, if
such reliance is agreed by ADB. Where certain E&S assessments have already been
undertaken and E&S assessment and management documents have been prepared in
compliance with the requirements of other multilateral or bilateral agencies or organizations
but where there is no agreed common approach, the borrower/client may rely on such E&S
assessment and management documents only if such documents meet the requirements of
the relevant ESSs and agreed by ADB.

GN22.1. ADB may rely on the existing E&S assessment and management documents if they
comply with the requirements of the common approach or the relevant ESSs, if there is no
common approach for the project.

D. Environmental and Social Assessment and Management

23. The term E&S assessment is a generic term used in the ESF to describe the process
of analysis and planning used by the borrower/client to ensure that the E&S risks and impacts
of a project are assessed and managed proportionate to the nature and scale of the potential
E&S risks and impacts of a project. The E&S assessment is the primary tool used by decision
makers to inform project design and determine whether the project is environmentally and
socially sustainable.

GN23.1. The key steps of the E&S assessment process in relation to the project cycle include:

(i) risk screening to determine the potential E&S risks associated with the project and
classifying the risks based on their severity and likelihood throughout the project cycle;
(ii) scoping to establish the extent of the E&S assessment process, deciding which aspects
of the project need detailed analysis, and engaging with stakeholders to understand
their concerns and raise their expectations, which helps in defining the scope accurately;
(iii) conducting an assessment based on the risk level employing various tools and
methods, such as environmental and social impact assessments, to gather data and
analysis;

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 (iv) preparing management plans that outline measures to mitigate identified risks, with
the complexity of these plans matching the project's risk level and ensuring
mitigation measures are proportionate to the risks; and
(v) implementation and monitoring, including reporting on the status of the
implementation of E&S requirements, and proposing adjustments to the E&S
management measures based on monitoring results so they remain effective and
proportionate to the evolving risks.

24. The borrower/client, in consultation with ADB, will determine the scope of the E&S
assessment based on the E&S risk classification of a project. Based on this scope, the
borrower/client will undertake an E&S assessment of a project, in an integrated manner, and
assess all relevant direct-, indirect-, and cumulative-E&S risks and impacts, including those
specifically identified in ESS2–ESS10 throughout the project life cycle.

GN24.1. E&S assessment will involve field studies and the collection of baseline data and other
information to establish existing physical, biological, socioeconomic, and cultural conditions, as
well as desk research. Baseline data collection will be designed so that the dataset is robust and
sufficiently detailed to support significant results in impact assessment analyses and to facilitate
accurate and reliable monitoring of subsequent risks and impacts. The E&S assessment will
clearly identify and document any limitations on the extent and quality of available data, key data
gaps and timelines necessary to fill data gaps, and any assumptions used in data analysis.

GN24.2. The baseline socioeconomic data used in the E&S assessment should be accurate and
up to date. Historical data gaps on disadvantaged or vulnerable stakeholders in the area to be
affected by a project, any in-migration of people in anticipation of the project, and prevailing health
and labor conditions are among the contextual factors that may be recognized, assessed through
surveys, and addressed. If these factors are not considered, the measures intended to mitigate
E&S risks and impacts may not be effective. Socioeconomic studies that are part of the E&S
assessment will establish the characteristics and dynamics of the project area and the pre-project
conditions of the people who will be affected by the project. These studies will identify events,
including potential for conflict, that could affect project implementation.

GN24.3. The E&S assessment will also define the project’s geographical area and describe the
physical conditions, including biological and climate conditions. It will identify current and
proposed development activities within that area to assess potential cumulative impacts. It will
also document any reasonably foreseeable changes, such as projected variability in climatic and
environmental conditions, that would require adaptive management during the project cycle.
A borrower/client may be required to conduct a cumulative impact assessment as part of the
overall assessment process when (i) past, present, and/or reasonably foreseeable activities have
been carried out, are being conducted, and/or planned for the same geographic area as a
proposed project; and/or (ii) a project involves multiple components with specifically identified
physical elements, aspects, and facilities that are likely to generate cumulative impacts.

25. The borrower/client, in consultation with ADB, will identify and use one or a combination
of E&S assessment methods and tools, including scoping, E&S analyses, investigations,
audits, surveys, and studies, to assess the potential E&S risks and impacts of a project and
determine measures to mitigate those risks and impacts in accordance with the ESSs. The
assessment methods and tools will depend on the nature and scale of the identified E&S risks
and impacts and the applicable ESSs. The borrower/client will integrate and consolidate the
findings of all assessments and associated mitigation measures and actions in a timely
manner. This may result in a series of separate stand-alone or combined E&S assessment
and management document(s). These E&S9assessment and management documents are
listed and briefly described in the Annex of ESS1 along with their indicative outlines.
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 risks and impacts and the applicable ESSs. The borrower/client will integrate and consolidate
the findings of all assessments and associated mitigation measures and actions in a timely
manner. This may result in a series of separate stand-alone or combined E&S assessment
and management document(s). These E&S assessment and management documents are
listed and briefly described in the Annex of ESS1 along with their indicative outlines.

26. The borrower/client will ensure that the E&S assessment will take into account all
relevant E&S risks and impacts of a project as described in detail in ESS2–ESS10, including:

(i) environmental risks and impacts, such as pollution to air, water, and soil;
health, safety, and security risks of project workers and communities; threats to
the protection, conservation, and maintenance of natural and critical habitats
and biodiversity, ecosystem services, living natural resources and the
maintenance of environmental flows; risks to cultural heritage; and climate
change mitigation and adaptation; and
(ii) social risks and impacts, such as any impacts from land acquisition and land
use restriction; adverse impacts on communities of Indigenous Peoples; risks
associated with labor, working conditions, and rights of project workers; risks
where project impacts fall disproportionately on the disadvantaged or
vulnerable; and gender issues and other gender-related risks, including potential
risks of sexual exploitation, abuse, and harassment (SEAH), and digital risks.

GN26.1. An integrated E&S assessment identifies project activities that may result in E&S risks
and analyzes how a project’s potential environmental impacts associated with those risks may
affect social dynamics and vice versa, considering the combined effects on project-affected
persons and other stakeholders. The E&S assessment process covers all project activities and
all ESSs that apply to a project, and designs mitigation and management measures that enable
targeting the E&S risks and impacts together. This approach will:

(i) avoid overlooking critical interdependencies between environmental and social aspects;
(ii) save time and resources that might otherwise be spent conducting separate
assessments while ensuring cohesiveness and alignment;
(iii) help to identify cumulative and overlapping risks which improve the design of
mitigation strategies to minimize or eliminate adverse impacts on the environment
and persons; and
(iv) enable the evaluation of trade-offs and prioritization of actions, especially valuable
for managing complex projects with wide-reaching impacts.

Active stakeholder engagement, as set out in ESS10, is key to integrated E&S assessment.

GN26.2. The E&S risks and impacts may vary at different stages of a project, depending on the
activities being conducted. The E&S assessment will specify the mitigation and management
measures to be applied during different phases of project implementation, in accordance with the
mitigation hierarchy (refer to para. 27 and related guidance). The E&S assessment will identify
responsibilities for implementing the proposed mitigation and management measures and identify
any capacity or other concerns that need to be addressed to facilitate implementation. The E&S
assessment process may also identify E&S risks and impacts that are not specifically covered in
ESS1−ESS10, such as those associated with contextual risks and impacts in accordance with
the mitigation hierarchy and the objectives of ESS1.

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 27. The borrower/client will ensure that the E&S assessment applies the mitigation
hierarchy to (i) anticipate and, as a first priority, avoid E&S risks and impacts; (ii) where
avoidance is not possible, minimize or reduce E&S risks and impacts to acceptable levels; and
(iii) once E&S risks and impacts have been minimized or reduced, mitigate, restore, and/or
compensate for adverse impacts on the environment and project-affected persons. The
borrower/client will ensure that the costs of addressing the E&S risks and impacts through the
mitigation hierarchy are included as part of a project’s costs.

GN27.1. The E&S assessment process will apply the mitigation hierarchy in the following
sequence: The first step in the mitigation hierarchy is to anticipate and avoid. The E&S
assessment will identify potential E&S risks and impacts and evaluate technically and financially
feasible alternatives. The alternatives assessment will enable a borrower/client to make decisions
on project design that could potentially avoid adverse E&S risks and impacts (GN33.1).

GN27.2. The second step in the mitigation hierarchy is to minimize. Where avoidance is not
possible, the E&S assessment will identify specific actions to minimize or reduce E&S risks and
impacts that are likely to arise throughout the project cycle. This could include reducing the
physical footprint of a project; selecting infrastructure, equipment, and/or technology options that
support conservation; efficiently using resources, including energy, water, raw materials, and soil;
and reducing the generation of waste.

GN27.3. The third step in the mitigation hierarchy is to mitigate, restore, and/or compensate.
When ADB and a borrower/client determine that a project will involve E&S risks and impacts that
cannot be avoided or minimized, the E&S assessment will specify mitigation measures for the
project to meet the requirements of all applicable ESSs and comply with the host country’s
applicable laws. Mitigation involves implementing measures to manage the impacts that could not
be avoided during the initial phases of project planning. These mitigation measures may be
incorporated into the E&S assessment and management documents. When impacts have already
occurred, restoration aims to bring affected ecosystems or communities back to their original
state—or as close to it as possible—such as when a project involves existing facilities or
restoration of livelihoods. Any compensation under ESS5 falls within this step.

GN27.4. When mitigation and restoration are not fully achievable to manage significant residual
E&S risks and impacts, ADB may agree that a borrower/client will design and implement
measures that compensate for and/or offset them where technically and financially feasible. Such
measures do not necessarily eliminate residual E&S risks and impacts, but compensate for and/or
offset them with counterbalancing initiatives (refer to GN28.1−GN28.3 for further guidance on
compensation and offsets).

GN27.5. The borrower/client will begin applying the mitigation hierarchy early in the project cycle
by including qualified E&S specialists in the concept design and project preparation teamsand
consulting with ADB. The borrower/client will consider lessons learned from previous
assessments on similar projects and the success or failure of the mitigation measures applied, as
well as meaningful consultations with local communities to understand the context in which the
mitigation hierarchy will be applied.

GN27.6. The borrower/client may need to allocate funds for the following activities to conduct the
E&S assessment and management of risks and impacts aligned with the mitigation hierarchy:
(i) site surveys; (ii) baseline field data collection on environmental parameters and social indicators;

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(iii) data analysis; (iv) risk and impact prediction modeling; (v) monitoring equipment; (vi) software;
(vii) technical expertise; (viii) ongoing consultations with project-affected persons and other
stakeholders; (ix) translation services; (x) operation of grievance mechanisms; (xi) reporting to
stakeholders; and (xii) costs of compensation and/or offsets, among other associated costs.

28. Where significant residual impacts remain, the borrower/client will compensate for or
offset them, where technically and financially feasible. Where this is not technically and
financially feasible, the borrower/client will set out the rationale and justification for this
determination in the E&S assessment.

GN28.1. As specified in ESS3 and ESS6 and their respective guidance notes, a borrower/client
may consider emissions offsets and biodiversity offsets only as a last resort, where any significant
residual impacts remain despite best efforts to avoid or minimize adverse impacts.

GN28.2. The E&S assessment will consider the significance of residual impacts and their long-
term effect on the environment and project-affected persons. When a borrower/client determines
that it is not technically and/or financially feasible to compensate for or offset residual impacts,
the E&S assessment will set out the rationale for this determination, including why those impacts
could not be avoided by alternative project design and/or adaptive project management, and
options that were considered.

29. The borrower/client will ensure that the E&S assessment is an adequate, accurate, and
objective evaluation of the E&S risks and impacts of a project, prepared by qualified and
experienced specialists. The borrower/client will hire an external specialist if ADB has
determined that the potential significance of E&S risks and impacts requires the
assistance of such a specialist. If a third-party specialist is engaged by ADB, the
borrower/client will cooperate and provide access to the project site and necessary
information.

GN29.1. ADB may require the engagement of external specialists to bring additional expertise to
the E&S assessment process, especially when the internal capabilities of the borrower/client may
not be sufficient to address the complexity or magnitude of the risks, such as when high risks are
associated with ESS2−ESS9. If it is not possible to engage national experts with the specific
background and experience required—especially to apply GIP to certain projects—the
borrower/client will engage qualified international consultants.

30. The borrower/client will engage internationally recognized experts for High Risk and
Substantial Risk projects that are also contentious, involve serious and multidimensional
issues, and generally have interrelated potential E&S risks and impacts. These experts may
be engaged individually or as an advisory panel, in consultation with ADB, to carry out the E&S
assessment, and assess and/or monitor the implementation of the measures identified through
the E&S assessment process.

GN30.1. The subset of High Risk and Substantial Risk projects that are also contentious, involve
serious and multidimensional issues, and generally have interrelated potential E&S risks and
impacts, such as the construction of a significant sized dam, will require the engagement of
internationally recognized experts. Such international experts can be sourced locally, if they have
the expertise and qualifications required for the assignment. The experts—globally recognized for

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their qualifications and experience—play a critical role in supporting the E&S assessment process
for complex and sensitive projects. Depending on the nature and complexity of the E&S risks and
impacts of the project, the borrower/client may hire these experts individually or as part of a firm,
or assemble an advisory panel comprising multiple specialists.

31. The borrower/client will undertake the E&S assessment based on current information,
including an accurate description of the scope of a project, its components and associated
facilities, and E&S baseline data at an appropriate level of detail sufficient to inform
characterization and identification of E&S risks and impacts and mitigation, management,
and monitoring measures.

GN31.1. Using current data for the E&S assessment ensures the evaluation reflects the actual
conditions and context of the project at the time of assessment. This includes outlining its main
components and associated facilities supporting the project, if any. Outdated or incomplete
information might lead to an inaccurate understanding of risks and impacts, potentially
undermining the effectiveness of mitigation and management measures. Baseline data refers to
information about the existing E&S conditions in the project area before the project begins.
Collecting this data at an appropriate level of detail is essential to characterize the existing
conditions and assess how they may be altered by the project (GN24.2).

32. The borrower/client will seek opportunities to enhance the positive impacts of a project,
subject to the requirements of the ESSs. The E&S assessment will identify the potential
gender- based E&S risks and impacts of a project, and will develop measures to prevent and
mitigate such risks and impacts throughout the project cycle. The assessment will consider
intersectionality to address how gender inequalities intersect with other forms of disadvantages
and discrimination that create barriers for accessing project benefits and limit their ability to
respond to adverse impacts of a project. The borrower/client will promote gender-responsive
stakeholder engagement process, information disclosure, and grievance mechanisms with
consideration for the disadvantaged or vulnerable in accordance with ESS10. The
borrower/client will also assess gender-related health and safety risks and SEAH risks to
project workers and project-affected persons to prevent and mitigate such risks in
accordance with ESS2 and ESS4.

GN32.1. Intersectionality is the interaction and cumulative effects of multiple forms of

discrimination or disadvantages based on certain factors such as race, ethnicity, disability,
socioeconomic status, or age. The E&S assessment takes these intersecting factors into account
to address multiple layers of discrimination. This way, vulnerable groups are not exposed to
disproportionate risks from the project while also being able to benefit from its opportunities.
Stakeholder engagement will be made gender-responsive by actively including all gender groups
and ensuring their voices are heard. It will also consider the needs of disadvantaged or vulnerable
groups, ensuring they have access to information and project benefits. The borrower/client will
assess risks to health and safety specific to the disadvantaged or vulnerable. Special attention
will also need to be given to the risks of SEAH, which can occur among project workers as well
as affected communities. Measures to prevent and mitigate these risks may include codes of
conduct, awareness training, and reporting mechanisms in line with ESS2 (related to labor and
working conditions) and ESS4 (related to community health and safety).

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 33. The borrower/client will ensure that the E&S assessment includes an alternatives
assessment. Such an assessment will consider, in relation to the relevant ESSs, feasible
alternatives to the proposed project including the “without project” scenario, as well as feasible
alternatives to the project design, such as the project location, technology, and other relevant
features that can avoid, as a first priority, and/or mitigate the relevant E&S risks and impacts.
For each of the alternatives, the E&S risks and impacts are quantified to the extent possible.

GN33.1. In relation to the relevant ESSs, an alternatives assessment considers feasible

alternatives to the proposed project, including the “without project” scenario and feasible
alternatives to the project design, such as (i) whether the project could be implemented at an
alternative site that minimizes E&S risks and impacts, such as avoiding ecologically sensitive
areas or residential zones; (ii) exploring alternative technologies that might be more energy-
efficient, environmentally friendly, or safer for the local population; and (iii) other relevant features
such as changes to the project's scale, timing, or operational processes to avoid, minimize or
mitigate risks and impacts. For each alternative considered, the E&S assessment will quantify the
associated risks and impacts to the extent possible.

GN33.2. The "without project" scenario examines a scenario where the project is not implemented
at all. By considering this option as part of the E&S assessment, stakeholders can weigh the costs
and benefits of proceeding in comparison to not proceeding with the project. It can reveal whether
the project is essential or whether alternative strategies might be more suitable.

GN33.3. If a borrower/client proposes to adopt an option for project siting, design, and/or
technology identified through the alternatives assessment that would have greater potential E&S
risks and impacts than other technically and/or financially feasible options, the borrower/client will
document the rationale for selecting that option, including but not limited to an economic
cost−benefit analysis, multi-criteria analysis, and performance matrices.

34. Where a project involves significant use of digital technology and/or information
technologies, the E&S assessment will consider digital risks resulting from usage of such
technologies. In the absence of a host country’s applicable laws on digital risks, evolving
good practices will be applied as appropriate to develop appropriate measures to manage such
risks and impacts.

GN34.1. A significant use of digital technology and/or information technologies may refer to a
project that advances digital transformation, or a process of using digital technologies to
fundamentally change how a government, organization, or project operates. It is important to
consider that a continually evolving digital technology space means the associated risks and
impacts are frequently changing or shifting. Known environmental and social risks and impacts
include (i) energy and water consumption; (ii) the “digital divide” or unequal access to technology
and the internet across disadvantaged or vulnerable groups; (iii) misinformation and
disinformation; (iv) privacy concerns, including cybersecurity breaches to digital systems; and
(v) the unauthorized collection and misuse of personal data.

GN34.2 The assessment and management of digital risks and impacts will be required when a
project has the potential to significantly affect cybersecurity, data privacy, and/or data
management. Where the host country’s applicable laws on digital risks exist, digital risks will be
managed based on such requirements. Where such requirements are not established or are

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considered inadequate, the borrower/client will engage experts to identify and agree, in
consultation with ADB, on appropriate management actions, aligned with good practices, where
technically and financially feasible.

GN34.3. Cybersecurity is a set of measures to protect digital infrastructure, digital devices, and
data from cyberattacks. Common threats include malware, phishing, ransomware, and insider
threats, all of which can compromise sensitive information, disrupt operations, and erode trust.
Effective cybersecurity means having adequate policies and strategies for operations, including
procurement, supply chains, and contracting agreements.

GN34.4. Data privacy acts to protect personal data from theft and misuse in the digital
environment. Developing and establishing policies, procedures, and technical measures to
manage personal data is critical to adequately protect it. Installing countermeasures, robust
monitoring and response mechanisms, and sufficient capacity are examples of ways to manage
breaches of data privacy and unauthorized or inadvertent collection of personally identifiable
information or other sensitive data.

GN34.5. Data management refers to how data is collected, stored, processed, analyzed,
shared, reused, and/or disposed of. Lack of robust data management poses significant risks,
potentially leading to financial losses, reputational damage, legal consequences, and a loss of
public trust.

35. The borrower/client will undertake stakeholder engagement as an integral part of the
E&S assessment in accordance with ESS10 to ensure that the E&S assessment and the
stakeholder engagement processes are designed to meet the requirements of the relevant
ESSs, and the findings and the mitigation measures based on the mitigation hierarchy are
incorporated into project selection, siting, and design decisions. The borrower/client will ensure
that stakeholder engagement is inclusive and does not discriminate against project-affected
persons, including those deemed disadvantaged or vulnerable.

36. The E&S assessment will consider potentially significant project-related transboundary
and global risks and impacts, such as impacts from effluents and emissions, increased use or
contamination of international waterways, emissions of short- and long-lived climate pollutants,
climate change mitigation, adaptation and resilience issues, and impacts on threatened or
depleted migratory species and their habitats. The E&S assessment will also consider risks
and impacts associated with the primary suppliers as required by ESS2 and ESS6.

GN36.1. Transboundary impacts are those that extend beyond the borders of the country in which
the project is located but are not necessarily global in nature. Examples include air or water
pollution extending to the airshed or watershed of neighboring or surrounding countries and the
pollution of transboundary or international waterways.

GN36.2. Refer to ESS2 and ESS6 and their guidance notes to address primary suppliers in the
specific contexts of labor and biodiversity conservation.

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 37. The borrower/client will ensure that the E&S assessment takes into account the host
country’s applicable legal, governance, and institutional framework; the host country’s
applicable laws; institutional capabilities for implementation relating to E&S issues; project
context; and the host country’s environmental or social status reports and/or national
environmental or social action plans, where these exist. The borrower/client will ensure that the
E&S assessment is undertaken in coordination with the economic, financial, institutional, and
technical analysis of a project.

38. Where the E&S assessment identifies potential losses of income or livelihood from
project-related environmental impacts that are not a direct result of project activities under land
acquisition and land use restriction, the borrower/client, in consultation with ADB, will
provide appropriate livelihood restoration measures and, in this respect, may consider applying
the principles set out in ESS5.

GN38.1. This provision addresses any negative impacts on income or livelihoods caused by
project-related environmental changes, even when these impacts are not directly tied to land
acquisition or restrictions on land use. In such cases, the borrower/client will consult with ADB to
develop livelihood restoration measures based on the principles of ESS5, such as providing
alternative income opportunities, job training, or community development initiatives, designed to
recover or improve the income-earning capacity and overall well-being of the affected individuals
or communities.

39. Where the borrower/client approaches ADB to provide financing for a project that is
under construction, or where a project has already received national permits, licenses, or other
forms of clearance for construction or operations, including the approval of local E&S impact
assessments, or otherwise completed or partially completed E&S assessments prior to ADB’s
involvement in a project, the borrower/client will conduct an audit to determine whether the
completed assessment meets the requirements of the ESSs. Based on the findings of the audit,
the borrower/client may be required to undertake additional assessments and the associated
consultations and disclosures.

40. The borrower/client will ensure that the E&S assessment includes a review of the
institutional capacity of the agency responsible for implementing a project’s E&S assessment
and management documents and ESCP/ESAP. Where necessary to ensure the capacity is
in place, the borrower/client will include components or activities in a project to strengthen its
technical capacity to carry out the E&S assessment and management. The borrower/client will
ensure that E&S responsibilities are well-defined with clear lines of responsibility and authority
and communicated to all personnel involved. Where a project includes one or more elements
of capacity strengthening, these elements will be subject to monitoring and evaluation.

E. Environmental and Social Commitment Plan and Environmental and Social

Action Plan

41. The borrower/client will agree with ADB on an adaptive management process in which
measures and actions necessary to meet the requirements of the ESSs will be identified and
implemented over a specified time frame through an ESCP/ESAP. The ESCP/ESAP may
allow certain components of the E&S assessment for a project to be carried out during project
implementation. However, ADB will only allow such deferral to be included in the ESCP/ESAP
if the level of E&S risks and impacts of the activity to be assessed during project
implementation is not likely to change the E&S 16 conclusions for the project and does not
compromise the overall E&S readiness of a project. To determine the appropriate manner and
acceptable time frame for the borrower/client to implement the measures to comply with the
ESSs, thePUBLIC.
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 implementation. However, ADB will only allow such deferral to be included in the ESCP/ESAP
if the level of E&S risks and impacts of the activity to be assessed during project
implementation is not likely to change the E&S conclusions for the project and does not
compromise the overall E&S readiness of a project. To determine the appropriate manner and
acceptable time frame for the borrower/client to implement the measures to comply with the
ESSs, the borrower/client will consider the nature and scale of the potential E&S risks and
impacts of a project based on the findings of the E&S assessment and stakeholder
engagement; the timing for the development and implementation of a project; the capacity of
the borrower/client and other entities, if any, involved in the development and implementation
of a project as assessed by ADB; and the timing of specific measures and actions to be put in
place or taken by the borrower/client to address such risks and impacts.

GN41.1. ADB will only allow the deferral of the E&S assessment to be included in an ESCP/ESAP
if the level of E&S risks and impacts of the activity is unlikely to change the E&S conclusions for
the project and does not compromise the project’s overall E&S readiness. To make this
determination, the borrower/client will consider and agree with ADB on several factors, including:
(i) the overall risks and impacts of a project; (ii) the status of project preparation and design;
(iii) the adequacy and progress on stakeholder engagement based on the E&S risks and impact
and project design; (iv) the adequacy of information, and if there are information gaps, the
materiality of such gaps for decision-making; (v) the level of sufficiency of E&S assessments to
make informed budget allocation and procurement planning; and (vi) borrower’s/client’s capacity,
including staffing and resource availability, to complete the proposed deferred work during
implementation. In addition to these factors, consider E&S readiness (GN13.1), including any
specific country-readiness parameters, as applicable for sovereign operations.

GN41.2. Throughout the project cycle, new information may become available, changes may
occur related to E&S risks and impacts, unforeseen risks and impacts may be discovered during
implementation, mitigation measures may not work as planned, and other unforeseen
implementation challenges may arise. An adaptive management approach includes processes
for monitoring E&S management and mitigation measures and comparing the results to expected
outcomes, to detect and learn from changes, and to make decisions to realign project
implementation measures to meet the objectives of the ESSs. Adaptive management processes
are flexible and iterative, supporting systematic monitoring and modification.

42. The ESCP will include those mitigation and performance improvement measures and
actions that are (i) forward looking measures set out in the E&S assessment and
management documents; and/or (ii) future actions to be undertaken during project
implementation in accordance with the guidance provided in the E&S assessment and
management documents. The ESAP will include those mitigation and performance
improvement measures and actions that are required to bring a project into compliance with
the relevant ESSs, such as supplementing the existing E&S systems.

43. Where necessary as determined by ADB, the borrower/client will include in the
ESCP/ESAP a description of trainings to address the specific measures and actions required
to support effective and continuous E&S performance. The ESCP/ESAP will also include the
details of the human and financial resources associated with such trainings. When a project
uses the borrower’s E&S systems or common approach, the measure and actions and the
specific E&S arrangements will be set out in the ESCP/ESAP.

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 44. The borrower/client will specify a completion date for each action in the ESCP/ESAP.
The borrower/client will implement the measures and actions identified in the ESCP/ESAP in
accordance with the specified time frame and will review the status of the implementation of
the ESCP/ESAP as part of its monitoring and reporting.

GN44.1. It is particularly important for a borrower/client to adhere to the agreed completion date
for each action set out in the ESCP/ESAP, or to seek to update the timelines in consultation with
ADB for those activities and actions that may be delayed due to unexpected circumstances,
thereby remaining in compliance (para. 46).

45. The ESCP/ESAP will also include the details of the human and financial resources
associated with implementation and monitoring of any measures and actions set out in the
ESCP/ESAP. The borrower/client will ensure sufficient high-level commitment to provide
human and financial resources on an ongoing basis to implement the ESCP/ESAP as well as
for the monitoring and reporting on the ESCP/ESAP requirements. The legal agreement for a
project will include obligations of the borrower/client to implement the ESCP/ESAP.

46. Where the borrower/client is required under the ESCP/ESAP to take specific measures
and actions during project implementation, the borrower/client will not carry out any activities
in relation to the project that may cause material adverse E&S risks and impacts until the
relevant measures and actions have been completed in accordance with the ESCP/ESAP,
including satisfying applicable requirements on consultation and disclosure.

47. If there are changes to a project that result in additional E&S risks and impacts,
particularly where these will impact project-affected persons, the borrower/client will provide
information on such risks and impacts, and will undertake meaningful consultation with
project-affected persons in accordance with ESS10. The borrower/client will update the
ESCP/ESAP, as necessary, in consultation with ADB, setting out any additional measures and
actions to be implemented by the borrower/client.

GN47.1. A borrower/client will notify ADB promptly of any proposed changes to the scope, design,
implementation, or operation of a project that are likely to cause additional E&S risks and impacts.
The borrower/client will carry out appropriate additional assessments and meaningful consultation
with stakeholders in accordance with the applicable ESSs and propose changes to the
ESCP/ESAP measures and actions.

F. Environmental and Social Assessments in Fragile and Conflict-Affected Situations

48. For projects in fragile and conflict-affected situations where there are constraints to the
availability of information and data required to prepare E&S assessment and management
documents, the borrower/client will address the key risks and impacts and propose
management measures, to the extent possible. In cases where it is not possible to complete the
E&S assessment process before ADB’s approval of such projects, the borrower/client will agree
with ADB to adopt a framework approach, and an environmental and social management
framework (ESMF) will be prepared with specific measures and actions to be taken during project
implementation included in the ESCP/ESAP. In order to address the E&S risks and impacts
of a project, the borrower/client will still undertake the assessment and management of the E&S

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 risks and impacts in accordance with the requirements set out in the ESMF, ESS1, and other
relevant ESSs before undertaking any activities for a project that may cause material adverse
E&S risks and impacts. The borrower/client will submit to ADB for review and disclosure all E&S
assessment and management documents, as well as monitoring reports prepared in accordance
with the relevant ESSs and ESMF documenting the E&S performance of the project.

G. Monitoring, Adaptive Management, and Reporting

49. The monitoring process will record information, track performance, and establish
relevant operational controls to verify compliance and progress with the environmental and
social management plan or other E&S assessment and management documents, the
ESCP/ESAP, and a project’s legal agreements. The borrower/client will ensure that the E&S
assessment and management documents developed take a long-term and phased approach
to accommodate the dynamic nature of the concept design, preparation, and implementation
phases of a project cycle and are responsive to changes in project circumstances, unforeseen
events, regulatory changes, and the results of monitoring and review. The borrower/client will
agree with ADB on the extent and methods of monitoring to be set out in the ESCP/ESAP and,
where required, will make adjustments based on project performance experience or any actions
requested by the regulatory authorities of a host country.

GN49.1. Monitoring is an essential adaptive management process (GN41.2 and para. 42) as
well as the primary method for assessing progress, compliance, and implementation challenges.
Monitoring tracks the performance of the mitigation measures identified through the E&S
assessment process to determine compliance with the ESSs and whether additional measures
need to be implemented. Indicators for monitoring are based on a project’s E&S baseline data
and identified monitoring protocols as part of the E&S assessment. A project’s environment and
social management plan or sub-activity and/or site level environment and social management
plans will include a monitoring plan(s) that describes the specific indicators that must be
monitored and the frequency at which monitoring must be conducted. The ESCP/ESAP will
specify the monitoring systems and human and financial resources required to monitor project
indicators effectively.

50. For High Risk and Substantial Risk projects, and/or where appropriate and as required
under the ESSs, the borrower/client will engage third-parties, such as external monitors, local
communities, or civil society organizations, to complement and/or verify its own project
monitoring information, as agreed to in the ESCP/ESAP. Where third-parties are responsible
for managing specific E&S risks and impacts and associated mitigation measures, the
borrower/client will collaborate with such third-parties to establish and monitor such mitigation
measures and ensure satisfactory implementation. Where appropriate, the borrower/client
may involve representatives of project-affected persons and other stakeholders to
participate in project monitoring activities, including by providing inputs to define appropriate
indicators.

GN50.1. ADB and a borrower/client will agree on the engagement of an external party for
monitoring the implementation of the E&S mitigation measures. Key triggers to determine the
use of external parties to monitor include: (i) complexity and magnitude of risks such as projects
with multiple high-risk ESS areas, large-scale projects with cumulative or transboundary impacts
that exceed borrower/client capacity and/or projects involving critical habitats, cultural heritage,
or sensitive ecosystems where independent verification is essential; (ii) borrower/client capacity

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limitations such as lack of specialized expertise within the project management team, weak or
underdeveloped E&S management systems and/or limited track record in managing complex or
high-risk projects; (iii) stakeholder sensitivity and trust such as projects with significant
community opposition or concerns; situations where project affected persons or civil society
demand independent oversight to ensure transparency, and/or projects involving indigenous
peoples or vulnerable groups; (iv) where impartial monitoring builds credibility; (v) regulatory and
institutional gaps in national regulatory frameworks or limited enforcement capacity; (vi) absence
of reliable national experts to apply GIP and/or the need for international standards verification
in contexts where local monitoring may be insufficient; and (vii) high-risk project characteristics
such as large-scale resettlement or livelihood restoration programs, complex supply chains with
risks of child labor, forced labor, or unsafe working conditions, major infrastructure projects (e.g.,
dams, highways, energy plants) with wide-ranging E&S impacts, and/or political or reputational
risk where independent monitoring protects both borrower/client and ADB credibility.

51. The borrower/client will submit to ADB for disclosure monitoring reports documenting
the E&S performance of a project as required in the ESCP/ESAP. Monitoring reports will be
submitted to ADB at least semiannually for projects deemed to have High Risk and Substantial
Risk, and at least annually for projects deemed to have Moderate Risk and Low Risk, or as
otherwise stated in the ESCP/ESAP. The borrower/client will ensure that these reports provide
an accurate and objective record of project implementation, including compliance with the
relevant E&S assessment and management documents. These reports will also include
information on stakeholder engagement conducted during project implementation in
accordance with ESS10.

GN51.1. ADB and a borrower/client will agree on the format, content, and frequency of
monitoring and reporting, which will vary depending on the nature and scale of the E&S risks
and impacts and mitigation measures. ADB and the borrower/client will disclose these reports.

52. Based on the results of the monitoring, the borrower/client will identify any necessary
preventive and corrective actions to ensure compliance with the ESSs, and will update the
ESCP/ESAP or the relevant E&S assessment and management documents, in a manner
acceptable to ADB. The borrower/client will implement the agreed preventive and corrective
actions in accordance with the updated ESCP/ESAP, E&S assessment and management
documents, and/or the monitoring report on these actions. The borrower/client will facilitate
site visits by ADB staff or consultants acting on ADB’s behalf.

53. The borrower/client will notify ADB promptly of any incident or accident relating to a
project which has, or is likely to have, a significant adverse effect on the environment, project-
affected persons, project workers, or the public. The borrower/client will include in the
notification sufficient detail describing such an incident or accident and its consequences,
including any fatalities or serious injuries. The borrower/client will take immediate measures to
satisfactorily address the incident or accident and to prevent any recurrence, including in
accordance with the host country’s applicable laws, including those laws implementing the
host country’s obligations under international instruments, and the applicable ESSs. For
any injury, ill-health, or fatalities caused by project activities, the borrower/client will provide
appropriate compensation as set out in ESS4.

GN53.1. Refer to ESS4 and its guidance note.

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H. Stakeholder Engagement and Information Disclosure

54. As described in ESS10, the borrower/client will continue to engage with and provide
sufficient information to stakeholders throughout the concept design, preparation, and
implementation phases of a project cycle in a manner appropriate to the nature of their
interests and the potential E&S risks and impacts of a project.

GN54.1. A project activity may result in diverse impacts on different stakeholder groups at
different phases of a project, requiring multiple measures customized to the needs of each group.
Refer to ESS10 and its guidance note for guidance on stakeholder engagement.

55. The borrower/client will submit to ADB for disclosure all E&S assessment and
management documents and the ESCP/ESAP for a project prior to project appraisal or final
credit approval.

GN55.1. All disclosure requirements are subject to ADB’s Access to Information Policy. 2
Documents and information related to projects classified as High Risk, Substantial Risk, and
Moderate Risk will be submitted to ADB for disclosure as early as possible, and in all cases,
before project appraisal or final credit approval. Refer to ESS10 and its guidance note for
requirements and guidance on disclosure.

56. The borrower/client will also submit to ADB for disclosure all future E&S assessment
and management documents that are prepared as required, and according to the time frame
specified in the ESCP/ESAP after project appraisal or final credit approval.

57. The borrower/client will submit to ADB for disclosure monitoring reports, and, as
necessary, corrective action plans documenting the E&S performance of a project as stated in
the ESCP/ESAP.

I. Use of Borrower’s Environmental and Social Systems

58. ADB may support the use of the borrower’s E&S systems in the assessment,
development, and implementation of a project, provided this is likely to address the E&S risks
and impacts of the project to achieve E&S outcomes through meeting the objectives materially
consistent with the ESSs. The borrower’s E&S systems will include those aspects of the host
country’s policy, legal, governance, and institutional framework, including its national,
subnational, or sectoral implementing institutions and the host country’s applicable laws,
and implementation capacity which are relevant to the E&S risks and impacts of a project.
Where there are inconsistencies or a lack of clarity within the borrower’s E&S systems as to
competent government authorities or their jurisdiction, these will be identified and discussed
with the borrower. The aspects of the borrower’s existing E&S systems that are relevant will
vary from project to project, depending on such factors as the type, scale, location, and
potential E&S risks and impacts of a project, and the role and authority of different institutions.

2 ADB. 2018. Access to Information Policy.

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PUBLIC. This information is being disclosed to the public in accordance with ADB’s Access to Information Policy.
GN58.1. Use of a borrower’s E&S system aims to strengthen the borrower’s approach to
managing environmental and social risks and impacts. Where environmental and social risks and
impacts are assessed and managed through national processes and requirements, ownership
and capacity are enhanced; institutions are built over the long term; upward harmonization of
laws, policies, and standards is encouraged; and opportunities for collaboration and learning are
provided. The use of a borrower’s E&S system also helps avoid duplication of borrower and ESF
requirements. At the request of a borrower, ADB will pursue opportunities to engage in upstream
discussions with them to consider undertaking assessments to determine the necessary actions
for the potential use of the borrower’s E&S systems.

GN58.2. ADB’s assessment will cover factors including, but not limited to:

(i) the host country’s policy, legal, and institutional framework that applies to the specific
E&S risks and impacts of a project;
(ii) national, regional, and local regulations, rules, and procedures, including permitting
and approval requirements, applicable to a project;
(iii) inconsistencies, lack of clarity, or conflict as to competent authorities or jurisdictions,
including differences between national, regional, and local authorities or
jurisdictions;
(iv) the performance of the borrower in previous experience with ADB and/or other
multilateral or bilateral financing agencies and of national, subnational, sectoral, and
local institutions involved in the preparation and implementation of such previous
projects; and
(v) the technical, financial, and institutional capacity of the borrower and competent
national, subnational, or sectoral implementing institutions or agencies involved in
the preparation and/or implementation of a project.

GN58.3. ADB’s assessment will focus on the policy, legal, and institutional framework, and on
how the framework operates in practice. The assessment process may involve a detailed analysis
against the specific requirements of the applicable ESSs. It may also consider the findings of
similar analyses from previous projects to the extent that the basis for those findings has not been
subject to material changes.

59. Where the borrower and ADB propose to use all, or part, of the borrower’s E&S
systems, ADB, in consultation with the borrower, will undertake an assessment to determine
whether and to what extent the borrower’s E&S systems as described in para. 58 can be used
to address the E&S risks and impacts of the project to achieve the E&S outcomes
through meeting the objectives materially consistent with the ESSs. The borrower/client will
provide information reasonably requested by ADB in connection with this assessment. A final
decision on the use of all, or part, of the borrower’s E&S systems for a project will be made by
ADB’s Board of Directors.

GN59.1. ADB and a borrower may agree to apply the borrower’s E&S systems for one or more
ESSs when an assessment demonstrates material consistency with each applicable ESS.
A borrower’s E&S system may be applied at the project level, subject to the approval of ADB’s
Board of Directors. ADB will continue to monitor and supervise projects that apply a borrower’s
E&S system. ADB’s Accountability Mechanism Policy will continue to apply to the project.3

3 ADB. 2012. Accountability Mechanism Policy.

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 60. Where ADB’s assessment identifies gaps in the borrower’s E&S systems, the borrower
will work with ADB to identify and agree on measures and actions to address such gaps and
strengthen the borrower’s E&S systems, to the extent that such measures and actions are
necessary to meet the requirements of para. 58. Such measures and actions may be
implemented during project preparation or project implementation, as agreed with ADB, and
will include, where necessary, capacity development measures for any relevant national,
subnational, or sectoral implementing institution and any implementing agency. The agreed
measures and actions, together with the time frames for their completion, will form part of the
ESCP/ESAP. The ESCP/ESAP will also require that E&S performance will be measured
against the approved E&S systems.

61. Where the use of the borrower’s E&S systems is approved by ADB, the borrower will
take all actions necessary to maintain the E&S systems, as well as acceptable implementation
practices, track record, and capacity, in accordance with the measures and actions identified
in the ESCP/ESAP, throughout the implementation phase of a project cycle. The borrower
will notify and discuss with ADB any changes in the borrower’s E&S systems that may
materially and adversely affect a project for which the use of the borrower’s E&S system has
been approved. If the borrower’s E&S systems are changed in a manner inconsistent with the
requirement of para. 58 and the ESCP/ESAP, the borrower will carry out, as appropriate,
additional assessment and stakeholder engagement in accordance with the ESSs, and agree
with ADB on changes to the ESCP/ESAP. If, in the opinion of ADB, such changes serve to
further improve the borrower’s E&S systems, the borrower may apply such changes to a project,
after reflecting the new requirements in the ESCP/ESAP.

J. Environmental and Social Approach to Financing Modalities and Products

62. The approach to the assessment and management of E&S risks and impacts will differ
depending on the ADB financing modalities and products and the intended use of the proceeds.
The borrower/client will apply the relevant requirements of the ESSs to the financing modalities
and products, except to the extent such requirements are modified or explained in Part IV
(Financing Modalities Requirements).

63. For every High Risk project, including those prepared by the borrower/client after ADB’s
approval irrespective of the financing modalities or product, ADB will require the borrower/client
to submit for review the E&S assessment undertaken by the borrower/client.

GN63.1. For all High Risk projects, irrespective of when the E&S assessment is done, the
borrower/client will submit the E&S assessment to ADB for review and clearance.

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K. Management of Contractors

64. The borrower/client will require that all contractors and subcontractors engaged on a
project operate in a manner consistent with the requirements of the ESSs, including the specific
requirements set out in the ESCP/ESAP, such as preparation of additional plans or
assessments as required by the ESSs and as relevant to the financing modality or product.
The borrower/client will manage all contractors in an effective manner, including:

(i) Assessing the E&S risks and impacts associated with such contracts;
(ii) ascertaining that contractors engaged in connection with a project are legitimate
and reliable based on past performance, and have the necessary E&S knowledge
and skills needed to fulfill their contractual commitments with regard to managing
E&S risks and impacts;
(iii) incorporating all relevant aspects of the ESCP/ESAP into bidding documents,
including the environmental and social requirements in bidding documents and
civil works contracts, and contractually requiring contractors to apply the relevant
aspects of the ESCP/ESAP and the relevant E&S assessment and management
documents;
(iv) requiring contractors to implement any corrective action plans to bring a project
into compliance with the ESSs as and when needed;
(v) monitoring contractor compliance with their contractual commitments; and
(vi) in the case of subcontracting third parties, requiring contractors to have equivalent
arrangements with their subcontractors.

GN64.1. A borrower/client will ensure that, in accordance with item (iii) of para. 64, its contracts with
contractors include the requirement that subcontractors also must comply with the ESCP/ESAP and
all applicable E&S assessment and management documents. The borrower/client will include the
E&S requirements in the bidding documents and other agreements with the contractors. This
requires close coordination with the procurement process, particularly on the timing of the
assessment and preparation of the E&S assessment and management documents.

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About the Asian Development Bank

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Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB
harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure,
and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.

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