Guidance Note – ESMS Manual Environmental & Social Version : 15 March 2020

Management System
(ESMS)

Environmental and Social Impact Assessment (ESIA)

I. Context
This document provides guidance for conducting an Environmental and Social Impact Assessment
(ESIA) and for preparing an ESIA report. It also serves as guidance for drafting the Terms of
Reference for an ESIA. An ESIA is applicable for projects that have been identified by the
Environmental and Social Management System (ESMS) screening as high or moderate risk projects,
requiring full or a partial ESIA respectively 1. The purpose of the ESIA is to assess and predict potential
adverse social and environmental impacts and to develop suitable mitigation measures, which are
documented in an Environmental and Social Management Plan (ESMP).

The scope and depth of the ESIA depends on the nature, complexity and significance of the identified
issues, as established by the ESMS screening. For a full ESIA the scope is defined by a scoping study
which involves relevant stakeholders to confirm the risks identified by the ESMS screening, to set
priorities for the ESIA and to determine the types of assessments required for the ESIA. The key
elements, methodology and outputs of a scoping study are described in the ESMS Guidance Note on
Scoping. 2

II. Key elements of an ESIA and an ESIA report

The key elements of an ESIA and its report are described in this section. These elements must be
thoroughly covered by a full ESIA for a high-risk project. A partial ESIA does not require as much
background and baseline data as a full ESIA; the elements usually not covered in a partial ESIA are
marked with an asterisk. The order and manner in which the information is presented in an ESIA
report should be based on this outline.

1. Non-technical summary

Summarise significant impacts in a way that can be easily understood by a non-technical audience, in
particular local stakeholders. The summary includes how the identified impacts should be managed
and points out any outstanding issues that require further action.

2. Project description

Concisely describe the main parameters of the proposed project, including:

• The executing entities of the project (e.g. main project lead as well as project partners) and
their respective roles in the project
• The project’s geographic location, preferably illustrated with appropriate maps 3
• Summary of the project (project objective(s), expected results/outcomes, outputs and main
activities)
• Implementation arrangements.

3. Analysis of policy, legal and administrative framework*

Describe the policy, legal and administrative framework within which the project takes place and
identify any laws and regulations that pertain to environmental and social matters relevant to the

1 A partial ESIA typically focusses on the few delineated environmental or social impacts issues identified by the ESMS screening.
2 Available at www.iucn.org/esms.
3 When including maps in the ESIA report, make sure that the sites mentioned in the report are clearly identified on the maps.
project. This includes regulations about environmental and/or social impact assessments to which the
project must adhere as well as laws implementing host country obligations under international law.
Explain the requirements of any co-financing partners, if applicable. Where pertinent, take into account
legal frameworks for promoting gender equality. Flag any areas where the project might fall short on
compliance.

4. Stakeholder identification and analysis

The purpose of the stakeholder identification and analysis is to understand potential impacts on
stakeholders and to clarify who should be involved in the ESIA process and how. This is done by
listing all relevant stakeholders – based on any existing stakeholder analysis developed during the
project design process and on general knowledge about the project context and its main stakeholders
– and elaborating the following:

• stakeholders’ interests in and expectations from the project;

• how they might influence the project (positively or negatively);
• a first appraisal or estimation of how their livelihoods could be impacted by the project
(positively or negatively); and
• how they should be involved in the ESIA based on the information in the three items above.

Stakeholders should be disaggregated between men and women where relevant and feasible. It is
useful to present the key findings of the stakeholder analysis in a matrix. The stakeholder analysis is
considered a work in progress that should be adjusted as more information becomes available during
the ESIA process and beyond.

5. Environmental and social baseline*

Describe and analyse the environmental and social context in which the project operates. While some
broad contextual information is necessary, the analysis should focus on the immediate context of the
project site and aspects that relate to the identified impacts in order to be relevant to decisions about
project design, operation, or mitigation measures. For general context data, consult– to the extent
possible - secondary data and existing analyses, including the situation analysis carried out as a
previous project design step. To understand the context at the project site, it is usually necessary to
collect primary data at the site.

The main purpose of this section of the ESIA report is to provide an understanding of current
environmental and social conditions that form the baseline against which project impacts can be
predicted and measured during project implementation. For moderate-risk projects that require only a
partial ESIA and no scoping study, this section also provides an opportunity to substantiate the results
of the ESMS screening by confirming potential impacts and/or identifying other potential impacts.

The scope of the baseline analysis depends on the nature of the project and the issues identified by
the screening. The analysis might cover a range of physical, biological, socio-economic and cultural
features potentially affected by the project. The ESMS Guidance Note on Social Impact Assessment
(SIA)4 provides complimentary guidance including a non-exhaustive list of topics relevant for
understanding social impacts.

6. Assessment of environmental and social impacts

This step is the heart of the ESIA; it itemizes and describes the identified impacts, makes predictions
in terms of their probability and assesses their significance. In accordance with the ESMS Policy
Framework, the assessment should give particular attention to impacts related to the ESMS standards
such as adverse impacts on people’s livelihood through access restrictions or resettlement, on

4 See ESMS Guidance Note on Social Impact Assessment, available at www.iucn.org/esms.

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indigenous peoples, on cultural heritage or on biodiversity. However, thematic coverage of the ESMS
also involves other potential social impacts including impacts on women or vulnerable groups or risks
triggered by the project failing to take climate change effects into consideration. While the ESIA’s
terms of reference already establishes the main impacts to be covered by the assessment – based on
the screening (or scoping for high-risk projects) – it is important to understand that an ESIA is an
iterative process during which new and more detailed information may be obtained and additional
significant issues might come up (e.g., as part of the baseline analysis).

When analysing the risks not only direct impacts should be taken into consideration but also indirect
impacts such as inadvertent knock-on effects or cumulative effects that materialise through interaction
with other developments, impacts occurring at the project site or within the project’s wider area of
influence5 and impacts triggered over time 6.

Project impacts can be analysed using a range of methods from simple qualitative analysis to detailed
quantitative surveys or modelling. The data collection methods and analytical tools used and the depth
of analysis should be commensurate with the type and significance of the impacts, it should allow
rigorous assessment of the significant impacts using qualitative and, to the extent possible, also
quantitative methods. The report should describe the methods chosen for data collection and analysis
and the rational for the choice of method; it should further describe the quality of available data and,
where applicable, explain key data gaps and uncertainties associated with predictions.

Participatory research and assessment tools should be employed wherever sensible to increase
stakeholder’s understanding of the project, provide opportunity for raising issues and enable
participation of affected groups in the identification of mitigation measures, as discussed in section 9.

Understanding the significance of risks is important for prioritising the need for mitigation measures.
For evaluating significance it is important to consider the likelihood that a given risk event is expected
to occur and the magnitude of the expected impacts (consequence). The latter refers to the extent to
which a risk event might negatively affect environmental or social receptors. This includes
considerations of the following criteria:
• sensitivity of the receptor,
• severity of impacts,
• expected duration and scale and
• whether or not the impact is reversible.

Assessing significance of of risks also takes into consideration whether there are known, acceptable
and readily available good practices to address those impacts and whether the executing entities
and/or main stakeholders have experience applying such measures.
Annex A describes the methodology that IUCN uses for assessing the significance of environmental
and social impacts/risks.

7. Analysis of alternatives*

The purpose of the analysis of alternatives is to identify other options, including not implementing the
project, to achieve the project objectives and compare their impacts with the original proposal. This
step is required only for high-risk projects where the identified impacts are very significant.

The analysis systematically compares feasible, less adverse, alternative technologies, designs,
operations and sites – including the "no project" option – to the proposed project in terms of:

5For a definition of the project’s wider area of influence, see the glossary in the ESMS Manual at www.iucn.org/esms.
6Although the future cannot be foreseen, the assessment should consider scenarios that are technically or scientifically robust
enough to make predictions.
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 • their effectiveness of achieving the project objectives as well as potential trade-offs;
• their potential environmental and social impacts;
• the feasibility of mitigating these impacts;
• operational requirements and their suitability under local conditions;
• their institutional, training, and monitoring requirements;
• their estimated cost-effectiveness; and
• their conformity to existing policies, plans, laws and regulations.

The analysis should recommend the preferred alternative and state why it was chosen.

8. Environmental and social management plan (ESMP)

A main output of the ESIA process is a strategy for managing risks and mitigating impacts. The
identification of mitigation measures is done in consultation with affected groups and is guided by the
mitigation hierarchy. The mitigation hierarchy implies that all reasonable attempts must first be made
to avoid negative social or environmental impacts. If avoidance is not possible without challenging the
conservation objective of the project, measures should be taken to minimise the impacts to acceptable
levels and address remaining residual impacts with adequate and fair compensation measures.

The risk management strategy is documented in an Environmental and Social Management Plan
(ESMP) that describes: the mitigation measures developed during the ESIA, an implementation
schedule and required resources and responsibilities. The technical and operational feasibility, cultural
adequacy and sustainability of proposed measures must be demonstrated as well as requirements for
capacity building and institutional strengthening, where relevant. The ESMP should also indicate how
the measures designed to avoid impacts will be monitored for effectiveness. The guidance note for
developing the ESMP provides further instructions and includes templates for the ESMP and for
monitoring the plan.7

9. Results of stakeholder consultations

Stakeholder engagement is a key principle of the ESMS and an important procedural tool for a
successful ESIA. It improves understanding of local conditions and stakeholders’ concerns and is
essential for identifying effective strategies for mitigating negative impacts. Involving affected groups in
decision making gives them more confidence and security, improves the legitimacy of the project and
helps build constructive relationships among stakeholders.

The ESMS Manual defines requirements for stakeholder engagement by establishing minimum
provisions for disclosure and consultation during the steps of the project cycle. 8 These provisions are
particularly relevant for the ESIA process; the provisions for consulation and disclosure are more
stringent for high-risk projects (full ESIA) than for moderate-risk projects (partial ESIA).Tables 5 and 6
in the ESMS Manual synthesise these requirements. 9

During the ESIA, consultations should concentrate on potentially affected groups, indigenous peoples
and civil society organizations; the stakeholder analysis supports the decision of whom to consult. The
consultation process must be culturally appropriate, non-discriminatory and gender sensitive. It should
assure that all people whose lives might be affected by the project are properly consulted to verify and
assess the significance of impacts and that all affected groups are provided the opportunity to
participate in the development of mitigation measures.

The intensity or depth of stakeholder engagement should be appropriate to the complexity of the
project and the significance of the identified risks and tailored to individual groups. The general logic of
stakeholder engagement that should be followed is described in Figure 3 in the ESMS Manual. It is

7 See ESMS Guidance Note on Developing and Monitoring an ESMP, available at www.iucn.org/esms.
8 See sections 4.2.7 and 4.6 of the ESMS Manual, available at www.iucn.org/esms.
9 See ESMS Manual, section 4.6, available at www.iucn.org/esms.

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important to be mindful of the resources and time required of stakeholders. The consultation process
is best scheduled in iterative steps, first seeking initial inputs, then feed-back on first assessment
results and suggestions for mitigation actions, and concluding with a final stakeholder meeting to
gather feed-back on the draft of the ESIA report, the ESMP and other action plans, as relevant.

If the Standard on Involuntary Resettlement and Access Restrictions or the Standard on Indigenous
Peoples are triggered, consultations should fully adhere to the Free, Prior and Informed Consent
Principle. Guidance is provided in the ESMS Manual and in a separate guidance note. 10

The final ESIA report should document the results of the consultations carried out with stakeholders
and project-affected groups and provide a summary of the concerns raised and an explanation of how
these results have been addressed in the ESIA and the ESMP. The description should specify how
women were included in the consultation, taking into consideration their gender-specific knowledge,
roles, responsibilities and potential impacts.

III. Other items to be specified in the terms of reference for an ESIA

The actual terms of reference for an ESIA must be tailored to each project as the scope and depth of
the assessment depend on the nature, complexity and importance of the issues emerging from the
ESMS screening. For high-risk projects, the scope of the ESIA will be determined in detail by the
scoping study preceding the ESIA.

The terms of reference for an ESIA usually include the items listed below. The terms of reference for
moderate-risk projects are less comprehensive than those for high-risk projects; hence elements
marked with an asterisk are usually not required for a partial ESIA.

• A summary of the main project features

• A list of applicable national and local ESIA requirements, where available and relevant*
• A list of the key issues that emerged from the ESMS screening and scoping to be analysed in
the ESIA
• A description of the required elements of the ESIA (see section II, 3-9) and specification of the
content of any additional specialist studies (if applicable) to be undertaken as part of the ESIA
• Provision of methodological guidance (if applicable) for the overall ESIA and specialist studies
(e.g., gender responsive analysis)
• Specification of the type of environmental and social expertise required by the ESIA
expert/team
• A preliminary list of feasible project alternatives including a “no project” option and
requirements for their assessment*
• Specification of types of required consultations with affected people, communities and other
parties including final stakeholder meeting(s) for gathering views on the draft ESIA and ESMP
• The requirement for preparing an ESIA report and other documents or action plans (as
needed) and for rigorously indicating accuracy, reliability and sources of the data used
• A budget and schedule for the ESIA providing sufficient time and funds for effective
stakeholder consultation.

Carrying out an ESIA requires a technical team with appropriate qualifications and experience in
qualitative and quantitative research techniques and familiarity with the thematic and regional or local
context; the team should have experience with participatory design and assessment methodologies,
with gender analysis and gender-responsive project design and, where relevant, with indigenous
peoples’ issues.

10 ESMS Guidance on Free, Prior and Informed Consent will be available at www.iucn.org/esms.
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Annex A: Guidance for rating environmental and social risks
The rating of risks is based on the assumptions that the management measures and plans specified in the respective column are implemented and effective in mitigating the risk. It is
good practice that the plans are available before ESMS Clearance. Risk rating is based on the two elements: likelihood and the expected impacts (consequence).
Likelihood represents the possibility that a given risk event is expected to occur. The likelihood should be established using the following five ratings: Very unlikely to occur (1), Not
expected to occur (2), Likely – could occur (3), Known to occur - almost certain (4) and Common occurrence (5)

Impact (or consequence) refers to the extent to which a risk event might negatively affect environmental or social receptors – see criteria distinguishing five levels of impacts in table 1:

Table 1: Rating impact of a risk event

Severe (5) Adverse impacts on people and/or environment of very high magnitude, including very large scale and/or spatial extent (large geographic area, large number
of people, transboundary impacts), cumulative, long-term (permanent and irreversible); receptors are considered highly sensitive; examples are severe
adverse impacts on areas with high biodiversity value 11; severe adverse impacts to lands, resources and territories of indigenous peoples; significant levels of
displacement or resettlement with long-term consequences on peoples’ livelihood; impacts give rise to severe and cumulative social conflicts with long-term
consequences.
Major (4) Adverse impacts on people and/or environment of high magnitude, including large scale and/or spatial extent (large geographic area, large number of people,
transboundary impacts), of certain duration but still reversible if sufficient effort is provided for mitigation; receptors are considered sensitive; examples are
adverse impacts on areas with high biodiversity value; adverse impacts to lands, resources and territories of indigenous peoples; significant levels of
displacement or resettlement with temporary consequences on peoples’ livelihood; impacts give rise to social conflicts which are expected to be of limited
duration.
Medium (3) Adverse impacts of medium magnitude, limited in scale (small area and low number of people affected), limited in duration (temporary), impacts are
relatively predictable and can be avoided, managed and/or mitigated with known solutions and straight forward measures.
Minor (2) Adverse impacts of minor magnitude, very small scale (e.g. very small affected area, very low number of people affected) and only short duration, may be
easily avoided, managed, mitigated.
Negligible (1) Negligible or no adverse impacts on communities, individuals, and/or on the environment.

Significance of risks is established by combining likelihood and expected impact (consequence) of a risk event as demonstrated in table 2. The significance rating signals how much
attention the risk event will require during project development and implementation and the extent of control actions to be put in place. See the Guidance Note on Assessment and
Management of Environmental and Social Risks for further details on the rating (including factors influencing the likelihood and impact).
Table 2: Rating significance of a risk event
Likelihood of occurrence
Very unlikely to Not expected to Likely – could Known to occur - Common
occur (1) occur (2) occur (3) almost certain (4) occurrence (5)
Severe (5) Moderate Substantial High High High
Major (4) Low Moderate Substantial Substantial High
Impact

Medium (3) Low Moderate Moderate Moderate Substantial

Minor (2) Low Low Moderate Moderate Moderate
Negligible (1) Low Low Low Low Low

11
For the definition see IUCN ESMS Standard on Biodiversity Conservation and Sustainable Use of Natural Resources.
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