U N D E R S TA N D I N G

AN ESG AND
I M P L E M E N TAT I O N
ESMS
DEXTRA GROUP

2023
 AGENDA

IFC Group Exercise

Performance
Standards
Overview
ESG Concepts Introduction to Wrap-up
& ESMS Q&A
Importance
OBJECTIVE

To provide participants with a comprehensive

understanding ESG concepts and how to
effectively implement an environmental and
social management system (ESMS) in their
organizations, in alignment with the IFC
performance standards.
ESG CONCEPTS
& IMPORTANCE
 DEFINING ESG (ENVIRONMENTAL, SOCIAL,
AND GOVERNANCE)

THE ROLE OF ESG IN SUSTAINABLE BUSINESS

PRACTICES
ESG CONCEPTS
& IMPORTANCE
GLOBAL TRENDS AND DRIVERS OF ESG INTEGRATION

BENEFITS OF ESG FOR BUSINESSES

 T H R E E P I L L A R S O F S U S TA I N A B I L I T Y :
S U S TA I N A B I L I T Y
- ECONOMIC
- SOCIAL
- E N V I R O N M E N TA L

“Sustainability aims to BALANCING THE NEEDS OF

create a balance
between these three C U R R E N T A N D F U T U R E G E N E R AT I O N S
pillars, fostering
long-term well-being for
people and the planet.” THE CONCEPT OF THE
"TRIPLE BOTTOM LINE"
( P E O P L E , P L A N E T, P R O F I T )
“Environmental, Social and
Governance factors considered by
companies, investors, public sectors
and other organisations in a wide range
of decision-making processes and
situations including strategy, purpose,
financing, company reporting and
supply chain management.”
 ESG (ENVIRONMENTAL, SOCIAL & GOVERNANCE)

ESG is a concept used by investors, giving them a framework to assess

a company’s performance and risk.
 Two Different
ESG VS Sustainability Terms But With
The Same Goal
Using Environmental, Social and Governance
factors to evaluate companies on how far
advanced they are with sustainability.

ESG
Sustainability
A business achieves long-term
corporate success.
THE ROLE OF ESG IN SUSTAINABLE
BUSINESS PRACTICES

▪ Aligning business operations with long-term

sustainability goals
▪ Managing and mitigating environmental,
social, and governance risks
▪ Enhancing corporate reputation and
stakeholder relationships
▪ Creating long-term value for shareholders and
society
KEY ESG TRENDS
▪ Net Zero Action
▪ Climate, Biodiversity, And
Other Environmental Concerns
▪ Natural Capital And
Biodiversity Risks
▪ Social Issues In Supply Chain
▪ Social Issues — Like Diversity,
Equity, And Inclusion And
Worker Wellbeing
▪ Raising The Importance Of ESG
To Credit

11
 GLOBAL TRENDS AND DRIVERS OF ESG INTEGRATION

‫ ׀‬1 ‫ ׀‬3

‫ ׀‬2 ‫ ׀‬4

Regulatory
Increasing awareness developments
of climate change promoting ESG
and its impacts Growing demand for disclosure and Evolving investor
transparency and reporting preferences and
accountability expectations

© Copyright Bureau Veritas Slide / 12

BENEFITS OF ESG FOR IMPROVED RISK MANAGEMENT AND RESILIENCE
BUSINESSES

ENHANCED REPUTATION AND BRAND VALUE

INCREASED ACCESS TO CAPITAL AND INVESTMENT

OPPORTUNITIES

HIGHER EMPLOYEE ENGAGEMENT AND

PRODUCTIVITY

BETTER LONG-TERM FINANCIAL PERFORMANCE

WHY ESG (SET, DJSI)?
‫ ׀‬2

ESG performance is
‫ ׀‬1 increasingly used as an ‫ ׀‬3
indicator of a
SET (Stock Exchange
company's ability to
of Thailand) and DJSI
manage risks and Inclusion in SET and
(Dow Jones
create long-term DJSI can lead to
Sustainability Indices)
value. increased visibility,
recognize the
importance of ESG access to capital, and
integration for long- improved reputation
term corporate among investors and
sustainability. stakeholders.
 TOOLS TO
Environmental and Social Management System
ENHANCE ESG
(ESMS)
OPERATIONS

ESG reporting and disclosure

ESG data and analytics

Stakeholder engagement
ESG BEST PRACTICES: UNILEVER

Environmental: Ambitious goals for carbon

neutrality and zero waste in operations,
extensive use of renewable energy

Social: Commitment to fair labor practices,

inclusive workforce, health and well-being
initiatives for employees and consumers

Governance: Transparent reporting on ESG

performance, diverse and independent
board of directors
ESG BEST PRACTICES: PATAGONIA

Environmental: Focus on sustainable and eco-

friendly materials, commitment to reducing carbon
footprint, support for environmental causes

Social: Fair labor practices, family-friendly

workplace policies, emphasis on corporate
responsibility and activism

Governance: B Corp certification, commitment to

transparency, and responsible supply chain
management
 ENVIRONMENTAL: CARBON NEGATIVE BY 2030, EXTENSIVE
ESG BEST •
INVESTMENT IN RENEWABLE ENERGY, CIRCULAR ECONOMY
INITIATIVES
PRACTICES: • SOCIAL: EMPHASIS ON DIVERSITY AND INCLUSION, SUPPORT
MICROSOFT FOR EMPLOYEE WELL-BEING, COMMUNITY ENGAGEMENT
AND PHILANTHROPY
• GOVERNANCE: STRONG CORPORATE GOVERNANCE
STRUCTURE, EXECUTIVE COMPENSATION LINKED TO ESG
PERFORMANCE, TRANSPARENT REPORTING
ESG BEST PRACTICES : ØRSTED

• Environmental: Transition from fossil fuels

to renewable energy, commitment to reduce
carbon emissions, focus on biodiversity
• Social: Employee safety and well-being,
community engagement, responsible
supply chain management
• Governance: Transparent reporting on
ESG performance, diverse and experienced
board of directors, commitment to the UN
Sustainable Development Goals
ESG BEST PRACTICES : NATURA & CO
 IFC PERFORMANCE
STANDARDS OVERVIEW
 INTRODUCTION TO THE IFC PERFORMANCE STANDARDS

REVIEW OF THE EIGHT PERFORMANCE STANDARDS

IFC PERFORMANCE
STANDARDS

RELATIONSHIP BETWEEN THE PERFORMANCE

STANDARDS AND ESMS
OVERVIEW OF IFC PERFORMANCE STANDARDS
The international finance corporation (IFC)
performance standards provide a framework for
managing environmental and social risks and
impacts in projects financed by the IFC.

The performance standards are widely used and

recognized as a benchmark for ESG best practices
in the private sector.

There are eight performance standards, covering a

range of environmental and social topics.
 REVIEW OF THE EIGHT
PERFORMANCE STANDARDS

1 2 3 4 5 6 7 8

Assessment Labor and Resource Community Land Biodiversity Indigenous Cultural

and Working Efficiency Health, Acquisition Conservatio Peoples Heritage
Manageme Conditions: and Safety, and and n and
nt of Pollution Security Involuntary Sustainable
Environmen Prevention Resettleme Manageme
tal and nt nt of Living
Social Risks Natural
and Impacts Resources
RELATIONSHIP BETWEEN THE PERFORMANCE
STANDARDS AND ESMS

CONCLUSION

CONCLUSION
INTRODUCTION TO
ESMS
 INTRODUCTION TO THE IFC PERFORMANCE STANDARDS

REVIEW OF THE EIGHT PERFORMANCE STANDARDS

IFC PERFORMANCE
STANDARDS

RELATIONSHIP BETWEEN THE PERFORMANCE

STANDARDS AND ESMS
 ENVIRONMENTAL AND
SOCIAL MANAGEMENT
SYSTEM (ESMS)
“A proactive, systematic process or
approach that enables an organization or
business to identify, manage, and improve
its environmental and social performance.”

The ESMS framework provides a structured way to

manage potential and actual Environmental,
Social, and Governance (ESG) risks and impacts.
 Environmental and Social Management
System (ESMS)

PURPOSE

“It's a proactive, structured approach

to manage potential environmental
and social risks and impacts of an
organization's activities.”
PURPOSE
PURPOSE

IDENTIFY AND ESTABLISH IMPROVE ENHANCE IMPROVE

ASSESS MEASURES TO COMPLIANCE RELATIONSHIPS OVERALL
POTENTIAL AVOID, MINIMIZE, WITH WITH ORGANIZATIONA
ENVIRONMENTAL MITIGATE, OR ENVIRONMENTAL STAKEHOLDERS, L
AND SOCIAL OFFSET AND SOCIAL INCLUDING SUSTAINABILITY
RISKS AND ADVERSE LAWS, COMMUNITIES, AND
IMPACTS ENVIRONMENTAL REGULATIONS, EMPLOYEES, PERFORMANCE.
ASSOCIATED AND SOCIAL AND AND
WITH THE IMPACTS. STANDARDS. REGULATORS.
ORGANIZATION'S
ACTIVITIES.
 POLICY

I D E N T I F I C AT I O N O F R I S K S A N D I M P A C T S

MANAGEMENT PROGRAMS

COMPONENTS
OF AN ESMS O R G A N I Z AT I O N A L C A PA C I T Y A N D C O M P E T E N C Y

E M E R G E N C Y P R E PA R E D N E S S A N D R E S P O N S E

S TA K E H O L D E R E N G A G E M E N T

MONITORING AND REVIEW

 INTEGRATING ESMS INTO THE ORGANIZATION'S
OVERALL MANAGEMENT SYSTEM

‫ ׀‬1 ‫ ׀‬3 ‫ ׀‬5

‫ ׀‬2 ‫ ׀‬4

Understand the
Develop and
existing Monitor and
Map ESMS implement
management review
components to procedures Provide training
system
existing and capacity-
management building
processes
PERFORMANCE
STATEMENT 1

Environmental and Social Risks and Impacts

The assessment and management of environmental and social risks and
impacts associated with projects financed by the International Finance
Corporation (IFC). The standard aims to ensure that clients identify,
assess, and manage potential environmental and social risks and impacts
in a systematic and integrated manner, thereby promoting the overall
sustainability of their projects.
KEY REQUIREMENTS
1.Establish an appropriate Environmental and Social Management System
(ESMS).
2.Conduct comprehensive environmental and social risk assessment.
3.Develop and implement mitigation measures, possibly via an ESAP.
4.Set up monitoring and reporting systems for ESMS effectiveness.
5.Ensure meaningful engagement with affected communities and stakeholders.
6.Create an accessible, transparent grievance mechanism.
7.Timely disclosure of relevant environmental and social information.
PERFORMANCE
STANDARD 2

Labor and Working Conditions

Aims to ensure that projects financed by the International Finance
Corporation (IFC) identify, assess, and manage potential environmental
and social risks and impacts in a systematic and integrated manner. By
adhering to this standard, clients can contribute to the overall
sustainability of their projects and minimize adverse impacts on the
environment, affected communities, and other stakeholders.
KEY REQUIREMENTS
1.Compliance with national and international labor laws and standards.
2.Establishment of fair and transparent worker relations.
3.Respect for workers' rights, including unionization and peaceful assembly.
4.Promotion of equal opportunity and non-discrimination.
5.Maintenance of a safe and healthy working environment.
6.Prevention of child labor, forced labor, and human trafficking.
7.Provision of reasonable work conditions and fair compensation.
8.Implementation of a fair retrenchment plan in case of workforce reductions.
PERFORMANCE
STANDARD 3

Resource Efficiency and Pollution Prevention

Promote sustainable resource use and reduce environmental impacts by
minimizing the generation of waste, pollution, and greenhouse gas
emissions, thereby contributing to the overall sustainability of IFC-
financed projects.
 KEY REQUIREMENTS
1.Conduct an environmental assessment identifying potential efficiency and pollution
prevention opportunities.
2.Implement measures to enhance resource efficiency and minimize pollution.
3.Adopt a systematic approach to manage resource efficiency and pollution prevention.
4.Minimize and safely manage waste and hazardous materials, adopting reduction, reuse,
recycling strategies.
5.Limit pollutant release and mitigate impacts on human health and environment.
6.Minimize greenhouse gas emissions and promote energy efficiency throughout the project.
7.Engage with communities and stakeholders regarding resource efficiency and pollution
prevention.
PERFORMANCE
STATEMENT 4

Community Health, Safety, and Security

Focuses on community health, safety, and security in relation to projects
financed by the International Finance Corporation (IFC). The standard
aims to avoid or minimize the risks and adverse impacts on the health,
safety, and security of local communities, ensuring that IFC-financed
projects contribute positively to their well-being.
KEY REQUIREMENTS
1.Conduct comprehensive health, safety, and security risk assessment.
2.Design and implement measures to minimize community health, safety, and security
risks.
3.Develop emergency preparedness and response plans with stakeholder input.
4.Ensure security arrangements align with principles of proportionality and international
practices.
5.Engage with stakeholders on health, safety, and security concerns throughout the
project lifecycle.
6.Set up an accessible, transparent grievance mechanism for health, safety, and security
concerns.
PERFORMANCE
STANDARD 5

Land Acquisition and Involuntary Resettlement

Addresses land acquisition and involuntary resettlement related to
projects financed by the International Finance Corporation (IFC). The
standard emphasizes the importance of avoiding or minimizing adverse
impacts on affected persons and communities, ensuring that displaced
persons are adequately compensated, and improving, or at least
restoring, their livelihoods and living standards.
KEY REQUIREMENTS
1.Conduct a comprehensive assessment of land acquisition and involuntary resettlement
impacts.
2.Strive to avoid or minimize involuntary resettlement, if not, develop a Resettlement
Action Plan (RAP).
3.Compensate for any loss of land, assets, or resource access at full replacement cost.
4.Provide adequate assistance to displaced persons to maintain or improve their pre-
displacement living standards.
5.Engage with affected persons and establish a grievance mechanism for land acquisition
and resettlement concerns.
6.Monitor the RAP implementation and its effectiveness based on measurable
indicators.
PERFORMANCE
STANDARD 6

Biodiversity Conservation and Sustainable Management

of Living Natural Resources
Conservation of biodiversity and the sustainable management of living
natural resources in relation to projects financed by the International
Finance Corporation (IFC). The standard highlights the importance of
maintaining ecosystem services, protecting threatened species, and
promoting the sustainable use of natural resources, ensuring that IFC-
financed projects contribute to positive environmental outcomes.
KEY REQUIREMENTS
1.Conduct assessment of impacts on biodiversity and ecosystem services.
2.Apply mitigation hierarchy to address biodiversity impacts.
3.Protect and conserve critical habitats.
4.Implement measures to safeguard natural habitats and priority ecosystem services.
5.Promote sustainable management of living natural resources.
6.Establish a management plan for invasive alien species.
PERFORMANCE
STANDARD 7

Indigenous Peoples
The rights and interests of Indigenous Peoples in relation to projects
financed by the International Finance Corporation (IFC). The standard
emphasizes the importance of respecting Indigenous Peoples' rights,
particularly concerning land and natural resource use and access. It
requires clients to identify the Indigenous Peoples who may be affected
by the project and to engage them meaningfully in the project design
and implementation.
KEY REQUIREMENTS
1.Conduct a culturally-sensitive social assessment identifying affected Indigenous
Peoples.
2.Obtain Free, Prior, and Informed Consent (FPIC) for projects affecting Indigenous
Peoples.
3.Develop a plan ensuring full participation of Indigenous Peoples in decision-making.
4.Avoid or mitigate adverse impacts on Indigenous Peoples' lands, territories, and
resources.
5.Respect and protect the cultural heritage of Indigenous Peoples.
PERFORMANCE
STANDARD 8

Cultural Heritage
Protection and conservation of cultural heritage resources. The standard
acknowledges the importance of preserving cultural heritage for the
benefit of current and future generations and ensures that projects
financed by the International Finance Corporation (IFC) minimize adverse
impacts on these resources.
KEY REQUIREMENTS
1.Conduct comprehensive assessment of potential cultural heritage sites.
2.Minimize adverse impacts on cultural heritage through project design and measures.
3.Implement measures to protect cultural heritage in line with national/international
best practices.
4.Establish a contingency plan for unexpected discovery of cultural heritage during
project execution.
5.Engage with stakeholders, taking into account concerns related to cultural heritage.
6.Follow Performance Standard 8 to safeguard cultural heritage and promote
sustainable development.
Policy
▪ Companies should establish an Environmental and Social
(E&S) policy that reflects their commitment to managing
E&S risks and impacts.
▪ The E&S policy should be consistent with the IFC
Performance Standards and applicable laws and
regulations.
▪ The policy should be communicated to all employees and
relevant stakeholders.
 EXAMPLES OF ENVIRONMENTAL AND SOCIAL
(E&S) POLICIES
PURPOSE OF E&S POLICIES

▪ E&S policies demonstrate a company's commitment to managing

environmental and social risks and impacts.
▪ They provide a framework for decision-making and guide the
organization's actions related to E&S issues.
▪ Effective E&S policies are aligned with the IFC Performance
Standards, applicable laws and regulations, and industry best
practices.
 EXAMPLE 1 - ENVIRONMENTAL POLICY

▪ Commitment to reducing environmental impacts and promoting

sustainability
▪ Focus on key areas such as energy efficiency, waste
management, and climate change mitigation
▪ Targets for reducing emissions, conserving resources, and
increasing the use of renewable energy
▪ Monitoring and reporting on environmental performance
 EXAMPLE 2 - SOCIAL RESPONSIBILITY POLICY

▪ Commitment to treating all stakeholders with fairness, respect,

and dignity
▪ Emphasis on employee well-being, diversity and inclusion, and
community engagement
▪ Collaboration with local communities to promote sustainable
development
▪ Support for social and environmental initiatives that align with
the company's values
 EXAMPLE 3 - HEALTH AND SAFETY POLICY

▪ Commitment to providing a safe and healthy working

environment for all employees
▪ Implementation of robust health and safety management
systems
▪ Regular training and awareness programs to promote a
culture of safety
▪ Monitoring and reporting on health and safety performance
 EXAMPLE 4 - HUMAN RIGHTS POLICY

▪ Commitment to respecting and upholding human rights in all

aspects of the company's operations
▪ Adherence to international human rights standards, such as the
United Nations Guiding Principles on Business and Human
Rights
▪ Policies and procedures to identify, prevent, and address
potential human rights risks and impacts
▪ Engagement with stakeholders to ensure human rights concerns
are addressed
GROUP EXERCISE
IDENTIFYING ENVIRONMENTAL AND SOCIAL RISKS

▪ Participants work in groups to identify potential

E&S risks in a given project scenario
▪ Group presentations and discussion
IDENTIFICATION OF RISKS
AND IMPACTS

1.Companies should conduct a comprehensive

Environmental and Social Impact Assessment
(ESIA) to identify potential risks and impacts
associated with their project.

2.The assessment should consider direct,

indirect, and cumulative impacts, as well as the
perspectives of affected communities and
other stakeholders.

3.The process should be iterative, with risks

and impacts reassessed throughout the
project lifecycle.
 SAMPLE
Aspect Potential Environmental Risks
Loss of biodiversity, soil erosion,
Site Location potential pollution of local water
sources
Air pollution from construction
Construction Activities equipment, noise pollution, waste
generation
Energy consumption, waste
Operations generation, air emissions, potential
for spills or accidents
Supplier's environmental
Supply Chain
performance, transportation impacts
Transportation impacts, packaging
Product Distribution
waste
Waste management, potential for
End of Life Disposal
pollution
Potential Social Risks
Displacement of local communities,
disruption of local economy
Temporary influx of workers,
potential for accidents or health
hazards
Worker health and safety,
community health and safety,
potential labor issues
Labor practices at suppliers, impacts
on local suppliers
Impacts on local businesses, job
creation or loss
Impacts on waste management
infrastructure, potential job creation
 GROUP : ………………………..
Aspect Potential Environmental Risks Potential Social Risks

Site Location

Construction Activities

Operations

Supply Chain

Product Distribution

End of Life Disposal

WRAP-UP
KEY TAKEAWAYS

▪ ESG refers to environmental, social, and

governance factors that can influence a
company's long-term success and
sustainability.
▪ Integrating ESG into business practices
helps companies manage risks, enhance
their reputation, and create long-term value.
▪ Global trends and drivers are pushing
businesses to adopt ESG principles and
become more transparent and accountable.
KEY TAKEAWAYS
▪ ESG integration can lead to numerous
benefits, including improved risk
management, increased access to capital,
and better financial performance.
▪ ESG is a critical component of sustainable
business practices and is increasingly
recognized by indices such as SET and
DJSI.
▪ A variety of tools and strategies can be
used to enhance ESG operations, including
ESMS, reporting frameworks, data and
analytics, and stakeholder engagement.
KEY TAKEAWAYS
▪ The International Finance Corporation (IFC)
Performance Standards provide a comprehensive
framework for managing environmental and social
risks and impacts in projects financed by the IFC.

▪ These standards are widely used as a benchmark for

ESG best practices in the private sector globally.
They serve as a guide to ensure sustainability is
effectively integrated into the decision-making
process.

▪ PS1, one of the eight standards, focuses on the

establishment and implementation of an
Environmental and Social Management System
(ESMS).
KEY TAKEAWAYS
▪ The core concept of an ESMS is to integrate
environmental and social considerations into
the business decision-making process.
▪ ESMS;
▪ Systematic
▪ Risk-Based
▪ Integrated
▪ Involves Stakeholder Engagement
▪ Continuously Improved
 Q&A
SUBTITLE

KUNCHUDA DISYABUTRA
Sustainability Manager

▐ 0800682758 DR.POONPERM VA
▐ kunchuda.disyabutra@bureauveritas.com Sustainability Product Development
Manager

BUREAU VERITAS ▐ 0800682786

▐ poonperm.va@bureauveritas.com

BUREAU VERITAS
WWW.BUREAUVERITAS.COM