{"id":3829,"date":"2025-09-26T09:30:31","date_gmt":"2025-09-26T06:30:31","guid":{"rendered":"https:\/\/dge.ee\/?page_id=3829"},"modified":"2025-09-26T09:30:31","modified_gmt":"2025-09-26T06:30:31","slug":"lenders-environmental-social-due-diligence","status":"publish","type":"page","link":"https:\/\/dge.ee\/en\/services\/industry-impact\/lenders-environmental-social-due-diligence\/","title":{"rendered":"Lenders\u2019 Environmental &#038; Social Due Diligence"},"content":{"rendered":"<div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container gradient-container-1 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;\" ><div class=\"fusion-builder-row fusion-row fusion-flex-align-items-flex-start fusion-flex-content-wrap\" style=\"max-width:1404px;margin-left: calc(-4% \/ 2 );margin-right: calc(-4% \/ 2 );\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_3_4 3_4 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:75%;--awb-margin-top-large:0px;--awb-spacing-right-large:3.84%;--awb-margin-bottom-large:0px;--awb-spacing-left-large:2.56%;--awb-width-medium:75%;--awb-spacing-right-medium:3.84%;--awb-spacing-left-medium:2.56%;--awb-width-small:100%;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-flex-justify-content-flex-start fusion-content-layout-column\"><div class=\"fusion-text fusion-text-1\"><p><strong>Lenders\u2019 Environmental & Social Due Diligence <\/strong><\/p>\n<p>As the number and scale of clean\u2011energy projects continue to grow, so do the financing needs of project owners and developers. While traditional financial metrics remain important for securing loans and other forms of financing, lenders and private banks are increasingly focused on the overall sustainability of their investments.<\/p>\n<p>Consequently, many financing institutions require an environmental and social due\u2011diligence (ESDD) process that follows a specific set of standards. The exact standards applied vary by lender, but common requirements and guidelines include:<\/p>\n<ul>\n<li>International Finance Corporation (IFC) Performance Standards<\/li>\n<li>Equator Principles<\/li>\n<li>World Bank Environmental and Social Framework<\/li>\n<li>World Bank Group Environmental, Health and Safety Guidelines: general and industry \/ sector specific<\/li>\n<li>European Investment Bank\u2019s Environmental and Social Standards<\/li>\n<li>EBRD Environmental and Social Policy<\/li>\n<li>Asian Development Bank\u2019s Environmental and Social Standards<\/li>\n<li>ILO Conventions and Core Labour Standards<\/li>\n<\/ul>\n<\/div><div class=\"fusion-text fusion-text-2\"><p>Both financiers and borrowers conduct ESDD assessments to ensure projects adhere to industry best practices and meet the required standards. Risk assessment during this process is multi\u2011faceted and demands a deep understanding of the most material risks in each sector. Therefore, the evaluation goes beyond mere compliance with national or EU legislation; specialist input and expert opinion are essential. The manager overseeing the procedure must synthesize these diverse inputs to evaluate overall risk.<\/p>\n<p>For example, achieving the biodiversity\u2011net\u2011gain targets required by certain investors cannot be satisfied solely by meeting national regulations. Assessors must define measurable, practical KPIs and develop plans that address gaps identified in the initial review.<\/p>\n<p>Following a project review, an environmental and social action plan is created to align with the applicable standards. High\u2011risk findings typically need to be resolved before financial close (FC).<\/p>\n<p>These assessments often demand a substantial amount of expert time and resources within a tight timeframe (typically 6\u201310\u202fweeks). Both the client and the consultant must allocate sufficient resources to achieve a satisfactory outcome. Borrowers should also recognize that the process is not a one\u2011off exercise; the initial risk assessment and action plan lay the groundwork for ongoing work, with continuous improvement and KPI reporting required to satisfy financing institutions.<\/p>\n<p>Hendrikson brings extensive experience across multiple institutional standards\u2014including EP4, IFC, EBRD, and EB. Our background in planning procedures, mergers and acquisitions, EU legislation, and biodiversity management gives us a comprehensive understanding of environmental and social risks across various sectors.<\/p>\n<p><strong>Contact us today to strengthen the financial, environmental, and social sustainability of your project.<\/strong><\/p>\n<\/div><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-1 fusion_builder_column_1_4 1_4 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:25%;--awb-margin-top-large:0px;--awb-spacing-right-large:7.68%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:3.84%;--awb-width-medium:25%;--awb-order-medium:0;--awb-spacing-right-medium:7.68%;--awb-spacing-left-medium:3.84%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column\"><div class=\"fusion-image-element \" style=\"--awb-caption-title-font-family:var(--h2_typography-font-family);--awb-caption-title-font-weight:var(--h2_typography-font-weight);--awb-caption-title-font-style:var(--h2_typography-font-style);--awb-caption-title-size:var(--h2_typography-font-size);--awb-caption-title-transform:var(--h2_typography-text-transform);--awb-caption-title-line-height:var(--h2_typography-line-height);--awb-caption-title-letter-spacing:var(--h2_typography-letter-spacing);\"><span class=\" fusion-imageframe imageframe-none imageframe-1 hover-type-none\"><img decoding=\"async\" width=\"900\" height=\"600\" title=\"Lauri-1\" src=\"https:\/\/dge.ee\/wp-content\/uploads\/2024\/07\/Lauri-1.jpg\" alt class=\"img-responsive wp-image-2703\" srcset=\"https:\/\/dge.ee\/wp-content\/uploads\/2024\/07\/Lauri-1-200x133.jpg 200w, https:\/\/dge.ee\/wp-content\/uploads\/2024\/07\/Lauri-1-400x267.jpg 400w, https:\/\/dge.ee\/wp-content\/uploads\/2024\/07\/Lauri-1-600x400.jpg 600w, https:\/\/dge.ee\/wp-content\/uploads\/2024\/07\/Lauri-1-800x533.jpg 800w, https:\/\/dge.ee\/wp-content\/uploads\/2024\/07\/Lauri-1.jpg 900w\" sizes=\"(max-width: 640px) 100vw, 400px\" \/><\/span><\/div><div class=\"fusion-text fusion-text-3\"><p style=\"text-align: center;\"><strong>Lauri Niemel\u00e4<\/strong><br \/>\n<a href=\"http:\/\/+372%205886%206419\/\">+372 5886 6419<\/a><br \/>\n<a href=\"mailto:lauri@dge.ee\">lauri@dge.ee<\/a><\/p>\n<\/div><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-2 fusion_builder_column_1_4 1_4 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:25%;--awb-margin-top-large:0px;--awb-spacing-right-large:7.68%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:7.68%;--awb-width-medium:25%;--awb-order-medium:0;--awb-spacing-right-medium:7.68%;--awb-spacing-left-medium:7.68%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column\"><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-3 fusion_builder_column_1_4 1_4 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:25%;--awb-margin-top-large:0px;--awb-spacing-right-large:7.68%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:7.68%;--awb-width-medium:25%;--awb-order-medium:0;--awb-spacing-right-medium:7.68%;--awb-spacing-left-medium:7.68%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column\"><\/div><\/div><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-4 fusion_builder_column_1_4 1_4 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:25%;--awb-margin-top-large:0px;--awb-spacing-right-large:7.68%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:7.68%;--awb-width-medium:25%;--awb-order-medium:0;--awb-spacing-right-medium:7.68%;--awb-spacing-left-medium:7.68%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column\"><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":4,"featured_media":0,"parent":825,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-3829","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Lenders\u2019 Environmental &amp; 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