Latin America and the Caribbean is a biodiversity superpower, with around 60% of the world’s terrestrial species found in the region. This abundant natural capital provides important benefits for human development and impacts on biodiversity can adversely affect the delivery of ecosystem services.
The Environmental and Social Performance Standard 6 (ESPS 6) of our new Environmental and Social Policy Framework (ESPF) recognizes that protecting and conserving biodiversity, maintaining ecosystem services, and sustainably managing living natural resources are fundamental to sustainable development.
It is important to remember that while farming, livestock, forestry, fisheries, and other utilization of living natural resources are key economic sectors in the region, they are also drivers of deforestation and other impacts to natural habitats, species, and ecosystem services. The key is finding the balance! The following series of questions and answers provide an in-depth understanding of how the ESPS 6 guides IDB borrowers to sustainably manage and mitigate impacts on biodiversity and ecosystem services throughout the project’s lifecycle, helping us improve lives while also protecting biodiversity, which is a win-win for all.
How will the IDB’s new standard on biodiversity conservation and sustainable management of living natural resources change how we and our borrowers work?
Our new standard on biodiversity provides much greater detail than our Directive B.9 and expands the scope beyond the focus on natural habitats. For example, ESPS 6 will require borrowers to consider how they depend upon ecosystem services as well as how they affect those used by others, something quite new for us. Also, it has some new requirements for projects that involve the production or use of living natural resources.
What do the terms “living natural resources” and “primary production” mean in the context of IDB operations?
Living natural resources is a broad concept that basically includes any sort of product derived from wild or domesticated plants and animals. This part of the standard applies to projects involving activities such as agriculture, biofuels, plantations, forestry, non-timber forest resources, livestock, aquaculture, or fisheries.
While primary production literally means the products of photosynthesis, in the context of this standard it refers to products or materials that are obtained from plants but also from animals that require plants as food. So, for example, a project that requires timber for construction or a school lunch project sourcing food from local producers would have to apply the standard.
What are the most important requirements for borrowers related to living natural resources?
I would say first that borrowers proposing to convert natural habitats in order to produce living natural resources will need to demonstrate that they have explored all options to find suitable areas of land that have already been cleared or are at least naturally not forested. Similarly, aquaculture projects should avoid impacts to potentially critical habitats such as mangroves, seagrass beds, and coral reefs. And perhaps most importantly, they will be required to achieve no net loss of biodiversity values whenever they convert or degrade natural habitats, and this may require biodiversity offsetting.
In regards to “credible globally, regionally, or nationally recognized standards for sustainable management of living natural resources”, how would you go about identifying the right standard in the context of a specific project or program?
This can be challenging since there are literally hundreds of different sustainability standards out there. But, there are plenty of good websites that provide and compare options. The borrower should remember that a good standard will be based on credible, realistic, science-based principles and criteria, informed by consultation with relevant stakeholders, allow producers to gradually implement the standard and improve performance, and be subject to independent verification.
What is an example of a standard that might apply to a rural development project that is going to source lumber as part of general construction materials?
The Forestry Sustainability Council’s International Standard provides very useful principles and criteria that can be applied to evaluate the practices of potential suppliers for a specific project.
What about projects involving livestock? How would you identify the right animal welfare standard?
There are comparisons of different animal welfare standards in websites such as CertifiedHumane.org and AWIonline.org from the Animal Welfare Institute. Borrowers can look at these and compare various standards and find one that best fits their situation.
If a project involves small-scale, traditional, or indigenous producers, can we really ask that these more artisanal vendors apply the same standards as a large agribusiness?
The same general standards apply, but we would not expect small producers to apply them in the same way as large agro-industrial companies. What we will require is that that borrower includes actions to help the beneficiaries enhance the sustainability of their management practices, applying the applicable elements of sector-specific voluntary sustainability standards. It will be the borrower who is responsible for designing and implementing these actions and for ensuring the project itself complies with the sustainability criteria.
The IDB has many projects where the objective of the operation is to increase the competitiveness, productivity, production, or market access of living natural resources. How should we approach these projects to ensure compliance with Standard 6?
These types of projects might not directly finance productive activities, but they can have significant indirect impacts by increasing real or perceived demands for agricultural products or commodities, which can lead producers to expand into natural habitats. Transportation products designed to reduce costs of bringing products to markets can have similar effects if producers anticipate increased demand. The borrower’s environmental and social risks and impacts identification process will need to consider the potential for these indirect impacts and the project design should consider the inclusion of a component to enhance adoption of relevant sustainability standards by local producers, as well as planning the development of new production so that impacts to natural or critical habitats are avoided and minimized.
This blog post is part of a series about the IDB‘s new Environmental and Social Policy Framework (ESPF). You may also want to read: