Environmental and Social Risks Assessment

In pursuance of the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (UNECE), JSB UKRGASBANK discloses information on its environmental impact, thus demonstrating its commitment to sustainable development.

Bank has its own Policy on Environmental & Social Responsibility. In accordance with its internal regulations, the Bank assesses, monitors and reports on the environmental and social risks of the financed projects.

All projects financed by the Bank are subject to proper verification and assessment of compliance with the social and environmental requirements of the Bank’s environmental and social policies.

The projects financed by the Bank are developed and implemented in accordance with the best Ukrainian and international practices. In order to help clients and their projects achieve a high performance level, the Bank is guided by the principles of sustainable development and the IFC Performance Standards on Environmental and Social Sustainability.

  1. Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
  2. Performance Standard 2: Labor and Working Conditions
  3. Performance Standard 3: Resource Efficiency and Pollution Prevention
  4. Performance Standard 4: Community Health, Safety, and Security
  5. Performance Standard 5: Land Acquisition and Involuntary Resettlement
  6. Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
  7. Performance Standard 7: Indigenous Peoples
  8. Performance Standard 8: Cultural Heritage

Alternative energy and energy efficiency projects, as well as other projects worth more than the equivalent of $2 million, are assessed for environmental and social risks in accordance with the requirements of the Bank’s environmental and social policies.

During the assessment, the Bank takes into account the size of the project, its location and the potential environmental and social consequences of implementation. If the socio-environmental assessment finds that the potential loan project does not meet or does not fully comply with the requirements, the Bank develops and coordinates with the client an Environmental and Social Action Plan in order to achieve an appropriate level of the project within a certain timeframe.

Also, in case of occurrence of significant legislative deviations in social and/ or environmental aspects of the project, suspensive conditions of crediting are established, only after elimination of which the Bank will issue a loan to the Borrower’s project.

Risk categorization

Environmental and social risk category - A, B and C – depicts the presence of potential impacts associated with the project, and defines the extent of environmental and social risk assessment, information disclosure and the degree of stakeholders engagement.

Category A: Projects that have potentially significant environmental and social impacts & require a detailed assessment process.

Category B: Projects that have moderate environmental and social impacts that can be assessed and managed.

Category C: Projects that will lead to minor or positive environmental or social impacts.

The Bank evaluates and establishes the appropriate risk indicators at the beginning of the project and applies monitoring system throughout the entire loan lifecycle of the project to ensure compliance with all relevant requirements.

The abovementioned project evaluation criteria are regularly reviewed, which ensures their compliance with the best international practices and principles of sustainable development, as well as the requirements of investors in the green investment market.

The main categories of environmental projects:

  • Solar power plants
  • Wind power stations
  • Hydroelectric power plants
  • Power plants on biomass
  • Energy efficiency projects
  • Biogas / degasation of landfills
  • Transport

Internal environmental and social assessment also envisages the use of additional objective and transparent criteria based on the principles of tracking and exclusion of certain types of economic activity from crediting (Exclusion List).

Types of Economic Activity Excluded from Provision of Credits by the Bank

The list of exclusions includes the types of economic activity for which the Bank does not grant credits, namely:

  • production or trade in any product or activity deemed illegal in accordance with international conventions and agreements or subject to international prohibitions;
  • production or trade in of products containing polychlorinated biphenols (PCBs);
  • production and trade in pharmaceutical products, pesticides / herbicides and other harmful substances to be withdrawn from international circulation or subject to international prohibitions;
  • production or trade in ozone-depleting substances to be withdrawn from international circulation;
  • production or trade in radioactive materials (including storage and processing of radioactive waste);
  • activities related to nuclear industry or nuclear materials;
  • transportation of oil and other hazardous substances in tankers that do not meet the requirements of the International Maritime Organization (IMO);
  • production or trade in weapons (including hunting) and ammunition;production or trade in alcoholic beverages (other than beer and wine);
  • production or trade of tobacco products;
  • gambling (including online), casinos and similar activities;
  • production or trade in unbound asbestos fibers;
  • drift net fishing in the marine environment using nets in excess of 2.5 km in length;
  • trade in species of wild fauna and flora or products from species of wild flora and fauna regulated under CITES;
  • production or trade in timber or other forestry products, other than managed forests;
  • production, trade, storage or transportation of large volumes of hazardous chemicals or use of hazardous chemicals on a commercial scale;
  • hydropower plants with installed capacity more than 15 MWp;
  • financing of economic activities related to the coal sector, including coal mining, coal transportation, infrastructure services intended solely to support any of these activities.
In addition to the exclusions to financing listed above, for environmental and social reasons the Bank does not finance:
  • production or activities on land used to maintain means of subsistence for vulnerable groups (e.g., in heads of rivers used for fishing and / or water supply, on land for grazing, hunting, hayfields, etc.);
  • production or activity that may result in forced resettlement;
  • production or activity with a risk of negative impact on indigenous peoples / minorities;
  • production or activity related to harmful or exploitative forms of forced labor / harmful child labor;
  • production or activities that may have significant insurmountable risks that cannot be avoided or mitigated or have a significant adverse impact on the environment, health and safety, biodiversity, cultural and archaeological heritage.

The Bank makes every effort for transparent and responsible activities in all sectors of the economy at various stages of project development. JSB “UKRGASBANK” carefully evaluates and controls all projects according to strict criteria to ensure compliance with the legislation of Ukraine and the best international practices for environmental protection and resource efficiency.

JSB "UKRGASBANK" fully supports Sustainable Development Goals.

Questions, complaints and suggestions on environmental or social issues can be sent to grievances@ukrgasbank.com

More information about the achievements of the Bank in the development of the concept of sustainable development can be found in the Report , prepared under the standard of the Global Reporting Initiative.