The 8 IFC environmental and social performance standards you need to know.
The International Finance Corporation (IFC) is the private sector arm of the World Bank Group, whose mission is to promote sustainable investment in the sector for developing countries, which in turn contributes to reducing poverty and boosting economic growth.
For this purpose, the IFC has developed a set of 8 performance standards on environmental and social sustainability. The IFC performance standards are designed to help companies manage the environmental and social risks associated with their projects, and to ensure that these risks are mitigated. ProducePay’s commitment to the IFC includes seeking to finance growers that are aligned to this set of standards.
In addition, companies that adopt these standards are eligible for IFC financing, including for the agribusiness sector.
ProducePay works closely with the IFC to promote these standards. Each of our growers must undergo thorough site visits and operational analysis to ensure alignment with IFC standards. Additionally, our business model of enabling direct trading by connecting growers to buyers, aligns with principles to reduce environmental impact. Through these approaches, ProducePay elevates environmental responsibility and social stewardship, working towards a sustainable produce industry that benefits all.
The 8 IFC Environmental and Social Performance Standards
The 8 performance standards provide guidance to companies on how to manage their environmental and social impacts. These standards are:
1) Assessment and Management of Environmental and Social Risks and Impacts
All companies face environmental and social risks that can affect their performance, so this standard helps companies identify, assess, and manage these risks in a way that protects both people and the environment. The standard includes requirements for conducting an Environmental and Social Risk Assessment, which must be updated periodically.
2) Labor and Working Conditions
Companies must ensure decent working conditions for their workers, including the guarantee that they receive a fair wage, access to adequate facilities and resources, and protection from health and safety risks. It also requires them to provide employees with training and development opportunities, as well as to take measures to prevent discrimination and harassment.
3) Resource Efficiency and Pollution Prevention
This standard demands companies take measures to prevent pollution and increase resource efficiency. They must assess their operations to identify opportunities for improvement, while developing and implementing an environmental and social management system which includes specific procedures to address pollution and resource efficiency.
4) Community Health, Safety, and Security
Promoting health, safety and community protection during project development and operation; requiring projects to develop and implement policies, procedures and programs to prevent or mitigate health, safety and community impacts. The goal is to protect people and communities from harm while promoting sustainable development.
5) Land Acquisition and Involuntary Resettlement
This standard requires projects to avoid or minimize adverse impacts on communities, including displacement and loss of livelihoods. If displaced people cannot return to their previous level of well-being, the project must provide adequate compensation and treat them fairly and respectfully.
6) Biodiversity Conservation and Sustainable Management of Living Natural Resources
The objective of this performance standard is to promote sustainable development and protect the environment, with the conservation and sustainable management of biodiversity being a key aspect, including the protection of endangered species, maintenance of ecosystem function, and a sustainable use of natural resources.
7) Indigenous Peoples
It requires companies to respect the rights of indigenous peoples when planning or carrying out business activities that may affect them, including making sure that communities are consulted at an early stage and in a culturally appropriate manner, that they have the opportunity to give their consent, freely, prior and informed, and that they are adequately compensated for any impacts.
8) Cultural Heritage
This standard requires projects to avoid significant adverse impacts on cultural heritage; it has recently been updated to include new guidance on how to assess and manage risks to intangible cultural heritage, such as traditional knowledge, customs, and beliefs.
How Important are the IFC Performance Standards for Produce Businesses?
The IFC environmental and social performance standards presented are voluntary but are widely recognized as the international benchmark for best practice in sustainable development.
As we have already seen, the standards cover a range of issues, such as land acquisition, water use, greenhouse gas emissions, worker safety and labor rights, all of which are highly relevant to the agricultural sector, and thus particularly important in this area.
As such, by adhering to these standards, agribusinesses can help protect the environment and improve the life of workers in their supply chains, which in turn can contribute to creating a more sustainable agribusiness that benefits all stakeholders.
How is ProducePay Supporting the Positive Impact of the IFC Performance Standards?
At ProducePay, we encourage produce players to meet the IFC standards in a variety of ways, both directly and indirectly.
Our Pre-Season financing serves as a catalyst for growth, enabling growers to invest in and expand their operations. During qualification, we certify our growers meet the IFC performance standards. Growers undergo a site visit conducted by ProducePay’s field experts, as well as an operational analysis to ensure no negative environmental impact with their operations. This process not only helps growers’ operations align with the IFC standards – it also resonates with ProducePay’s broader vision for responsible and sustainable growth.
Moreover, our enabling of direct trading drives efficiency and sustainability. By directly connecting growers to buyers, we aim to reduce the unnecessary changing of hands – which in the fresh produce industry occurs on average 4-8 times before produce hits shelves. Our direct trading model aligns with the theoretical principles that foster reduced environmental impact, helping create a more streamlined and conscientious produce landscape.
At ProducePay, we believe that the IFC performance standards are powerful and important. In every aspect of our business, we seek to elevate the principles of environmental responsibility and social stewardship, aiming to create a more sustainable produce industry that benefits all stakeholders.
Source: Performance Standards