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Performance Standards

1: Social and Environmental Assessment and Management System

2: Labour and Working Conditions

3: Pollution Prevention and Abatement

4: Community Health, Safety and Security

5: Land Acquisition and Involuntary Resettlement

6: Biodiversity Conservation and Sustainable Natural Resource Management

7: Indigenous Peoples

8: Cultural Heritage


IFC's Policy and Performance Standards on Social & Environmental Sustainability


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Accounts Modernisation Directive (AMD) is effective for financial years beginning on or after 1 April 2005 and requires a mandatory addition to the Business Review which currently appears in annual reports and accounts. Large (>250 employees) and medium-sized companies must produce a Business Review with a 'fair review' of the business of the company. Both large and medium are encouraged to include non-financial matters (explicitly environment and employee matters) using key performance indicators (KPIs), although large companies must do so "to the extent necessary for an understanding of the development, performance or position of the business of the company".

Agenda 21 is the name of the agreement signed by most countries at the Rio Conference in 1992. "Agenda 21 addresses the pressing problems of today and also aims at preparing the world for the challenges of the next century. It reflects a global consensus and political commitment at the highest level on development and environment co-operation."

Assimilative capacity is the amount the environment can absorb of a load of pollutants, while remaining below a threshold of unacceptable risk to human health and the environment.

Audit is the process where an independent verifier checks suppliers are doing what they say. Originally an 'eco-audit' was a workplace inspection looking for environmental effects of the work. This meaning can often be heard in Europe today. Nowadays, the word is closer to the meaning of a financial audit. More re Social Audit

Benchmarking involves comparing the measures in your organisation for certain performance standards with those in a similar organisation, as a way to set and understand your own standards.

Biodiversity is the wealth of life on earth. It refers to the millions of plants, animals, and micro-organisms, their genes and the relationships they build into the living environment

Biosphere is the sum of all ecosystems

Biotechnology means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use.

Capacity building is the development of the skills and activities of individuals in an organisation to their full capacity. It means investment made with the purpose of enhancing the ability of individuals to achieve their development goals.

Carrying capacity is the maximum number of individuals of a defined species that a given environment can support over the long term. The notion of limits is fundamental to the concept of carrying capacity. However, our limited understanding of complex, non-linear systems leads to uncertainty in calculating carrying capacity in relation to humans.

Certification system has independent, objective and measurable performance standards, developed through consultation with relevant stakeholders and transparent, independent decision-making procedures.

Child Labour refers to work that is mentally, physically, socially or morally dangerous and harmful to children; and interferes with their schooling: by depriving them of the opportunity to attend school; by obliging them to leave school prematurely; or by requiring them to attempt to combine school attendance with excessively long and heavy work. ILO Definition - more

Cleaner Production is the continuous application of an integrated preventive environmental strategy to processes and products in order to reduce risks to human and the environment. Cleaner production includes conserving raw materials, water and energy, eliminating toxic raw materials and reducing the quantity and toxicity of all emissions and wastes into water and into the atmosphere, and of waste.

Climate Change (also referred to as 'global climate change') refers to all forms of climatic inconsistency, but because the Earth's climate is never static, the term is more properly used to imply a significant change from one climatic condition to another, which most people believe is now happening due to global warming.

Codes of Practice are not enforced like 'Regulations' but carry more force than 'Guidelines', as they are usually agreed between partners as to what constitutes reasonable behaviour.

Collective bargaining: groups are able to negotiate with management, on behalf of workers on issues such as pay and working conditions.

Common but Differentiated Responsibility is a Principle of Rio Declaration. It says: "States shall cooperate in a spirit of global partnership to conserve, protect and restore the health and integrity of the Earth's ecosystem. In view of the different contributions to global degradation States have common but differentiated responsibilities. The developed countries acknowledge the responsibility that they bear in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and the technologies and financial resources they command" (Principle 7)


Competency is the set of skills and attitudes, described in terms of behaviours, which can be observed and which is essential for effective environmental performance. Competence is the ability to perform in the workplace to the standards required.(MCI NVQ 4)

Compliance is meeting the required standards, specifications, procedures or law.

Consultation is asking others for their views and involving them openly in decision-making. A more strict legal definition requires employers to inform employee representatives of proposals, and be give them the chance to respond, and take note of their response, without necessarily any commitment to do anything about the response.

Corporate Social Responsibility is how business takes account of its economic, social and environmental impacts in the way it operates – maximising the benefits and minimising the downsides. More @ UK Government & CSR

Continuous (sometimes "continual") improvement is the process of enhancing the management system to achieve improvement in overall performance in line with a policy or set criteria.

Conventions are formal multilateral treaties with a broad number of parties, usually under the auspices of United Nations, or by a large number of states, or an organ of an international organization (e.g. ILO Conventions). While countries must ratify Conventions before they come into force, there is no court to prosecute those whose do not then comply (unlike the World Trade Organisation procedures). More about UN Environmental Conventions.

Criteria are the standards, guidelines or measures used to make evaluate or verify the required performance

Degradation (or Conversion) is: (i) the elimination or severe diminution of the integrity of a habitat caused by a major, long-term change in land or water use; or (ii) modification of a habitat that substantially reduces the habitat’s ability to maintain viable population of its native species.

Discrimination is unfavorable or unfair treatment of a person or class of persons because of race, sex, color, religion, national origin, age, physical/mental handicap, sexual harassment, or sexual orientation.

Displaced persons are people: (i) who have formal legal rights to the land they occupy; (ii) who do not have formal legal rights to land, but have a claim to land that is recognized or recognizable under the national laws or (iii) who have no recognizable legal right or claim to the land they occupy.

Ethical Business includes working towards the ending of child labour, forced labour, and sweatshops, and looking at health and safety, labour conditions and labour rights.

ETI Base Code is based on key conventions of the ILO, that ETI requires its members to uphold. Its content was negotiated and agreed by the founding trade union, NGO and corporate members of ETI. It is accompanied by a set of general principles governing its implementation. (from ET Glossary)

Exploitation of labour: includes all situations where workers are forced to work under the threat of penalty.

Fair Trade "is an alternative approach to conventional international trade. It is a trading partnership which aims at sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, by awareness raising and by campaigning”

Financial feasibility is based on commercial considerations, including the relative magnitude of the incremental source of such impacts, and documentation of the rationale for selecting the particular course of action proposed.

Freedom of association: workers are able to form or join groupings of their own choosing, including trade unions.

Greenhouse Effect is produced as greenhouse gases allow incoming solar radiation to pass through the Earth's atmosphere, but prevent most of the outgoing infra-red radiation from the surface and lower atmosphere from escaping into outer space. This process occurs naturally and has kept the Earth's temperature about 59 degrees F warmer than it would otherwise be. Current life on Earth could not be sustained without the natural greenhouse effect. More definitions relating to global warming and greenhouse gases

Greenhouse Gases (GHG) are those gases contributing to the greenhouse effect and are carbon dioxide, chlorofluorocarbons (CFCs), nitrous oxides, and methane. Global Warming Potential (GWP) is the index used to translate the level of emissions of various gases into a common measure in order to compare the relative radiative forcing of different gases without directly calculating the changes in atmospheric concentrations.

Green track is a shorthand expression from the US for alternative pathways that companies take by committing themselves to environmental objectives that go beyond compliance with pollution control laws.

Greenwash is disinformation produced by an organisation so as to present an environmentally responsible public image, when it has not doing much for the environment.

Guidelines are a guide, rather than a regulation, for required performance.

Hygiene refers to the conditions and practices to maintain health, particularly sanitation and personal cleanliness.

Informal work is performed in an employment relationship that is not recognised or protected under legal or regulatory frameworks.

Inhumane is cruel treatment of humans - and other animals

Involuntary resettlement refers to physical displacement (relocation or loss of shelter) and to economic displacement (loss of assets or access to assets that leads to loss of income sources or means of livelihood).

ISO 14000 is a series of voluntary standards and guideline reference documents which include: Environmental Management Systems (14001-4), Eco Labeling (14020-24) Life Cycle Assessment (14040-44) Environmental Auditing (14010-12) Environmental Aspects in Product Standards. 14031 sets out guidance on the design and use of environmental performance evaluation, inclcuding environmental performance indicators.

Key Performance Indicators (KPIs) are parameters used for determining the degree to which an organisation has achieved its goals. ISO 14031 sets standards for Environmental Performance Indicators (EPIs), Management (EMIs) and Operational Indicators (OPIs).

Labour Exploitation says a person 'is exploited if (and only if) he is the victim of behaviour that contravenes Article 4 of the Human Rights Convention (slavery and forced labour)…(or if) he is subjected to force, threats or deception designed to induce him - to provide services of any kind, to provide another person with benefits of any kind, or to enable another person to provide benefits of any kind.'

Land acquisition includes both outright purchases of property and purchases of access rights, such as rights of way.

Management System is the framework of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives. See Wikipedia for more

Monitoring refers to the surveillance of labour practices against a standard by people with a presence in the workplace and with access to management and staff.

Pollution refers to hazardous and nonhazardous pollutants in the solid, liquid, or gaseous forms, and includes other forms such as nuisance odours, noise, vibration, radiation, & electromagnetic energy.

Regulation means every rule or order adopted by any state agency to implement, interpret or make specific the law enforced or administered by it.Section 11342 (g) provides the following definition of “regulation”:

Reports....standrds of..

Risk Assessment is the process of determining the risk from hazards or impacts by determining the likelihood and severity of such risk.

Self Assessment enables suppliers to demonstrate conformance to Sound Sourcing using participatory and transparent techniques More

Social Audit encourages local people to gain sufficient competence to carry out an audit.

Sound Sourcing has been developed by the Co-op as a commitment to worldwide ethical trade inititiative, which is based on the conventions of the International Labour Organisation, the United Nations body which sets global standards in areas such as child labour and workers rights.

Sourcing company purchases product from another company, for either direct or indirect onward sale to the consumer.

Stakeholder to any individual, community or organisation that affects or is affected by the operations of a company.

Supplier is a company that sells product to a sourcing company (above)

Sustainable Development is "development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This is commonly called the "classic" "original" or "Brundtland" definition arising from the UN Report "Our Common Future". 1987. See SDC for other definitions.

Sustainable resource management is the management of the use, development and protection of resources in a way, or at a rate, which enables people and communities, including Indigenous Peoples, to provide for their present social, economic and cultural well-being while also sustaining the potential of those resources to meet the reasonably foreseeable needs of future generations and safeguarding the life-supporting capacity of air, water and soil ecosystems. (IFC definition).

Technical feasibility is based on whether the proposed measures and actions can be implemented with commercially available skills, equipment and materials, taking into consideration prevailing local factors such as climate, geography, demography, infrastructure, security, governance, capacity and operational reliability.

Trade Unions have as their main purpose the representation of employees, including collective bargaining, with employers and is organised on a national basis by industry, by sector, by occupation or by enterprise - or all, when they are called 'general' Transport & General Workers Union, General & Municipal Workers Union.

Treaty is a formal agreement between two or more states, in reference to trade.

Transactions Types I transactions (acquisition of land rights through expropriation or other legal procedures) involving physical or economic displacement, and Type II transactions (negotiated settlements)

Verification concerns the impartial examination and certification of claims made about the observance of code provisions by suppliers.

Working Hours are determined by law for certain categories of workers

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