Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental , and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles

Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental , and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles

• Reference Number: 4.9
• Related Status: Reported
• GRI Status: Core GRI Indicator

The process regarding the decision to grant finance is as follows:
1. Upon the request of a project promoter who is interested in EIB financing, the EIB services review the merits and chances of success of the project. In particular, the EIB services address the following questions:
- How does the project fit within the policies defined or supported by the European Union?
- What is the contribution of the project to the economy and to society as a whole?
- Is the project sustainable from an economic, financial, environmental, social and technical point of view?
- How would the project benefit from the EIB’s involvement? The benefits can be financial or otherwise.
- Is the risk level of the operation acceptable to the EIB?
- Are the contractual conditions proposed by the EIB acceptable to the beneficiary of the loan or the investment?
2. On this basis, the EIB services report to the Management Committee.
3. The Management Committee then presents the operation to the Board of Directors for approval. If the EU Commission is against a proposed operation, then the unanimity of the remaining Board members is required to approve the operation. The EU country in which the project is located can also veto the Bank’s financing, irrespective of the opinion of the Commission and the other Member States. This, of course, is an extremely rare event.
All projects submitted to the Board for financing are subject to appraisal to ensure their compliance with relevant EIB policies which, in aggregate, are designed to ensure the long-term sustainability of investments made. Economic analysis is an essential screening tool for all potentially eligible projects. In this way the Bank aims to ensure that all projects it supports are economically sound.  It has developed a screening tool, the value added method, for which the COP includes monitoring targets. Wherever possible,  it takes into account external factors alongside other economic costs/benefits in its quantitative cost benefit analysis in line with international good practice and as recommended by the European Commission. By including, where significant, carbon footprint calculations in the economic analysis for projects, the Bank aims to include the cost of CO2 emissions in its due diligence assessment. This takes into account the project’s consistency with EU objectives as well as its specific economic, environmental, and technical merits. The Bank confirms that the proposed project accords with its Statement on Environmental & Social Principles and Standards which, inter alia, requires compliance with the Habitats and Birds Directives as well as, where a project is part of a programme, the Strategic Environmental Assessment (SEA) Directive.

The EIB's governing boards are charged with overseeing the mandate to support sustainable development. 

Within our Projects Directorate the responsibility for environmental and social issues lies with the Environmental and Social Office (ECSO). ECSO's core internal, horizontal Bank functions are to ensure information dissemination, training and the development and monitoring of the application of sustainable development policies and procedures; externally, it constitutes a centre of information and knowledge - and exchanges - on general sustainable development and environmental issues and policy development (in particular those of the Commission and relevant international organisations).

ECSO is part of a wider environmental organisation throughout the Bank, including an Environmental Assessment Group (ENVAG), a permanent expert group drawn from the Projects Directorate. This permanent expert group ensures the quality and consistency of the environmental assessment throughout the project cycle. ENVAG is responsible for safeguarding the application of the Bank’s environmental policies and procedures throughout the project appraisal cycle, including verifying the environmental risks and issues identified in the Projects Directorate’s opinion for appraisal authorisation. An ENVAG member, as distinct from the project team, which remains responsible for environmental work on a specific project, is designated at the attribution stage to ensure proper follow up.

The Environmental Assessment Group (ENVAG):
• is a permanent group of experts within the Projects Directorate (PJ)
• comprises senior engineers and economists specialised in the sectors of transport and other infrastructure, energy, telecommunications, waste management, industry and services, mining and health. High level representatives from other directorates are also invited to participate in the meetings, as well as all members of ESO
• is responsible for helping ESO to develop and promote the application of the Bank's environmental policies and procedures throughout the project cycle
• provides a source of advice on specific environmental matters in PJ
• reviews the environmental aspects of PJ reports
• provides a platform for technical discussion and debate
• gives advice on training and awareness-raising needs in environmental, legal and biodiversity issues
• has an ENVAG member assigned to each EIB project that is appraised by PJ (as distinct from the normal project team, which remains responsible for environmental work on a specific project). He/she supports the environmental assessment carried out by members of the project team and provides a quality control function.

An Environmental Steering Committee (ENVSC), made up of senior officials from the different directorates within the Bank, is responsible for addressing strategic environmental issues, including the types of project that may raise particular environmental difficulties.

A Centre of Expertise for the Environment and Energy in the Directorate for Lending Operations in Europe develops appropriate financing facilities for environmental lending and reinforces the application of good environmental management practices to all financing activities in Europe. Similar arrangements exist in the Directorate for Lending Operations outside Europe.

In addition, the Bank has two working groups that are dedicated to the EIB’s environmental and social performance in its projects. They are chaired by the Head of ECSO and their responsibilities are described below:
1. The Social Working Group  (SWG):
o provides advice to ESO on strategic issues regarding social development policy advancement
o provides a platform for technical discussion and debate
o gives advice on training and awareness-raising needs in the social assessment of projects
2. The Climate Working Group  (CWG):
o provides advice on ways and tools to efficiently integrate mitigation and adaptation, footprint and climate risk management issues into the EIB's projects
o assists in building a climate change strategy
o helps with providing technical assistance facilities to some projects
o provides a platform for technical discussion and debate
o gives advice on training and awareness-raising needs in specific climate-related issues in the assessment of projects

The Bank also maintains an extensive professional training and awareness-building programme on environmental and social issues for its staff.

Additionally, the ex post evaluation service of the Bank verifies for each project evaluated that implementation was carried out as expected, whether unexpected negative effects appeared and, if so, that all necessary measures to mitigate them were implemented.