Environmental and social assessment

All operations financed by BSTDB are subject to environmental and social assessment as an integral part of its due diligence and appraisal process, along with risk management, financial and economic analysis, monitoring, evaluation, and other functions, which form the operation cycle of the Bank as per its Operation Cycle Policy. 

The environmental and social assessment is carried out by the Environmental and Social Sustainability Office (DES) of BSTDB and has the following main objectives: 

• to identify and assess the potential environmental and social risks and negative impacts associated with any given operation considered by the Bank for financing, including the ones that may affect the reputation of the Bank;
• to identify efficient preventive and mitigation measures, as well as potential environmental and social opportunities; and
• to integrate these into the operation structure.

Thus, the Bank can take an informed decision on whether to provide financing to the assessed prospective operation, and if so, what are the environmental and social issues that need to be addressed during planning, financing and implementation of the operation. 

The depth of environmental and social assessment will be appropriate to the nature and scale of the operation and commensurate with the level of environmental and social risks and impacts such operation generates including its area of influence.

Environmental and social standards

BSTDB seeks to apply good international environmental and social practices in all the operations it finances. By good practices, the Bank recognizes the World Bank (WB)/International Finance Corporation (IFC) Performance Standards, and Environmental, Health and Safety (EHS) Guidelines; the European Bank for Reconstruction and Development (EBRD) Performance Requirements; the European Principles on the Environment (EPE); the European Investment Bank (EIB) Environmental and Social Practices Handbook; the European Union (EU) environmental and social standards; the ILO CLS; the World Health Organization (WHO) standards; relevant IMO conventions; as well as relevant international conventions, such as, but not limited to, the Convention on the Protection of the Black Sea against Pollution; and the multilateral environmental agreements under the United Nations Economic Commission for Europe (UNECE), in particular the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (Aarhus Convention), and Convention on Environmental Impact Assessment in a Trans-boundary Context (Espoo Convention). 

In co-financed operations, the Bank accepts, for reasons of consistency and to avoid duplication, the environmental and social requirements of its partners if these are equivalent or superior, more developed or more stringent than its own requirements in this respect.

Environmental and social information disclosure

BSTDB discloses to the general and/or interested public relevant environmental and social information of its Category A operations. Such information may represent the Environmental and Social Impact Assessment (ESIA) reports prepared by or on behalf of the Client or the Bank, Non-technical Summaries (NTS) of ESIA, Environmental and Social Action Plans (ESAP), Stakeholder Engagement Plans (SEP), and any other relevant studies, reports and plans. For private sector operations this information is disclosed not later than thirty (30) calendar days before the Board of Directors approval, and sixty (60) calendar days for public sector operations. This information is disclosed on the Bank’s website and is open for public comments. However, this does not substitute for the Client’s obligation to identify stakeholders affected by or interested in the operation and to communicate with them in a meaningful way.

Environmental and social compliance requirements

All operations financed by BSTDB need to comply with the following minimum environmental and social requirements: 

• National and applicable EU environmental, labour, health and safety, and public information laws and regulations, including national commitments under international law;
• Availability of permits, approvals, licenses and certificates required under relevant laws and regulations. If these are not available at the time of BSTDB financing approval, the Client will need to submit a satisfactory plan for obtaining such permits, approvals, licenses and certificates;
• Category A operations need to meet the requirements applied by EU, namely the Environmental Impact Assessment (EIA) Directive and relevant sector-specific and cross-cutting Directives, or the requirements applied by WB/IFC. Category A operations that are likely to generate trans-boundary impacts need to meet the requirements stipulated under the Espoo and Aarhus Conventions irrespective of whether the country of operation is a party to the Convention;
• Do not involve production, use, distribution, trade, or businesses stipulated in the BSTDB Environmental and Social Exclusion List.

Supervision and monitoring

All the operations financed by the Bank are monitored against the agreed environmental and social compliance requirements in order to ensure that relevant environmental and social terms and conditions stipulated in the legal agreement are met, including implementation of the Environmental and Social Action Plan (ESAP). In addition to that, monitoring determines whether the prevention and mitigation measures employed to manage environmental and social risks and impacts are effective or need adjustments. 

Monitoring of environmental and social aspects is based on the information provided by the Client in the annual environmental and social performance report, and information collected during the site visits, which are mandatory for Category A and B+ operations, and on a need basis for Category B operations. In case of complex operations with high-risk environmental and social issues the Bank or the Client may retain third party independent monitoring consultants to monitor the implementation of such operations. 

Environmental and social monitoring is undertaken by Environmental and Social Sustainability Office (DES) of BSTDB and is part of a broader operation implementation and monitoring process directed by the Operation Implementation and Monitoring Department (DPM) of BSTDB.

International cooperation

BSTDB works with International and National institutions to pursue best practices in approaching environmental and social issues arising from its financing in its Member States. In co-financing with other IFIs, such as the World Bank Group, EBRD, EIB, NIB and ADB, as well as other European Development Banks and Agencies, BSTDB may follow environmental and social procedures and standards of the co-financiers if these meet its own environmental and social requirements or are higher than its own. The Bank supports all the international agreements related to sustainable development and is making its best efforts that these are followed in its financing activities. The Bank also participates in various thematic working groups on environment and social issues, such as the MFI Working Group on Environment and Social issues, the EDFI Working Group on Environment and Social matters, the BSEC Working Group on Environment, etc., in order to develop a common approach for environmental and social assessment process, including good practice standards, principles and products.