Environmental and social due diligence
Since the mid-1990s, OECD countries have been sharing information on their policies, practices and experiences with regard to addressing environmental and, more recently, social issues when providing export credits.
The most recent agreement, the 2024 Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (Recommendation on Common Approaches), encourages the use of stringent international standards and good international industry practices among export credit providers, thereby contributing to sustainable development.
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About
Adherents to the Recommendation on Common Approaches
The adherents to the Recommendation are the OECD countries.
While an OECD Recommendation is not legally binding, it expresses the common position or will of the whole OECD membership, and therefore may entail important political commitment for Member governments.
2024 Recommendation on Common Approaches
The 2024 Recommendation is the most recent Agreement relating to environmental and social due diligence. It sets common approaches for addressing the environmental and social impacts of projects that are facilitated by officially supported export credits. It includes measures for undertaking due diligence, benchmarking projects against international standards, and applying conditions to prevent, minimise, mitigate or remedy potential adverse impacts.
The Common Approaches is monitored by the Working Party on Export Credits and Credit Guarantees (ECG).
Monitoring of the Recommendation
- periodic surveys of Members’ policies and practices that relate to environmental and social due diligence;
- information provided by Members for all projects supported that have a potentially high or medium negative environmental or social impact (Category A and B projects);
- publication of information on how Export Credits Agencies (ECAs) implement the Common Approaches, together with information on the Category A projects under consideration and the Category A and B projects supported in any one year.
- regular semi-annual meetings of the Environmental Practitioners, ECG subgroup, discussing the best practices of implementing the Recommendation on Common approaches.
Key messages
- 2024 Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence.
- 2016 Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence.
- 2012 Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence.
- 2007 Recommendation on Common Approaches on the Environment and Officially Supported Export Credits .
- 2005 Recommendation on Common Approaches on the Environment and Officially Supported Export Credits .
- 2003 Recommendation on Common Approaches on the Environment and Officially Supported Export Credits .
- 2000 Action Statement on the Environment
- 1999 Agreement on Environmental Information Exchange for Larger Project
- 1998 Statement of Intent on Officially Supported Export Credits and the Environment
In order to monitor the Recommendation, ECG Members agree to share publicly their environmental and social due diligence practices and policies in an annual survey.
ECG Members have also committed to answer an annual survey on climate and sustainability related policies and practices.
The Recommendation requires Adherents to provide information on projects for which official support has been provided that have a potentially high (Category A projects) or medium (Category B projects) negative social or environmental impact.
Pursuant to the 2016 Recommendation:
The OECD hosts an annual workshop for Practitioners from Export Credit Agencies and other Financial Institutions. These workshops are an opportunity for environmental and social (E&S) specialists from all types of financial institutions to meet, share experiences, and explore E&S issues with a view to improving due diligence techniques and promoting a consistent approach to addressing E&S impacts.
These workshops are open to environmental and social specialists from all types of financial institutions. The next workshop will take place on 5 to 6 February 2025, in person, at the OECD Conference Center in Paris. For more information on how to attend, please email to export-credits@oecd.org
- Upcoming Workshop in 2025
- 10th Workshop (2024)
- 9th Workshop (2023)
- 8th Workshop (2022)
International standards
When undertaking a review, Adherents should benchmark projects against the relevant aspects of all eight IFC Performance Standards. Where projects involve sovereign obligors, Adherents may instead benchmark projects against the relevant aspects of all ten World Bank Environmental and Social Standards.
Guidance Notes
The following Guidance Notes have been developed within the framework of technical work undertaken by environmental and social experts relating to the Recommendation on Common Approaches.
- Guidance Note on Good Practice in the use of Consultants by Export Credit Agencies
- Good Practice Note for Environmental and Social Agents – which was endorsed on 28 May 2021 by the Equator Principles Association.
These Guidance Notes may be used by banks, ECAs, or other entities. However, the aim is not to replace, modify or supersede any relevant policies or processes that banks, ECAs or other entities have developed or may develop in the future.
Accordingly, these Guidance Notes should not be considered as standards or as required action lists, but as tools to be used by banks, ECAs or other entities, as appropriate and at their own discretion. It is also important to note that other actions may be appropriate on a project-by-project and ECA-by-ECA basis.