- Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank (ADB) was established to promote economic development and resilience of the financial markets in ASEAN+3 countries through a sustained development of deep and liquid local currency and regional bond markets. This Environmental and Social Safeguards Policy (the “Policy”) has been drafted to ensure that CGIF achieves this objective while promoting environmental and social sustainability of the activities financed with the support of CGIF’s guarantees. The objective of the Policy is to comply in all respects with (i) the requirements for Financial Intermediaries2 as detailed in Safeguard Requirements 4 of ADB’s Safeguard Policy Statement 2009, as updated (SPS); and (ii) requirements for the protection of the environment and of Indigenous Peoples, and the sustainable management of involuntary resettlement contained within ADB’s Safeguard Requirements 1-3 as applicable, and this Policy shall be understood and applied accordingly. 3
- Pursuant to the Policy, CGIF will establish and implement comprehensive internal procedures for reviewing, assessing, monitoring, and implementing transactions supporting corporate financing, to ensure compliance with the Policy (the “Environmental and Social Safeguards Framework” or “the Framework”). The Framework requires environmental and social screening, categorization and due diligence procedures, and monitoring processes throughout the life of a transaction in conformity with the principles and requirements embodied in the Policy. CGIF will work with its prospective guaranteed bond issuers (the “Prospective Issuers”) and its outstanding guaranteed bond issuers (the “Outstanding Issuers”) to ensure and enhance effective management of environmental and social risks by:
- ensuring that the Policy is complied with for all guarantees issued;
- guaranteeing bonds for projects only when the projects are required to be designed, constructed, operated, and maintained in a manner consistent with the Policy;
- guaranteeing corporate bonds only when the Prospective Issuer is required to implement an environmental and social management system consistent with the Policy;
- requiring environmental and social risk identification and management to be integrated into the Outstanding Issuers’ internal risk analysis;
- actively encouraging and requiring Prospective Issuers and Outstanding Issuers (together, the “Issuers”) to adhere to the Policy;
- ensuring appropriate consultation and disclosure, as applicable, with stakeholders for all bond guarantees; and
- promoting bond issuers that provide environmental and social benefits.
- The Policy and its associated Framework apply to all Outstanding Issuers and Prospective Issuers. CGIF will not issue a guarantee unless the Prospective Issuer has agreed to comply with the Policy and the host country’s social and environmental laws and regulations, including international laws adopted/ratified by the host country. In addition, CGIF will not issue a guarantee if the Prospective Issuer’s activities which are to be financed by the bond are included in ADB’s Prohibited Investment Activities List in its most recent version (“PIAL”).
1This Policy and the Framework apply to all CGIF bond guarantees for which application is made after 1 January 2019. The revised Environmental and Social Safeguards Policy and Framework was endorsed by CGIF’s Board as advised in CGIF’s CEO announcement dated 30 November 2018 and available at www.cgif-abmi.org. Updates to the Policy and Framework may be required from time to time and will be released on CGIFs website promptly following such updates.
2CGIF was established as a Financial Intermediary of ADB as detailed in the Report and Recommendation of the President dated March 2010 and available at https://www.adb.org/projects/44908-014/main#project-pds.
3This Policy will be updated as appropriate, if SPS is updated or if at any time it becomes apparent, as a result of any omission in the Policy, that the Policy does not meet the stated objective.