Performance Standard 1 –
Assessment and Management of Social & Environmental
Risks and Impacts
Stakeholder Feedback
Frequently Asked Questions
Are the management system requirements in PS
1 practical for emerging market companies?
What is IFC’s role in ensuring, on an investment-
by-investment basis, that individual clients
comply with PS 1 management system
requirements?
Will IFC require verification by an independent
expert of client-provided information used to
assess implementation of Action Plans as a part
of client’s E&S Mgmt systems? If not, why not?
Does IFC require an independent 3rd party to
verify accuracy and quality of information
provided to stakeholders during consultation?
Will this be a future requirement in the revised
PSs?
How will IFC strengthen community grievance
mechanism requirements? Will the revised PS 1
help companies work with traditional systems in
establishing a community grievance mechanism,
rather than constructing new mechanisms to
address grievances?
Will the revised PS 1 include a specific
requirement for a public consultation meeting to
properly inform and get feedback from the public
before the project is developed?
IFC Response
The PS requirements focus on the key process elements that IFC
experience has shown are needed to manage environmental &
social (E&S) performance. IFC has hundreds of actual examples
where management system requirements are being successfully
applied across a range of investment types and structures,
including financial intermediaries.
Corrections of any deficiencies in management processes
uncovered during our initial due diligence are made conditions of
IFC investment in financing agreements. What is more, through
regular supervision over the life of the investment, we ensure
business processes, such as company procedures, organizational
capacity and ongoing monitoring, remain sufficiently robust.
IFC will agree with the client on a case-by-case basis when
external advice and/or third-party monitoring may be appropriate.
This will not be done for all projects, but for those projects with
potential high risk impact operating in sensitive settings or
contexts. As a general principle, the perceived objectivity of third
party advice must be weighed against the need for clients to
incorporate these issues into their own management systems. In
other words, independent verification must be balanced with
ownership and implementation of the client’s management system.
IFC also performs supervision visits to verify client information on
projects.
As a part of IFC’s due diligence process, IFC verifies quality of
client’s assessment and robustness of community engagement.
Third party verification may be advisable in some cases, but not
for all projects. See also the previous question and response.
IFC requires that clients establish an external grievance
mechanism channel appropriate to the scope, risk and impacts of
the project. The revised PS 1 will clarify language, ensuring that (i)
stakeholders are informed of all grievance mechanism channels
available to them; (ii) community grievance requests are
documented; and (iii) design of the grievance mechanism channel
will be culturally appropriate and take into account community
feedback. To the greatest extent possible, grievance mechanisms
will build on existing mechanisms for conflict resolution and
grievance redress, rather than establishing parallel systems.
No. The nature of consultation will be determined on the basis of
project context and stakeholder needs. A public meeting may not
be the most appropriate way of soliciting stakeholder views and
interest in all cases. In some cases, conducting focus groups,
interviews, surveys and other methods may be a more effective
way to engage with stakeholders than public consultation, and

Comments
IFC should require documentation of labor
practices and management-labor relations,
mapping and documentation of supply chain;
documentation of supplier/contractor oversight
and measures taken to ensure compliance with
Performance Standards; outside
communication; and stakeholder engagement.
With the level of detail in the recommended
management system requirements, there is a
danger of “over-bureaucratizing” the
requirements, and imposing a Western model
that doesn’t work for companies in emerging
markets.
IFC should include provisions on management
commitments, including legal requirements or
commitments made as a result of the project.
This includes things like making sure that
commitments are doable, appropriately
resourced, etc.
IFC should include recommendations or
requirements as to what a project funded by the
IFC should do, if it wants to change one of the
key parameters from that which was originally
agreed.
There is no public information disclosing
whether IFC’s Financial Intermediary clients
have social and environmental management
systems in place – FIs should be held to the
same standards as other IFC clients.
Include language in PS 1 to highlight that
company-sponsored mechanisms should exist
within an “accountability framework”. It
includes: (1) community access to remedies
through courts, the Compliance Advisor
Ombudsman (CAO), and other independent
dispute-resolution bodies; (2) third party
monitoring and verification; and (3) public
reporting. Furthermore, IFC should require
clients to disclose the existence of the CAO and
how to access it.
thus IFC must allow for the client to determine the most
appropriate methodology. IFC sometimes enters a project after
construction has started or while the project is in operation, and
cannot require specific actions by clients before IFC has become
involved.
The management program element in the PS 1 clearly requires
documentation of social and environmental procedures, practices,
plans, and supporting information where needed to manage
performance. In addition, specific labor and related issues,
including specific documentation of policies and procedures
covering labor and working conditions, are addressed in PS 2.
The PS 1 management system requirements are less complex
and use a “lighter touch” than ISO and other recognized “western”
international management system standards. IFC’s portfolio
includes actual examples where these processes are being
successfully applied across a range of investment types and
structures, including financial intermediaries and corporate deals,
operating in different countries and contexts.
PS 1’s Policy element requirement addresses commitments to
meeting appropriate and relevant legal requirements and the
specific requirements of PS 2 through 8. What’s more, the
“Organizational Capacity and Competency” element explicitly
requires that sufficient management sponsorship and human and
financial resources be provided.
Recognizing that a management system is a dynamic, continuous
process, PS 1’s monitoring and review element addresses how
clients may have to amend management programs and plans to
ensure the intent of the Policy is met – that is, complying with the
PS – if conditions change. IFC’s Policy on Social and
Environmental Sustainability describes how, through specific
provisions of the legal agreements pertaining to financing of
clients’ activities, IFC works with the client to ensure PS
compliance and how IFC exercises its rights and remedies.
For FI clients, IFC publicly discloses information through the
Summary of Project Information (SPI) pertaining to requirements
for their social and environmental management systems. And as
indicated in IFC’s Policy on Social and Environmental
Sustainability, and commensurate with the risks associated with
the FI’s investment activities, FI clients are required to comply with
PS 1.
In addition to the specific grievance mechanism requirements for
clients articulated in PS 1, IFC’s Policy on Social and
Environmental Sustainability contains language referring to the
role of administrative and legal procedures available in the host
country for this activity. What is more, the Policy contains
language on the role of the CAO. Finally, IFC project-specific
legal agreements contain client obligations with regard to the
CAO’s activities.
IFC should disclose the full matrix, or a IFC will disclose a robust description of the consultation process
comprehensive summary, informing and the basis for which it determined broad community support,
stakeholders of who was consulted and when where applicable, for the project.
during the determination of broad community
support (BCS), how representative the
consultations were, and how IFC ensured the
community understood the process.

Client documentation and disclosure should be IFC’s new Access to Information Policy requires regular updates
expanded to include progress on community and disclosure of progress throughout the project’s life cycle.
development plans and Indigenous Peoples
Development Plans.

Provide guidance on Climate Change Guidance Note 1 provides some general guidance related to the
considerations (such as level of GHG emissions, assessment of risks and impacts of climate change. Specific
impact, physical impacts on local communities, requirements related to outcomes are addressed in the relevant
impact on scarce natural resources) that should Guidance Notes for PS 3, PS 4, PS5, PS 6, and PS8.
be included in the Assessment and accordingly
reflected in the Action Plan.
Note: IFC’s responses to questions and comments are based on the current draft (Version 2) of IFC’s
Sustainability Framework. They are subject to change as the Framework is further revised. No text in
the Framework or in these interim comments and responses is final until approved by IFC’s
Management and Board.