Environmental and Social Performance

MCC works with partner countries to integrate internationally-accepted principles of environmental and social sustainability into the design and implementation of compacts.

MCC recognizes that the pursuit of sustainable economic growth and a healthy environment are related. Economic growth that doesn’t adequately address the associated risks of environmental degradation can leave the poor particularly vulnerable.

In collaboration with MCC, partner countries are striving to achieve sustainable economic development through their compact-funded activities while at the same time minimizing environmental and social risks and enhancing natural resource protections.

In Practice

MCC recently amended its Environmental Guidelines to formally adopt the International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability (Performance Standards, or PS) as part of continuing efforts to enhance the sustainability and effectiveness of MCC compacts and improve our standards for managing environmental and social risks.

The Performance Standards provide a comprehensive and internationally-accepted set of environmental and social standards. IFC provides a set of eight Guidance Notes that correspond to each Performance Standard. While MCC has not adopted the Guidance Notes as official policy, they provide useful information on the requirements contained in the Performance Standards and on good sustainability practices that will help partner countries improve project performance and outcomes. MCC may provide additional guidance or explanation to our partners as appropriate and as needed to explain MCC-specific processes or approaches.

Core Principles

We recognize that our partner countries have primary responsibility for assessing and managing the environmental and social implications of MCC-funded projects but will provide appropriate guidance, tools and assistance and, where necessary, help strengthen institutional capacity and policies to ensure this responsibility is carried out effectively and in accordance with MCC requirements.

We recognize that people’s livelihoods and well-being depend on reliable and equitable access to natural resources and will help partner countries strengthen their capacity to preserve and enhance ecosystem functions and natural wealth that are vital to achieving long-term poverty reduction and development outcomes, and help communities build resilience to environmental stressors such as climate change, water scarcity and natural disasters.

We are committed to working with partner countries and within country systems to improve the environmental and social performance of compact activities and to effectively manage risks to improve project outcomes and delivery of project benefits. Among other ways, this is achieved by incorporating cost-effective, technically and economically viable, measures into projects that can promote energy efficiency, improve water resource management, support less carbon intensive land use practices, improve institutional capacity for environmental management, and help protect worker and public health and safety.

We strive to foster a shared commitment to these goals and the fundamental principles of sustainable development through early, consistent and constructive engagement with country counterparts and other stakeholders and by supporting compacts that address long-term environmental, social and development priorities of the partner country and the region.