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Environmental and Social Safeguards

Environmental and Social Safeguards

  •  Date: 19 June 2006
Environmental assessment

Environmental protection and improvement, and benefits to people's welfare form key operational priorities for the European Investment Bank, the European Union's long-term lending institution. The EIB's environmental and social safeguard policies are based on the EU approach to environmental sustainability. The principles, practices and standards derived from these policies are highlighted in the Declaration on the European Principles for the Environment (EPE), agreed to by the EIB and four other European multilateral financing institutions[1] in May 2006.

The general approach of the Bank is described in a number of public documents:

Document Year Comment
European Principles for the Environment 2006 Launched in June 2006; key documents published on a dedicated website
Environmental Statement 2004 Next revision planned 2007
The EIB and its Contribution to Sustainable Development 2002 To be revised in the light of the current review of EU Sustainable Development Strategy
The EIB Project Cycle 2001

The EIB aims to maximise the environmental benefits and to minimise the environmental costs of the projects that it finances through appropriate screening, mitigation and compensation measures.

Environmental considerations are taken into account at all stages of the project cycle. In the case of co-financing with other institutions, the Bank may agree to apply the environmental standards of the co-financing institution, where these are comparable to EU standards, in the light of local conditions. However, the EIB will always carry out is own independent assessment.

The EIB's environmental safeguard measures include that:

  • the Bank's approach to financing projects is based on the precautionary principle, preventative action rather than curative treatment should be taken, environmental damage should be rectified at source and the polluter should pay, according to the Treaty Establishing the European Community
  • all projects financed by the Bank are the subject of an Environmental Assessment (EA), normally carried out by its own staff, but if by others according to the requirements of the Bank. For this purpose, projects are screened into four categories, based on the guidelines of the EU Environmental Impact Assessment (EIA) Directive:
    • Cat. A - those for which an EIA is mandatory (Annex 1 of the Directive);
    • Cat. B - those for which the competent authority determines the need for an EIA according to specified criteria (Annex II of the Directive, with ref. to Annex III);
    • Cat. C - for which a limited environmental assessment, if any, is required according to any likely adverse environmental impacts of the project (projects outside the scope of the Directive);
    • Cat. D - no environmental assessment required.
  • all projects financed by the Bank are also screened according to their potential impacts on sites of nature conservation. Where the impacts are expected to be significant, a special biodiversity assessment is carried out, according to the principles and practices of the EU Habitats Directive (ref. Art. 6 of the Directive)
  • Bank projects are assessed for their expected impacts in terms of greenhouse gas emissions; the scope for improvements in energy efficiency and the need for measures to adapt to climate change are also reviewed
  • the principles, recommended practices and standards of the EU Water Framework Directive and EU Waste Framework Directive are applied for projects financed by the Bank in the sectors of water and waste, respectively
  • according to the sector, projects should comply with the relevant standards laid down in EU law, for instance those of the Large Combustion Plant Directive in the power generation sector and the Integrated Prevention Pollution and Control Directive in the industry sector
  • the Bank is also guided by recognised good international practices, such as those laid down by the World Commission on Dams (WCD) and the Extractive Industry Review (EIR)
  • all projects financed by the Bank should comply with the requirements of relevant multilateral environmental agreements (MEA) to which the host country - and/or the EU in the case of a EU Member State - is a party, including the Montreal Protocol (on ozone depleting substances), the UN Convention on Climate Change and the Kyoto Protocol (on greenhouse gas emissions) and the Aarhus Convention (on environmental information).
Environmental resources

The main responsibility for scrutinising the environmental aspects of projects lies with the Bank's Projects Directorate, which has about 80 engineers and economists, all with adequate environmental skills, who undertake the environmental assessment of projects at the EIB. The project teams, made up of engineers, economists, financial experts and lawyers, have front-line responsibility for managing environmental issues. They bring together significant cross-sectoral and cross-regional resources, experience and professional knowledge.

However, environmental management is further reinforced by a number of dedicated support units to provide direction and advice on the Bank's environmental policy, ensure a consistently high quality of assessment, improve awareness and create stronger capacity for external dialogue with relevant third parties:

  • The Environmental Steering Committee (ENVSC) that advises on environmental policy development and environmentally complex projects. The committee comprises high-level staff members from the different Directorates within the Bank.
  • The Environmental Assessment Group (ENVAG) safeguards the application of the environmental policies and procedures of the Bank and examines each project. ENVAG has some 10 members (environmental experts from the principal sectors in which the Bank operates).
  • The Environment Unit (ENVU), in conjunction with ENVAG and ENVSC, develops policy, procedures and guidelines, provides training, disseminates information and works closely with the European Commission, especially DG ENV, other financial institutions and governmental and non-governmental organisations.
  • A Centre of Expertise for the Environment and Energy in the Directorate for Lending Operations in Europe aims to develop the environmental lending of the Bank through appropriate financing instruments and to reinforce the application of good environmental management practices to all financing activities in Europe. Similar arrangements exist in the Directorate for Lending Operations outside Europe.

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

Social issues

The EIB has taken social safeguard issues into account for many years as part of its overall environmental assessment of projects. Social issues are now also assessed in their own right, where necessary, as part of an integrated assessment. For projects mainly located outside Europe, internal guidelines are based on internationally accepted good practices, and in developing countries related to the Millennium Development Goals. They focus on labour standards, occupational and community health and safety (including major communicable diseases), population movement (including involuntary resettlement issues), minority rights (including indigenous people, women and vulnerable groups), public consultation and participation, and cultural heritage.

In large complex projects co-financed with other International Financing Institutions (IFIs), responsibilities for appropriate social assessment is often shared and the Bank may utilise other co-investors' existing social safeguard policy frameworks.


[1] The Council of Europe Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Nordic Environment Finance Corporation (NEFCO) and the Nordic Investment Bank (NIB).


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