Real-life cases showing how projects deemed 'good' or strategically important and exempted from E&S safeguards can generate adverse impacts, undermining development and sustainability goals.
The assumption that projects designed to deliver positive development outcomes, such as clean energy or financial inclusion, are inherently beneficial and therefore pose limited environmental and social (E&S) risks, can lead to overlooking risks that may ultimately undermine the very outcomes these projects seek to achieve..These risks are compounded by institutional pressures to increase lending volumes, which can contribute to a culture where projects are seen primarily as financial transactions, rather than as interventions with complex development implications.
Well-intentioned development initiatives can generate unintended adverse impacts when E&S risks are insufficiently assessed and addressed. These cases reflect a broader tendency, evident in national contexts, to exempt projects deemed strategically important from environmental and social assessment processes, particularly amid current economic uncertainties.
The presentation challenges the assumption that anticipated economic and development benefits justify proceeding without taking into account potential E&S costs. It highlights the importance of understanding the nature and distribution of these costs, including who bears them, and of applying robust safeguards regardless of a project’s intended benefits. Ultimately, it argues that safeguarding development outcomes requires institutions to confront the risks inherent in even the most well-intentioned initiatives, rather than allowing the perceived goodness or importance of a project to become a reason for overlooking the need for improvement.
Janine Ferretti, Compliance Advisor Ombudsman, WBG, 2021-2026; Professor of Practice, Boston University, 2019-2021; Head of ESG, IDB 2003-2019, ED, NAFTA Environment Commission, 1994-2003.