Review of Environmental, Social, and Labor Issues Environmental Review:
1. Project Description: The project consists of a debt facility for up to US$15 million to Banco CMF to on lend to Argentine SMEs.
2. Environmental and Social Categorization and Rationale: In accordance with the IIC Environmental and Social Sustainability Policy, the project is classified as category “FI-2” operation because the client´s current or future subprojects entail a medium level of risk.
3. Environmental and Social Risks and Impacts: Environmental and Social impacts and risks of the project are linked with those associated with the operation of CMF´s portfolio, which are expected to have medium to low environmental and social risks, for example contamination of land and water (manufacturing), increased greenhouse gas emissions (manufacturing), noise and air pollution (construction, manufacturing), occupational and health and safety risks (construction, manufacturing), trade and commerce of products and substances that are not in compliance with the IIC´s exclusion list, operations (trade), environmental and social impacts and risks associated with the agricultural supply chain (habitat conversion and degradation, poor land use, deforestation, contamination), impacts on protected areas (agriculture), environmental and social impacts on coastal zones, lakes and rivers in protected areas that may result from natural disasters, such as earthquakes, forest fires and landslides.
4. Mitigation Measures/Environmental & Social (“E&S”) Action Plan: CMF has developed a Sustainable Management Guide for Environmental and Social and Government Risks; potential E&S risks associated with its clients’ operations are identified and evaluated by the performing of site visits whose results are summarized on an Environmental and Social Risk Report. It is expected that under the current operation, the client will enhance its E&S management and Human Resources practices, by adopting the IFC Performance Standards as a guide in the preparation of E&S management documentation.