Streamlining MDB environmental, social and procurement safeguards while maintaining high standards

Multilateral development banks (MDBs) utilise environmental and social safeguard frameworks (ESFs) and procurement policies to ensure high operation quality and reduce unintended negative impacts. While the goals of ESF and procurement policies are widely supported, their application can increase costs, implementation times and bureaucratic requirements. The use of MDB policies instead of borrower country policies and systems also raises questions about sovereignty and country ownership. With active shareholder support, MDBs should accelerate efforts to harmonise and simplify these policies and move towards greater use of recipient country systems by building local capacity, without diluting high MDB standards. The G20 can play a useful role in providing greater impetus to reform and in driving coordination at the system level, although all policy decisions must be taken by the appropriate governance arrangements of each MDB.