Welcome to the
EBRD Sustainability
Report 2014



The EBRD seeks to ensure that the projects we finance are environmentally and socially sustainable, respect the rights of affected workers and communities, and are designed and operated in compliance with applicable regulatory requirements and international good practice.

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EBRD e-learning programme for FIs: + Site visits conducted to

800 + 33 registered users + financial intermediaries
  • In 2014

    €370,000 mobilised for OHS appraisals
  • In 2014

    Three major EBRD governance policies revised
  • In 2014

    62 project monitoring visits across the region

Category A projects + Environmental and social reporting

13 Category A projects required an ESIA in 2014; 8 proceeded to Board for review and approval + 95 per cent of projects have fulfilled our environmental and social reporting requirements over the last two years

Good Governance Policies

In May 2014 our Board of Directors approved revisions to three major EBRD governance policies: the Environmental and Social Policy (last updated in 2008), the Rules of Procedure for the Bank’s independent Project Complaint Mechanism (2009) and the Public Information Policy (2011).

This followed a simultaneous review of the three policies that took into account the lessons we learned from experience, changes in international practice and the views of stakeholders, including clients, industry associations, civil society, peer organisations and the Bank’s shareholders. Public meetings were held in Bulgaria, Georgia, Kazakhstan, Morocco, Russia and Ukraine and at our Headquarters in the United Kingdom. The new policies went into effect in November 2014 and are available on our website.

Key changes to the Environmental and Social Policy included: placing more emphasis on the importance of human rights; explicit references to the need for gender considerations to be identified and addressed at the project level, in line with the Bank’s Strategic Gender Initiative; and making resource efficiency a main priority, reflecting our Sustainable Resource Initiative. The Policy’s performance requirements were revised to include a greater focus on road safety, animal welfare and the environmental and social risks associated with supply chains. The Policy also clarified its biodiversity requirements and broadened the concept of vulnerability to specifically include gender identity and sexual orientation.

Under the revised Public Information Policy we will publish Environmental and Social Impact Assessments on our website; prepare project summary documents (PSDs) for a wider range of transactions, and enhance the information they provide on environmental and social performance; and disclose transition impact ratings for public sector projects in PSDs.

The revised Rules of Procedure for the Project Complaint Mechanism allow a request for a Problem-solving Initiative to be submitted by an individual and/or group with not only economic, but also social and cultural interests, in the area impacted by a Bank project. Complaints are now eligible for a Compliance Review for two years after final repayment, exit from equity or cancellation of a project. For further information, see here.

Operational results in 2014

The environmental and social category – A, B, C or FI (Financial Intermediary) – reflects the potential impacts associated with a project and determines the nature of the environmental and social appraisal, information disclosure and stakeholder engagement required.

Category A projects: Projects with potentially significant and diverse environmental and social impacts, requiring a detailed participatory assessment process.

Category B projects: Projects with environmental and social impacts that are site-specific and which can be readily assessed and managed.

Category C projects: Projects that are expected to result in minimal adverse environmental or social impacts.

Category FI projects: Transactions that involve the provision of financing to a financial intermediary – typically a bank or a fund – which are required to adopt and implement procedures to manage their environmental and social risks.

Disclosure of Category A projects

A total of 13 new Category A projects requiring an Environmental and Social Impact Assessment (ESIA) were in an active disclosure period during 2014.

Eight of the projects proceeded to the Board of Directors for review and approval; five projects have not yet been scheduled for Board consideration. Two additional projects that were in a disclosure process were cancelled and removed from the website after six months, in accordance with the Public Information Policy 3.3.

Of the projects proceeding to the Board of Directors, all projects met the disclosure period requirement of 60 days minimum for private sector projects or 120 days minimum for public sector projects before Board review.

Full ESIAs for all 13 projects were available in local languages and were disclosed electronically. Links were provided to each project’s ESIA page on our website. Since 7 November 2014, all new ESIAs are being disclosed directly on our website in addition to the client’s website.

In 2014 one request was made by an institution to review ESIAs in our offices in London.

Project name Project number Country Sector Date of ESIA release Date of Board decision Days available before Board meeting Language of ESIA
Central Anatolia (Etlik) Hospital 44166 Turkey Private 24/05/13 N/A -- Turkish and English
Adjaristsqali HPP (Shuakhevi) 45335 Georgia Private 17/10/13 30/04/14 196 Georgian and English
Land power wind farm 44601 Romania Private 14/11/13 29/01/14 77 Romanian, and some documents in English
Dariali HPP 45542 Georgia Private 20/01/14 07/05/14 108 Georgian and English
Alpaslan II dam hydro project 45474 Turkey Private 09/04/14 25/06/14 78 Turkish and English
Darlowo Wind 45739 Poland Private 07/05/14 15/10/14 162 Polish and some in English
Gdansk expansion 45805 Poland Private 09/05/14 15/10/14 160 Polish and English
National roads programme 45987 FYR Macedonia Public 27/05/14 11/11/14 169 FYR Macedonian and English
Yereymentau Wind Farm 45618 Kazakhstan Public 30/07/14 26/11/14 120 Russian and some documents in English
EFELER GPP 44596 Turkey Private 23/09/14 N/A -- Turkish and English
Korytnica 46496 Poland Private 15/10/14 N/A -- Polish and English
Polenerga Wind Farm portfolio 46962 Poland Private 15/10/14 25/02/15 134 Polish and English
Project Koktaszhal 46788 Kazakhstan Private 14/11/14 11/02/2015 90 Kazakh and some in Russian and English


Some projects in which we invested are unable to comply fully with all of the requirements of the Environmental and Social Policy. The EBRD Board approved derogations from the Policy for three projects signed in 2014. The specific derogations for these projects were agreed where affordability or operational constraints made full compliance unachievable but the overall environmental, social and economic benefits of the projects were sufficient to justify our investment. With the exception of the agreed derogations, these projects will meet our Policy and Performance Requirements.

Board-approved derogations for new projects in 2014

Project Derogation Country Sector
Talas Water Project Project will not comply with EU standards for wastewater discharge due to affordability constraints Kyrgyz Republic Municipal and environmental infrastructure
Bishkek Water II Subproject Project will not comply with EU standards for wastewater discharge due to affordability constraints Kyrgyz Republic Municipal and environmental infrastructure
Khujand Wastewater Project Project will not comply with EU standards for wastewater discharge due to affordability constraints Tajikistan Municipal and environmental infrastructure

Project monitoring

The EBRD monitors the environmental and social performance of all of its projects throughout the investment cycle. This monitoring normally involves a combination of client reporting, regular site visits by EBRD staff and independent audits.

As part of our monitoring, we require each of our clients to provide us with a report, at least annually, on their environmental and social performance and the implementation of applicable Environmental and Social Action Plans (ESAPs). Across our portfolio, 95 per cent of projects have fulfilled this environmental and social reporting requirement over the last two years.

A lack of environmental and social reporting by a client is one of the factors that can trigger enhanced monitoring by our Environment and Sustainability Department, leading to more frequent site visits or assistance with capacity-building initiatives.

We conducted environmental and social monitoring visits to 62 projects in 2014.

At the start of 2014 our project portfolio included 75 active Category A projects. Based on monitoring and supervision during the year, we consider that 63 (82 per cent) of these projects are meeting or exceeding our Environmental and Social Policy and Performance Requirements; 12 projects have issues that need to be addressed and their overall compliance with the Performance Requirements is rated as “marginal”; and none of these are considered to have a “poor” overall compliance rating. Where projects are found to be falling below the environmental and social standards that have been agreed with clients, we provide enhanced supervision and assistance to help improve the performance of these projects.

Financial intermediaries

Our environmental and social requirements for financial intermediary (FI) projects are set out in Performance Requirement 9 of our Environmental and Social Policy (ESP). They focus on ensuring that banks, private equity funds and other financial institutions receiving our financing have appropriate environmental and social risk management systems in place.


In light of our updated ESP, in May 2014 we began the task of upgrading the overall structure, design and content of our Environmental and Social Risk Management Manual (e-Manual). The aim of the e-Manual is to provide FIs with an easily accessible, user-friendly resource that contains the ESP procedures relevant to their business activities and other important information for managing environmental and social risk. Phases I and II are now complete, with Phase III expected to be complete by spring 2015 when the revised e-Manual will be available on our website, along with industry subsectoral guidelines for FIs.

Training and capacity-building

We provide a range of training and capacity-building services to assist FIs in preparing appropriate systems. Our e-learning programme for FIs, which focuses on environmental and social risk management in commercial banking, was launched in 2013 and had over 800 registered users at the end of 2014.

Developed with expert input from leading international consulting firms, the course provides FIs with a strong understanding of relevant environmental and social issues, the risks these can present to banks, and our recommended policies and procedures for managing these risks. The e-learning course is available free of charge. For further information, visit ebrd.coastlinesolutions.com.


The EBRD’s increasing emphasis on distance learning to build capacity for environmental and social risk management is complemented by a consistently strong focus on monitoring individual FI projects to ensure that they develop and implement appropriate policies and procedures.

In addition to desk-based monitoring, we conducted site visits to 33 financial intermediaries during the year. In June 2014 we launched the EBRD Financial Intermediary Sustainability Index (SI), which was designed to help our partner financial institutions understand how they are responding to sustainability issues and the extent to which they are implementing a systematic approach to managing them. The Index will allow FIs to periodically self-assess and potentially compare their progress in implementing effective arrangements for sustainability risk-management. The SI will also allow us to compare FIs in this area over time and to monitor progress at the portfolio level. Over 250 partner FIs are using the SI.


Policy dialogue and international cooperation continued to be an important part of our wider efforts to promote good environmental and social practice in the financial sector. In 2014 the EBRD participated in the Finance Initiative Annual General Meeting.

We also played an active role in meetings and initiatives with other multilateral financial institutions and European Development Finance Institutions, to share experiences on implementing good practice and the environmental and social aspects of investing in FIs.

Occupational health and safety

Occupational health and safety (OHS) continued to be a key theme in the EBRD’s due diligence, monitoring, technical cooperation and international partnership work in 2014, reflecting the persistent challenges this issue presents in the countries where the Bank invests and other emerging markets.

At the EBRD, we hold all Bank-financed projects to high OHS standards. Health and safety requirements, and our corresponding assessment and monitoring processes, were further strengthened in 2014 with the adoption of our new Environmental and Social Policy (ESP) and updated Performance Requirements (PR4). Occupational and public health and safety are now integrated into the new PR4 to provide a more holistic approach to the management of health and safety risks that may impact both workers and communities. In addition, the updated ESP now emphasises matters such as traffic and road safety, product and services safety, and universal access, which have become issues of increasing importance in recent years. To help implement these updated requirements, we reviewed and strengthened our due diligence questionnaires and client reporting requirements, and also increased our focus on raising awareness and providing training to a range of departments and teams within the Bank.

Our clients are required to notify us about any fatalities and serious incidents, so that we can take prompt and effective action where necessary; track and respond to trends across the Bank’s portfolio; understand what lessons we can learn; and report periodically to senior management and/or the Board. In 2014 we were notified of serious incidents by 32 clients, which sadly resulted in 96 (102 in 2013) fatalities. These statistics must be seen in context: the EBRD’s portfolio consists of more than 1,500 active projects that collectively involve tens of thousands of employees and contractors, and millions of customers and end users. Nevertheless, these losses of life (and the economic as well as human cost involved) provide a sobering reminder of the challenges faced by businesses, workers and communities in the Bank’s region, and underline our ongoing commitment to continuously improve our results.

Analysis of serious incident data for the last five years reveals some consistent patterns. The highest risk sectors are transport – particularly large national railway companies – and power and energy, where electrical safety is a significant problem.

The top five causes of fatalities are identified as:

  • being caught or struck by an object – hit by rolling stock, moving vehicles, loose or unsecure objects, and lifting equipment
  • falls from heights – applies to all sectors but particularly telecommunications, rail and construction
  • contact with energy sources – for example, electrocution while carrying out repairs and maintenance on equipment or working in close proximity to live conductors
  • collapse of ground conditions – excavation collapses and landslides
  • failure of work equipment – work equipment that has been adapted, improvised or poorly maintained.

This analysis was used to guide our intervention priorities in 2014. For example, site visits are now carried out by OHS specialists for projects where health and safety could be a concern. We have also increased the distribution of safety alerts to our clients’ health and safety managers, other development finance institutions, and health and safety associations operating within our region. In addition, we have mobilised around €370,000 from the Shareholder Special Fund for occupational health and safety appraisals and capacity-building for clients in higher-risk sectors.

Leading international cooperation

Occupational health and safety is a constant challenge in almost all emerging markets and continues to demand close and effective cooperation and partnership, both within the development finance community and with other key stakeholders. In November 2014 we hosted the first-ever development finance institution (DFI) Working Group on Occupational Health and Safety. Representatives from 13 organisations, including the World Bank, the International Finance Corporation, the European Investment Bank and the African Development Bank, came together to discuss common safety challenges, share information and find effective intervention points during project design and monitoring.

The meeting identified a need for closer and more substantive cooperation on OHS matters in the future, and highlighted a range of practical opportunities for DFIs to learn from one another, become better aligned in the way that we monitor, track and report on OHS performance, and work together to bring about positive change at the systemic and project-specific level.

Project Complaint Mechanism

The Project Complaint Mechanism (PCM) is the EBRD’s accountability mechanism for assessing and reviewing complaints about projects that the EBRD finances. It provides individuals and local groups who may be directly or adversely affected by an EBRD project, as well as civil society organisations, with a means of raising complaints or grievances with the Bank independently from our banking operations.

The PCM has two functions. Through its Compliance Review procedure, the PCM reviews complaints from parties concerned that the Bank has failed to adhere to applicable policies in a particular project. Through its Problem Solving Initiative the PCM assists members of the affected community in addressing their grievances with the project sponsor. Affected parties can make a request for one or both of these functions.

In 2014 the PCM registered five new complaints and continued working on different stages of the review process for four ongoing complaints registered in 2013 and 2012. In addition, following findings of non-compliance in relation to the Boškov Most HPP (FYR Macedonia), Ombla HPP (Croatia) and Paravani HPP (Georgia) projects, the PCM produced its first Compliance Review Monitoring Reports in 2014. These reports are prepared by a PCM Officer, who monitors the implementation of the recommendations found in the respective Compliance Review Reports.

Alongside our Environmental and Social Policy and Public Information Policy, the PCM Rules of Procedure underwent an extensive review process in 2014. This review involved multiple consultations with stakeholders and the public, and took into account written comments and suggestions made during meetings at our London Headquarters and in various countries where we invest. A number of changes were introduced to the Rules in an effort to improve the mechanism’s processes, efficiency and accessibility to local communities. The new PCM Rules of Procedure (2014) were approved by the EBRD Board of Directors in May and came into force in November 2014.

Details of all complaints and reports, together with the PCM Annual Report for 2014, are available on the PCM website.