Sustainable lending

World Bank environmental and social standards

In the 1970s and 1980s the World Bank financed high-profile projects like the Sardar Sarovar Dam in India's Narmada Valley and the Transmigrasi in Indonesia.

With thousands of people being uprooted as a result, the World Bank came under increased public pressure and so passed a resettlement policy to ensure that social considerations be taken into account in such project-induced displacements.

Over the course of time, the World Bank Group (IBRD, IDA, IFC, ICSID and MIGA) has established additional safeguard policies that have set minimum environmental and social standards for financing projects of all kinds. These environmental and social standards prescribe, for instance, when the impact on the environment must be assessed, the degree to which the population affected is to be involved in the project, how biotopes and habitats are to be handled and how to prevent the rights and human dignity of indigenous peoples from being compromised.

Complementing these standards is the Pollution Prevention and Abatement Handbook (PPAH), which contains guidelines for efficiently avoiding environmental, health and security risks. They include, for example, industry-specific requirements for physical thresholds and their monitoring.

Back in 2004, we committed ourselves to complying with the environmental and social standards of the World Bank in our Bank-wide credit risk strategy. In order to comply with the World Bank requirements, the stipulations of the 70 or so guidelines were broken down into checklists and tailored to the Bank's internal work processes. This enabled BayernLB - in contrast to many other banks - to integrate the World Bank standards into its existing processes in a manageable form.