Environmental and Social Due Diligence Assessment

Environmental and Social Due Diligence Assessment

Microfinance Institution, Cambodia

SLP Environmental Co., Ltd was appointed by an International Financial Institution (IFI) to perform environmental and social due diligence (ESDD) on an established microfinance institution (the Company) which operates in Cambodia and offers a range of micro financial services. The Company plans a corporate bond issuance which will be guaranteed by the IFI and is required to comply with the clients’ Environmental and Social Safeguards (ESS). SLP was appointed as an independent consultant to assess the Company’s performance with respect to the Safeguards Requirements (SR) adopted for the Assignment which included:

  • Prohibited Investment Activities List (PIAL);
  • Clients Environmental and Social Safeguards (ESS) Policy;
  • ADB Safeguard Requirements 1-4;
  • National requirements pertaining to E&S performance; and
  • ILO Core Labour Standards.

The primary objectives of the Environmental and Social Due Diligence were to:

  • Assess the Company’s conformance status with respect to safeguards requirements;
  • Clearly identify any gaps and prioritise them in terms of significance;
  • Recommend appropriate corrective actions (CA’s) to close gaps and align Project E&S performance with safeguards requirements;
  • Set timelines for implementation of CA’s based on assigned priority;
  • Specify appropriate Completion Indicator to verify gap closure;
  • Prepare a bespoke Environmental and Social Action Plan (ESAP); and
  • Assess the capacity and resources of the Company to implement the ESAP requirements.

Following the completion of the ESDD assignment, SLP was appointed to further develop the Company’s ESMS and provide high level training on its implementation.