In November 2025, a group of 17 CSOs submitted a series of recommendations to strengthen IFC Performance Standard 1 (PS1): Assessment and Management of Environmental and Social Risks and Impacts, based on years of experience supporting communities affected by IFC-financed projects. The recommendations, accompanied by case studies, aim to close policy gaps and align IFC practices with international best standards on environmental protection, human rights, and accountability.

You can read the full submission here.

1. Stronger Environmental and Social Risk Assessments

CSOs recommend expanding the scope of risk assessments so projects consider:

  • Cumulative impacts from multiple projects over time.

  • Full value chains (upstream and downstream activities).

  • Associated facilities necessary for a project to function.

  • Global environmental impacts, including greenhouse gas emissions and alignment with the Paris Agreement 1.5°C target.

  • Risk assessments should also include disaggregated data and explicitly evaluate impacts on marginalized or vulnerable groups, including women and LGBTQI+ communities.

2. Integrating Remedy into IFC Policies

CSOs call for explicit integration of the Remedial Action Framework into PS1. Key proposals include:

  • Ensuring projects provide remedy when harm occurs, not only compensation or mitigation.

  • Requiring contingency funds (e.g., at least 1% of project costs) for remediation.

  • Making a company’s failure to remedy harm grounds for losing access to future IFC financing.

  • Creating a public debarment list for companies repeatedly violating environmental, social, or human rights standards.

3. Responsible Exit from Harmful Projects

The revised framework should incorporate IFC’s Responsible Exit principles, ensuring that when IFC withdraws from a project it:

  • Prevents or minimizes environmental and social harm.

  • Ensures affected communities are not left without remedies.

4. Preventing Reprisals Against Communities

CSOs emphasize stronger protections for environmental and human rights defenders, including:

  • Explicit zero tolerance for reprisals against communities raising concerns.

  • Risk screening for intimidation or retaliation during project consultations.

  • Penalties for clients that fail to protect affected stakeholders.

5. Contextual Risk Assessments

Projects should evaluate external contextual risks that may affect project outcomes, and update these assessments such throughout the project lifecycle. In particular, they should look at elements such as:

  • Conflict, weak governance, or regulatory gaps

  • Discrimination or labor rights violations

  • Land disputes and displacement

  • Political or security risks

6. Human Rights Due Diligence

CSOs recommend stronger requirements for human rights impact assessments, referencing international standards such as the United Nations Guiding Principles on Business and Human Rights. Companies should identify potential human rights impacts early and ensure projects respect rights throughout operations.

7. Financial Intermediary Oversight

Because more than half of IFC’s portfolio is invested through financial intermediaries (banks and funds), CSOs call for:

  • Greater transparency about subprojects financed through intermediaries.

  • Disclosure of IFC involvement and grievance mechanisms at project sites.

  • Stronger monitoring of intermediary environmental and social management systems.

8. Monitoring, Enforcement, and Accountability

Recommendations include:

  • Making environmental and social commitments legally binding.

  • Increasing independent audits and monitoring of high-risk projects.

  • Allowing community monitoring reports to be included in IFC supervision.

  • Publishing monitoring results and audit summaries publicly.

9. Stronger Stakeholder Engagement

CSOs propose creating a standalone standard on stakeholder engagement to ensure:

  • Communities are treated as rights-holders, not just stakeholders.

  • Meaningful consultation and informed participation throughout the project lifecycle.

  • Access to independent legal and technical support for affected communities.

10. Improved Grievance Mechanisms

To ensure effective accountability:

  • Project-level grievance mechanisms must be accessible, transparent, and timely.

  • Communities must be informed about the IFC’s independent accountability mechanism, the Compliance Advisor Ombudsman (CAO).

  • Mechanisms should follow effectiveness standards from the UN Guiding Principles on Business and Human Rights.

 

Check out the full submission here.