Background on EDC’s review of the Environmental and Social Risk Management policy framework and new Human Rights Policy:
In February, Export Development Canada’s (EDC) Board of Directors approved the new Human Rights Policy, Environmental and Social Review Directive, and Environmental and Social Risk Management Policy. All three result from the ongoing review of the Environmental and Social Risk Management (ESRM) policy framework launched in early 2018. A Public Response Paper was developed to summarizes the feedback we received from our stakeholders during the review process and includes EDC’s response. EDC revealed its new Climate Change Policy in January.
This framework is regularly reviewed to ensure it remains relevant, rigorous and reflects industry best practices. Stakeholder consultation and engagement is an important aspect of these reviews, which also consider changes to EDC’s international obligations such as the Organization for Economic Cooperation and Development (OECD’s) Common Approaches on Environmental and Social Due Diligence and the Equator Principles.
EDC began the ongoing review of its ESRM policy framework in early 2018.
The policies included in the review are:
- Environmental and Social Risk Management Policy
- Climate Change Policy
- Environmental and Social Review Directive
- Human Rights Statement
- Disclosure Policy
The first four are now complete and the Disclosure Policy review is still underway.
For the review of the framework, submissions from interested parties were accepted until September 7, 2018. A chart summarizing feedback received regarding the above policies is available on the EDC site, and the organization remains open to ongoing feedback.
Further info on the new Human Rights Policy:
- EDC has been working to align its environmental and social due diligence to the United Nations Guiding Principles on Business and Human Rights (UNGPs) and to understand and manage its human rights risks more actively. This review represented an opportunity to ensure our publicly stated policy commitments reflect our current practices.
- The core of this new policy is about EDC’s due diligence, the process during which the organization will be able to identify and manage human rights related risks related to transactions EDC undertakes.
- Through this policy, EDC commits to:
- Respecting human rights and aligning practices with the corporate responsibility expectations of the UNGPs.
- Conducting transaction-related human rights due diligence taking a risk-based approach.
- Using its leverage to influence customers’ practice and enable remediation for human rights impacts.
- Communicating with stakeholders in good faith.
- Tracking and reporting human rights procedures, practices and performance.
- Using its influence to encourage stronger human rights practices from peers and customers.
- The UNGPs are the authoritative global standard on business and human rights, and are being increasingly integrated into international frameworks to which EDC is subject, such as the OECD’s Common Approaches and the Equator Principles.
- EDC’s considers vulnerable peoples as part of its due diligence, defined as those peoples who are entitled to specific protection under international laws including, for example, women, children, religious or ethnic minorities and indigenous peoples, as well as those peoples recognized in practice as being more likely to suffer severe impacts in certain contexts, such as human rights defenders, members of the LGBTQ community, migrant workers or artisanal miners.
- EDC has developed an implementation plan for the Human Rights Policy to provide details on the human rights risk management measures it currently has in place, and outline the key areas it will focus on to implement the commitments in the policy. The implementation plan will be publicly available.
- The policy will undergo a review every three years, though there are processes in place in the event adjustments are needed in the interim.
Further info on the Environmental and Social Risk Management Policy
The Environmental and Social Risk Management Policy is the overarching policy document of EDC’s ESRM policy framework. As such, it outlines EDC’s general commitments and approach to environmental and social risk management and articulates the relationship between this policy and the other elements of the framework.
As part of the current review, the Environmental and Social Risk Management Policy was updated to:
- Transfer climate change and human rights policy commitments to separate stand-alone policy documents;
- Remove procedural elements to a separate public-facing document; and
- Refresh the policy to align it with EDC’s current practices and EDC’s enterprise risk management framework.
Further info on the Environmental and Social Review Directive
EDC’s Environmental and Social Review Directive (ESRD)—a requirement of the federal Export Development Act—sets out how EDC determines what type of transaction is considered related to a project and, if it is a project-related transaction, the nature of and approach for the environmental and social review.
As a result of the current review, EDC simplified the scope of application of the ESRD to ensure clarity and consistency in the application of the directive, in particular as it pertains to project-related corporate loans. These changes are in response to feedback received from our stakeholders and allow EDC to further align its approach to project review with the most recent versions of the OECD Common Approaches and the Equator Principles, which have themselves undergone updates since the last time EDC reviewed the ESRD.