Environmental and social assessment

Assessment and monitoring of the environmental and social impacts of credit insurance and investment insurance projects

Environmental and social assessment

Presentation

On April 14th, France and nine other countries (Belgium, Denmark, Finland, Germany, Italy, Netherlands, Spain, Sweden, UK) launched an international coalition « Export Finance For Future (E3F) » which aims to align export finance with climate change objectives. The coalition has been extended on November 24th to ten members, including Belgium, Finland, Italy. The members are committed to:

  • Developing incentives mechanisms to better support sustainable export project, in all sectors of the economy;
  • Ending all financial support for coal-related export projects;
  • Reviewing financial support for fossil fuels exports and establish the best trajectory for eliminating support to this sector, taking into account their respective characteristics;
  • Reviewing all their export finance activities in order to have a shared and documented understanding of their climate impacts, and work to improve the transparency of information, in particular when it comes to identifying sustainable projects;
  • Promoting the initiative and engaging discussions with other countries proposing export finance, in every relevant institution, and within the OECD, with a view to creating a level playing field that takes into account the climate urgency.

For more information, you can consult the document below « Statement of principles » (other documents).

Why an environmental and social analysis of projects

Environmental and social aspects are part of Bpifrance Assurance Export guarantee criteria for all credit-insurance projects over €10M or located in a sensitive area, or investment insurance projects.

Bpifrance Assurance Export realizes its environmental and social analysis in accordance to OECD Recommendation on Common Approaches to officially supported export credits and environmental and social due diligence (2016). It aims to ensure that projects comply with the local regulations and the relevant international standards, mainly those developed by the World Bank (WB) and the International Finance Corporation (IFC).

REGULATORY FRAMEWORK

Common Approaches are signed by all OECD member countries and reviewed on a periodic basis. The latest version was adopted on the April 7th, 2016 by OECD Council. It strengthens the provisions related to greenhouse gases, social impacts of projects and human rights.

In addition, the annex IV of the OECD Arrangement encourages advanced environmental technologies exports and applies to project that contribute to climate change mitigation.

All about environmental and social assessment

PROCEDURE: E&S ASSESMENT ON AN APPLICATION FOR COVER

Every application for credit insurance is followed by an appendix entitled Global Impact, Environmental and Social Assessment, which contains two parts.

If the project meets one of the two eligibility criteria of the first part (amount of the contract > €10M and/or location of the operation in a sensitive zone), a thorough environmental and social analysis must then be conducted by Bpifrance Assurance Export. The second part of the appendix, which contains a more detailed environmental and social assessment questionnaire, must then be completed.

For investment insurance applications, the Environmental and Social Assessment appendix also has two parts. The first is systematically completed; whereas the second is only completed if the investment is part of a sector of activity or environment deemed to be environmentally and socially sensitive.

The information gathered in the appendix must allow Bpifrance Assurance Export to classify the project into one of the following three categories, according to the importance of its environmental and social impacts:

  • Category A: project with significant potential impacts, for which an environmental and social impact assessment is required. This category of operations requires in-depth environmental and social analysis as well as risk monitoring;
  • Category B: project with lower potential impacts, for which additional information may be required. This category of operations requires a less detailed environmental and social analysis, as risk monitoring is not systematic;
  • Category C: project with little or no environmental and social impact. This category of operations does not require a detailed environmental and social analysis. No risk monitoring will be required.

Operations must be assessed against sectoral or specialised standards, guidelines or other nationally and internationally recognised standards, with the most stringent standards being applied. As part of the assessment and monitoring of operations, Bpifrance Assurance Export may need to request additional information and perform on-site audits.

If necessary, Bpifrance Assurance Export’s cover may be subject to environmental and social conditions to ensure compliance with the standards in force, based on the opinion of Bpifrance Assurance Export and, where applicable, the relevant technical government departments.

TRANSPARENCY: PUBLICATION OF E&S INFORMATION

Bpifrance Assurance Export respects the right of the public regarding access to information concerning covered projects. There are two components to the transparency framework:

  • Ex-ante transparency: prior to the decision to grant cover, for projects under investigation that have been classified as category A. This ex-ante transparency is provided particularly for civil society and the local populations affected by the projects. For projects classified as category A, Bpifrance Assurance Export requests to receive all relevant environmental and social information, in particular the environmental or social impact assessment (ESIA), the environmental and social management plan (ESMP), and the Resettlement Action Plan (RAP) for displaced persons as applicable. In line with the OECD Common Approaches, Bpifrance Assurance Export will transparently release the published documents (ESIA). At the request of the buyer or exporter, any information in these documents in which the disclosure would undermine the commercial or industrial confidentiality of the export may be previously redacted. The ex-ante transparency period begins on the date the information is made available on the Bpifrance website, for at least 30 calendar days before the final commitment to provide support.
  • Ex-post transparency: after the decision to grant cover, for projects classified as category A or B and those relating to contracts worth more than €10 million, obtained by French companies and covered by Bpifrance Assurance Export. This ex-post transparency is carried out on a quarterly basis. It provides a description of the projects and, as applicable, the essential information on their environmental and social consequences as well as the requirements of Bpifrance Assurance Export in terms of monitoring.

All about environmental and social assessment

Bpifrance, positioned as the French Climate Bank, and the French government offer preferential export guarantee conditions for climate sustainable projects.

The Climate bonus is available since January 1st, 2021, for all your Credit Insurance applications (in appraisal or in guarantee promises) respecting the eligibility criteria.

Useful links to international reference standards

Documentation

QA Climate Bonus07-03-2022
PDF (0.2MB)
QA Climate Bonus…
PDF (0.2MB)
User guide Climate bonus07-03-2022
PDF (0.4MB)
User guide Climate…
PDF (0.4MB)

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