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Financial institution staff can conduct a site visit as part of the environmental and social due diligence process for a proposed transaction as well as during the monitoring process for an approved transaction.

The focus of the site visit is to identify potential environmental and social issues that may represent a risk to the client’s/investee’s business activities if left unmitigated and to review a client’s/investee’s compliance with the financial institution’s environmental and social requirements. If a transaction involves an industry sector with complex environmental and social issues, financial institution staff should solicit the opinion of a social or environmental expert.

Prior to a site visit, financial institution staff should be familiar with the environmental and social information provided by the client/investee or identified during a previous site visit as well as have a general understanding of the environmental and social issues that are typically associated with a particular industry sector. Financial institution staff can then ask more targeted questions, request any necessary documents and focus their observations on particular areas of a facility during their site visit. This helps reduce the amount of time needed to conduct the site visit, which can range from less than 1 hour to a full day or more depending on the size and complexity of the facility.

Financial institution staff should meet with site managers including health and safety officers and human resources officers as well as technical staff who are well-informed of the environmental and social implications of processes associated with the client’s/investee’s operations. Although the specific focus of a site visit will vary for each transaction as a function of the client’s/investee’s business operations, financial institution staff should gain general information about:

  • General characteristics of the site including age and use of facilities and buildings
  • Operations and processes performed on the site
  • Size of the workforce
  • Labor practices
  • Surrounding land use

The site visit should be conducted during hours of operation and should focus on key areas such as:

  • Processing/manufacturing lines
  • Installations for wastewater treatment
  • Sources of air emissions and filters
  • Storage areas for hazardous materials
  • Storage areas for waste and disposal processes
  • Worker facilities
  • Neighboring properties

Signs of possible environmental and social concerns include:

  • Leaking containers or pipes
  • Poorly maintained storage tanks/facilities
  • Unmarked tanks or areas with hazardous or flammable materials
  • Discoloration of ground and potential site contamination
  • Discoloration of nearby streams or drainage channels
  • Excessive gas or dust emissions
  • Excessive noise
  • Strong odors
  • Limited use of personal protective equipment by employees
  • Complaints by local residents
  • Proximity of surrounding communities

The financial institution can develop a checklist for conducting a site visit and facilitate identification of environmental and social issues.

During the site visit, financial institution staff should also observe if there are any environmental business opportunities in the client’s/investee’s operations and follow up with appropriate investment officers within the financial institution. Financial institution staff should record the environmental and social findings, observations and photographs, if necessary, to insert in the client/investee file.

In the event of environmental and social findings that require follow up by the client/investee, financial institution staff can develop a formal corrective action plan with a timeframe for the client/investee to implement appropriate mitigation measures. In many cases, environmental and social findings can be addressed and resolved by the client/investee in a short time and do not require a formal corrective action plan but should nonetheless be documented in the client/investee file.


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