The Multilateral Cooperation Center for Development Finance (MCDF) hosted a roundtable discussion on 28 June at ADB Headquarters in Manila, Philippines, among MCDF’s Coordination Committee members and Environmental and Social Safeguard Community of Practice (E&S COP) members to consider approaches to enhance coordination among International Financial Institutions (IFIs) on environmental and social (E&S) standards.

The discussion centered on three initiatives: (i) “Shared Approach for Management of Environmental and Social Risks and Impacts for Pacific Island Countries,” a best-practice example from the Pacific Regional Infrastructure Facility (PRIF), which aims to standardize methods and procedures for addressing E&S issues while fostering stronger collaboration across participating development partners; (ii) “Efforts for Policy Harmonization” as the ultimate means of improving cross-IFI collaboration on E&S standards; and (iii) “Use of Development Partner E&S policies,” that contributed to improving the efficiency of coordination on E&S standards among IFI co-financing partners in jointly facing the challenges.

The World Bank staff underscored the uniqueness of the “Shared Approach,” illustrating its potential as a framework for development partners to standardize methods and procedures in addressing E&S issues and leverage country systems effectively in applying E&S requirements. Speakers from other IFIs highlighted the ongoing efforts towards policy harmonization: the Asian Infrastructure Investment Bank (AIIB) has taken innovative strides by including provisions in its E&S Framework (ESF) to use co-financing partner's E&S policies, while the Asian Development Bank (ADB) is revising its ESF to align with evolving considerations on E&S standards and practices. The African Development Bank (AfDB) recently updated its Integrated Safeguards System (ISS) to ensure greater harmony with other multilateral finance institutions.

The significant benefit of increasing coordination efficiency on E&S standards among IFI co-financing partners was well recognized, despite the legal complexities and differing regulatory and operational contexts, such as those faced by the International Finance Corporation (IFC) in risk-sharing and mobilization of additional finance. With a focus on the remaining challenges, the meeting underscored the necessity for operationally harmonized approaches while respecting the unique contexts and requirements of each IFI. A staff member from the Australian Department of Foreign Affairs and Trade (DFAT) emphasized the Shared Approach as a testament to this principle, noting the initiative's significance as an operationalized framework for navigating various development partner E&S policies.

In promoting sustainable high-quality infrastructure and connectivity investment, MCDF considers the adoption of IFI standards by New Partners including the emerging market financiers key, and is supporting E&S COP's initiatives through AIIB.