This website provides practical knowledge and tools focusing on social, environmental and economic development issues for companies, civil society, local and regional governments.
Supply chain sustainability is a topic of growing importance to businesses, governments and civil society partly because the scale, scope and severity of global economic, political, social and environmental challenges requires a coordinated response from all sectors of society. Companies have significant financial, technical, organisational and intellectual resources they can contribute to solving these sustainability challenges. They also have a critical role to play by developing and improving their policies and practices, in order to manage effectively the social, environmental and economic impacts of their supply chains. How exactly to do this is not always obvious for companies, so this Quick Self-Assessment and Learning Tool is designed to help determine the appropriate scope of their supply chain sustainability programmes.
The objective of the Tool is to quantify the value that is created for the company’s operation through sustainability investments and the value that is protected through better risk mitigation. To achieve this objective, a company works through a tested process that enables it to convene managers across operational units and enter agreed upon data into the FV software to yield the NPV output. This User Guide emphasizes how to use the software, but there are critical steps in the process that will also be highlighted to help implement the FV approach.
The Sustainability Program Quality Benchmark Matrix (Benchmark Matrix) provides characteristics of ineffective to best practices for the most common sustainability programs (“the what”) and management processes (“the how”). These programs were selected based on literature review and overview of most common social, economic and environmental programs of leading oil, gas and mining companies. Then, to make the Matrix broadly applicable, we selected issues that would be relevant to many high footprint infrastructure projects. The list of programs in the Matrix will grow over time to include issues relevant to other high impact industries like forestry and agribusiness.
Click on the link to download the FV tool sofware
All sustainability investments are not created equal. Some generate positive development outcomes, and others either do not or even decrease trust and intensify tensions with affected communities. Some engage communities in design and implementation, others choose a much more top-down approach. Some mitigate risk, others have little impact on risks or even generate more risk for companies. It is clear that the quality of a sustainability investment determines whether risks and opportunities are maximized or minimized. As such, quality needs to be accurately assessed as an input into financial valuation. As the old saying goes: garbage in, garbage out. Accurate assessment of the quality of programs is critical for pinpointing the range of value generated by ESG investments. In order to remove the subjectivity of rating the effectiveness of sustainability investments, together with the International Council on Mining and Metals (ICMM) and with feedback from its member mining companies, we have developed a stand-alone tool for assessing the quality of a company’s portfolio of sustainability investments: the Sustainability Program Quality Framework (Quality Framework). The framework includes a Self-Assessment Tool, which generates a numerical score ranging from 1 (ineffective) to 4 (excellent), and a Quality Benchmark Matrix, which maps scores to practices characterized at each scoring level. The score can be inputted into the Financial Valuation Tool’s quality ranking sections.
A lack of hard financial data on the return from sustainability investments has made it difficult for companies to assess their business benefits, and hence to justify sustainability budgets that compete with other corporate priorities. The ability to calculate only the costs, and not the financial benefits, has biased the assessment of such investments as pure expense. This traditionally leaves sustainability initiatives outside the core project and operation planning process, impeding cross-functional alignment and preventing the setting of shared operational goals or communication of the holistic value of such initiatives. The exclusion of sustainability issues and spending from financial modeling may be a reason why so many projects are over budget and over time . Sound valuation can strengthen the business case for community investment, enhance local development outcomes through improved rigor of investments, help secure on-going support from management and shareholders, and convey signals to the market about the value generated from effective environmental and social risk management.
While the promise is still far greater than the reality, strategies and programs built on the positive impact on development from private-sector initiatives in frontier and emerging markets are gaining acceptance and driving change in corporate boardrooms and NGO projects. This report examines why and how the private sector, nongovernmental development actors, and the U.S. government, particularly USAID, can employ policies and practices to expand local content in order to drive economic development and create economic opportunities. The authors highlight the development benefits of a local-content strategy while recognizing the commercial benefits of such a strategy accruing to large participating companies. They use case studies from three very different business sectors—extraction (oil and gas), tourism, and agriculture—to identify existing successes and challenges. And finally they provide recommendations for those businesses and government agencies as well as host governments working on local-content development.
June 8, 2012
At the '3rd International Congress on Water Management in the Mining Industry - Water in Mining 2012', Chile, ICMM's Gemma James presented ICMM's newest publication: 'Water management in mining: a selection of case studies' which illustrates some of the innovative ways the industry has responded to water challenges in different contexts. The mining industry has developed innovative ways to respond to water challenges in different contexts. ICMM presents this collection of case studies to illustrate examples of good water management which provide a snapshot of the leadership approaches in the industry.
Companies around the world engage in community investment efforts as a way to promote development and benefit local stakeholders in their areas of operation. Done well, community investment can help establish mutually beneficial relationships between a company and its local stakeholders, contribute toward long-term improvements in the quality of life for local communities, and help create an environment conducive to private investment. In response to some of these challenges, IFC has produced the Strategic Community Investment Handbook and a set of tools to help companies implement community investments in a strategic manner. All of the tools here can be found in the Handbook, but they are also made accessible on this web page as separate files for the ease of use and download. Companies are encouraged to use these tools as guidance instruments and where required customize to better suit unique contexts.
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The 2030 Water Resources Group came together in 2008 to contribute to finding solutions to this challenge. The Group is co-led by the International Finance Corporation and McKinsey & Company, and comprises a business consortium made up of Barilla, The Coca-Cola Company, Nestlé, New Holland Agriculture, SABMiller plc, Syngenta AG, and Standard Chartered Bank. The effort has relied on the expert input of a range of leading scientific, multinational, and nonprofit institutions.