ASIAN DEVELOPMENT BANK

SUSTAINABILITY REPORT 2018 DETAILED GLOBAL REPORTING INITIATIVE CONTENT INDEXJUNE 2018

ASIAN DEVELOPMENT BANK

ASIAN DEVELOPMENT BANK

SUSTAINABILITY REPORT 2018 DETAILED GLOBAL REPORTING INITIATIVE CONTENT INDEXJUNE 2018

ASIAN DEVELOPMENT BANK

 Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2018 Asian Development Bank6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, PhilippinesTel +63 2 632 4444; Fax +63 2 636 2444www.adb.org

Some rights reserved. Published in 2018.

Publication Stock No. TIM189210-2DOI: http://dx.doi.org/10.22617/TIM189210-2

The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.

ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned.

By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.

This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess.

This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material.

Please contact pubsmarketing@adb.org if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo.

Notes: In this publication, “$” refers to United States dollars.Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda.

All photos and illustrations are from ADB unless specified. Cover photo: ADB’s operations support agriculture and natural resources.

Contents

Tables iv

Abbreviations vi

Introduction 1

GRI 102: General Disclosures, 2016 Edition 2102 Organizational Profile 2102 Strategy 15102 Ethics and Integrity 16102 Governance 19102 Stakeholder Engagement 22102 Reporting Practice 34

GRI 200: Economic Topics 40201 Economic Performance, 2016 Edition 40203 Indirect Economic Impacts, 2016 Edition 53204 Procurement Practices, 2016 Edition 64205 Anticorruption, 2016 Edition 68

GRI 300: Environmental Topics 76302 Energy, 2016 Edition 76303 Water, 2016 Edition 84304 Biodiversity, 2016 Edition 88305 Emissions, 2016 Edition 90

GRI 400: Social Topics 102401 Employment, 2016 Edition 102403 Occupational Health and Safety, 2016 Edition 112404 Training and Education, 2016 Edition 121405 Diversity and Equal Opportunity, 2016 Edition 125406 Nondiscrimination, 2016 Edition 129407 Freedom of Association and Collective Bargaining, 2016 Edition 128408–409 Child Labor and Forced or Compulsory Labor, 2016 Edition 131411 Rights of Indigenous Peoples, 2016 Edition 133412 Human Rights Assessment, 2016 Edition 136413 Local Communities, 2016 Edition 140416 Customer Health and Safety, 2016 Edition 152

Appendixes 1 Financing Tables for Disclosure 203-1 (Infrastructure Investments and Services Supported) 1562 Financing Tables for Disclosure 203-2 (Significant Indirect Economic Impacts) 163

102-7a Total Staff by Region (Location) and Gender, 2016–2017 6

102-7b Number of Approvals and Commitments by Type, 2016–2017 6

102-7c Revenue by Country, 2016–2017 7

102-8a Number of Staff by Employment Contract and Gender, 2016–2017 8

102-8b Number of Staff by Employment Contract and Region, 2016–2017 8

102-8c Number of Staff by Employment Category and Gender, 2016–2017 8

102-8d Number of Staff by Employment Category and Region, 2016–2017 9

102-8e Total Workforce, 2016–2017 9

102-44a Topics and Concerns Raised at the 2016 Annual Meeting 29

102-44b Topics and Concerns Raised at the 2017 Annual Meeting 32

201-2 Climate Change Adaptation Finance Approvals, 2016–2017 47

201-3 Actuarial Valuation of Funding Ratios of the Staff Retirement Plan 50

201-4a Sources of Project-Specific Grant Cofinancing, 2016–2017 51

201-4b Trust Fund Contributions, 2016–2017 52

302-1a Conversion of Diesel Fuel to Power, 2015–2017 80

302-1b Conversion of Liquefied Petroleum Gas to Power, 2015–2017 80

302-1c Conversion of Fuel for Road Transport to Power, 2015–2017 80

302-1d Total Energy Consumption from Nonrenewable Fuel, 2015–2017 81

302-1e Conversion of Solar Power Generated to Power, 2015–2017 81

302-1f Conversion of Utility Purchased Electricity (Geothermal) to Power, 2015–2017 82

302-1g Total Energy Consumption, 2015–2017 82

302-3 Energy Intensity, 2015–2017 83

303-1 Total Water Withdrawn, 2015–2017 87

303-3 Total Recycled and Reused Water, 2015–2017 88

304-2 Natural Resources Conservation Projects, 2016–2017 93

Tables

Tables v

305-1 Scope 1: Direct Greenhouse Gas Emissions for ADB Headquarters, 2013–2016 100

305-2 Scope 2: Indirect Greenhouse Gas Emissions for ADB Headquarters, 2013–2016 101

305-3 Scope 3: Indirect Greenhouse Gas Emissions for ADB Headquarters, 2013–2016 102

305-4a Greenhouse Gas Emissions Intensity per Capita for ADB Headquarters, 2015–2016 102

305-4b Greenhouse Gas Emissions Intensity by Floor Area for ADB Headquarters, 2015–2016 103

305-5a Change in Greenhouse Gas Emissions from 2015 to 2016 104

305-5b Change in Greenhouse Gas Emissions from Base Year 2013 to 2016 104

305-5c Change in Greenhouse Gas Emissions from 2016 to 2017 105

305-5d Change in Greenhouse Gas Emissions from Base Year 2013 to 2017 105

401-1a Rates of New Hires, 2013–2017 112

401-1b Rates of Departures (Including Retirements), 2013–2017 113

403-2 Number of Recorded Health and Safety Incidents, 2015 to 2017 121

404-1 Average Hours of Training, 2016–2017 122

405-1a Profile of the ADB Board of Governors, 2016–2017 127

405-1b Profile of the ADB Board of Directors, 2016–2017 127

405-1c Profile of Staff, 2013–2017 128

405-1d Profile of Staff by Employment Category and Gender, 2016–2017 129

405-1e Profile of Staff by Employment Category and Age, 2016–2017 129

412-2 Human Rights-Related Trainings 142

413-2 Number of Projects with Gender Action Plans, 2016–2017 153

A203-1a Investment Financing Approved and Cofinanced Funds Mobilized for Infrastructure-Related 159 Sectors, 2016

A203-1b Investment Financing Approved and Cofinanced Funds Mobilized for Infrastructure-Related 159 Sectors, 2017

A203-1c Technical Assistance Financing Approved and Cofinanced Funds Mobilized for Infrastructure- 160 Related Sectors, 2016

A203-1d Technical Assistance Financing Approved and Cofinanced Funds Mobilized for Infrastructure- 160 Related Sectors, 2017

A203-1e Investment Financing Commitments and Cofinanced Funds Mobilized for Infrastructure- 161 Related Sectors, 2016

A203-1f Investment Financing Commitments and Cofinanced Funds Mobilized for Infrastructure- 161 Related Sectors, 2017

Asian Development Bank 2018 Sustainability Reportvi

A203-1g Technical Assistance Financing Commitments and Cofinanced Funds Mobilized 162 for Infrastructure-Related Sectors, 2016

A203-1h Technical Assistance Financing Commitments and Cofinanced Funds Mobilized 162 for Infrastructure-Related Sectors, 2017

A203-2a Sovereign Financing Approved and Cofinanced Funds Mobilized 163 by Region (Investments), 2016 and 2017

A203-2b Sovereign Financing Approved and Cofinanced Funds Mobilized 163 by Region (Technical Assistance), 2016 and 2017

A203-2c Nonsovereign Financing Approved and Cofinanced Funds Mobilized 164 by Region (Investments), 2016 and 2017

A203-2d Nonsovereign Financing Approved and Cofinanced Funds Mobilized 164 by Region (Technical Assistance), 2016 and 2017

A203-2e Sovereign Financing Approved and Cofinanced Funds Mobilized by Sector (Investments), 165 2016 and 2017

A203-2f Sovereign Financing Approved and Cofinanced Funds Mobilized by Sector (Technical 166 Assistance), 2016 and 2017

A203-2g Nonsovereign Financing Approved and Cofinanced Funds Mobilized 167 by Sector (Investments), 2016 and 2017

A203-2h Nonsovereign Financing Approved and Cofinanced Funds Mobilized 168 by Sector (Technical Assistance), 2016 and 2017

A203-2i Sovereign Financing Commitments and Cofinanced Funds Mobilized 168 by Region (Investments), 2016 and 2017

A203-2j Sovereign Financing Commitments and Cofinanced Funds Mobilized 169 by Region (Technical Assistance), 2016 and 2017

A203-2k Nonsovereign Financing Commitments and Cofinanced Funds Mobilized 169 by Region (Investments), 2016 and 2017

A203-2l Nonsovereign Financing Commitments and Cofinanced Funds Mobilized 170 by Region (Technical Assistance), 2016 and 2017

203-2m Sovereign Financing Commitments and Cofinanced Funds Mobilized 170 by Sector (Investments), 2016 and 2017

203-2n Sovereign Financing Commitments and Cofinanced Funds Mobilized 171 by Sector (Technical Assistance), 2016 and 2017

203-2o Nonsovereign Financing Commitments and Cofinanced Funds Mobilized 172 by Sector (Investments), 2016 and 2017

203-2p Nonsovereign Financing Commitments and Cofinanced Funds Mobilized 173 by Sector (Technical Assistance), 2016 and 2017

ADB Asian Development BankADBI Asian Development Bank Institute ADF Asian Development FundASEAN Association of Southeast Asian NationsBEPS base erosion and profit shifting initiativeBOD Board of Directors BPMSD Budget, Personnel, and Management Systems DepartmentCCOF2030 Climate Change Operational Framework 2017–2030 CO2 carbon dioxideCPS country partnership strategyCRP Compliance Review Panel CSO civil society organizationCVRA climate change vulnerability and risk assessment DEC Development Effectiveness CommitteeDEfR Development Effectiveness ReviewDefra Department of Environment, Food and Rural Affairs DMC developing member countryDOC Department of CommunicationsE2HSMS Energy, Environment, Health, and Safety Management SystemEHS environment, health, and safetyERCD Economic Research and Regional Cooperation Department FI financial intermediaryGHG greenhouse gasGRI Global Reporting InitiativeHFC hydrofluorocarbonICAO International Civil Aviation Organization GuidelinesICT information and communication technology IED Independent Evaluation DepartmentIFC International Finance CorporationILO International Labour OrganizationIPCC Intergovernmental Panel on Climate ChangeIPSA initial poverty and social assessment (or analysis)ISO International Organization for Standardization

Abbreviations

Abbreviationsviii

LEED Leadership in Energy and Environmental DesignLPG liquefied petroleum gasMDB multilateral development bankMTR Midterm Review of Strategy 2020NGO nongovernment organizationOAI Office of Anticorruption and IntegrityOAS Office of Administrative ServicesOCR ordinary capital resourcesOECD Organisation for Economic Co-operation and Development OHSAS Occupational Health and Safety Assessment SeriesOSPF Office of the Special Project Facilitator PPFD Procurement, Portfolio and Financial Management Department PCP Public Communications Policy PRC People’s Republic of ChinaRCI regional cooperation and integrationRWU Respectful Workplace Unit SDG Sustainable Development Goal SEC Office of the SecretarySPS Safeguard Policy StatementSPRSS summary poverty reduction and social strategySRP Staff Retirement PlanUNFCCC United Nations Framework Convention on Climate ChangeWRI World Resources Institute  WBCSD World Business Council for Sustainable Development

Weights and Measures

CO2e carbon dioxide equivalentha hectarekg kilogramkm kilometerkW kilowattkWh kilowatt-hourkWp kilowatt peak m2 square meterm3 cubic meterMJ megajouleMW megawattMWh megawatt-hour

This detailed Global Reporting Initiative (GRI) Content Index accompanies the Asian Development Bank (ADB) Sustainability Report 2018 and contains the responses of ADB to general disclosures, the management approach to the material topics, and the specific disclosures for the material topics per the GRI’s Sustainability Reporting Standards. Each disclosure is tagged to the Sustainable Development Goals (SDGs) that it contributes to based on GRI’s mapping of disclosures to the SDGs. The Sustainability Report and detailed GRI Content Index were prepared in accordance with the core option of the GRI Sustainability Reporting Standards. Throughout the detailed GRI Content Index, hyperlinks provide access to further information available on the ADB website (www.adb.org) and elsewhere.

Material topics were identified and prioritized, as discussed in the “Materiality and Completeness” section of the ADB Sustainability Report 2018.

There are no omissions or external assurance of the disclosure responses unless stated in the ADB response column.

Introduction

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Organizational Profile102-1 Name of the organization Asian Development Bank (ADB)102-2 (i) A description of

the organization’s activities

(ii) Primary brands, products, and services, including an explanation of any products or services that are banned in certain markets

ACTIVITIES (refer to the section on “About ADB and the Sustainability Report” in the Asian Development Bank Sustainability Report 2018)

ADB is a multilateral development bank (MDB) whose purpose is to foster economic growth and cooperation in the Asia and Pacific region and to contribute to the economic development of its developing member countries (DMCs). ADB transfers resources from global capital markets to its DMCs through government (public sector or sovereign) and private sector (nonsovereign) projects.

PRODUCTS (refer to the section on “About ADB and the Sustainability Report” in the Asian Development Bank Sustainability Report 2018)

ADB provides a range of financial products for the public sector and the private sector, including loans, grants, equity investments, guarantees, and technical assistance (Disclosure 201). Financing modalities available to borrowers (clients) include policy-based (program-based) lending, sector-based lending, project-based lending, results-based lending, multitranche finance facilities, emergency assistance loans, financial intermediation loans, and general corporate finance.

ADB’s lending is typically sourced from its ordinary capital resources (OCR). ADB also provides loans, grants and technical assistance from its special funds, including the Asian Development Fund (ADF); administers financing partnership facilities, trust funds, and other funds; promotes innovation; and disseminates knowledge and information, consistent with the Midterm Review (MTR) of Strategy 2020 approved by ADB’s Board of Directors (BOD) in April 2014.

GRI 102: General Disclosures, 2016 Edition

continued on next page

GRI 102—General Disclosures, 2016 Edition 3

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-2 Financing is raised through public offerings, private placements, other transactions, and reflows from loans (Disclosure 201).

ADB invests in projects that may be the subject of stakeholder questions or public debate. ADB’s Safeguard Policy Statement (SPS) notes that ADB will not finance (i) projects that do not comply with the SPS; (ii) projects that do not comply with the host country’s social and

environmental laws and regulations, including laws implementing host country obligations under international law; and

(iii) project activities on the prohibited investments list contained in Appendix 5 of the SPS, which includes the production of or trade in any product or activity deemed illegal under host country laws or regulations, or international conventions and agreements or subject to international phaseouts or bans.

ADB’s Nongovernment Organizations and Civil Society Center (NGOC) and a network of nongovernment organizations (NGO) focal points in field offices support the participation of international and national NGOs and civil society organizations (CSOs) in its operations (Disclosure 102-43).

102-3 Location of the organization’s headquarters

ADB headquarters is in Mandaluyong City, Metro Manila, Philippines.

102-4 Number of countries where the organization operates, and the names of countries where it has significant operations and/or that are relevant to the topics covered in the report

ADB’s region of operations includes 48 of ADB’s 67 members.

At the end of 2017, ADB had operations in 39 of its DMCs located in Central and West Asia, East Asia, South Asia, Southeast Asia, and the Pacific. In 2016, DMCs with significant operations (approvals, excluding cofinancing, over $1 billion) were Azerbaijan, Bangladesh, India, Indonesia, Pakistan, and the People’s Republic of China (PRC). In 2017, DMCs with significant operations (commitments, excluding cofinancing, over $1 billion) were Azerbaijan, Bangladesh, India, Indonesia, Pakistan, the PRC, and Uzbekistan.

In addition to its headquarters located in the Philippines, ADB has 31 field offices comprising 28 resident missions in DMCs and 3 representative offices in donor members. ADB owns the buildings of its headquarters and its resident missions in Bangladesh and India. At the end of 2017, field offices in Bangladesh, India, the PRC, and Viet Nam had more than 50 staff positions.

ADB’s Annual Reports, Annual Portfolio Performance Reports, and Statements of Operations for 2016–2017 and the 2018 Information Statement provide further details of ADB’s operations in 2016–2017, including approvals, commitments, and staff positions in field offices broken down by DMC.

ADB established the ADB Institute (ADBI), located in Tokyo, Japan, to complement its development activities. ADBI conducts high-level research on issues with strategic implications for development and policy making in Asia and the Pacific region to identify effective development strategies. It also provides capacity building and training on sound development management for agencies and organizations of DMCs engaged in development activities.

continued on next page

Table continued

4 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-5 Nature of ownership and legal form

ADB is an MDB established in 1966 under the Agreement Establishing the Asian Development Bank (the ADB Charter), which is binding upon its members (who are its shareholders). ADB is currently owned and governed by its 67 members (48 regional members from Asia and the Pacific, providing 63.5% of its capital; and 19 nonregional members from Europe and North America, providing 36.5% of its capital). The membership of ADB reflects the intention of its founders to limit its operations to the Asia and Pacific region, but also incorporate the active participation and financial resources of members outside the region. At the end of 2017, the value of ADB’s subscribed capital was $151.2 billion. Total shareholders’ equity was $50.3 billion.

As an MDB, ADB was created by its members to help its DMCs reduce poverty among their populations and improve their living conditions and quality of life. Therefore, its ownership and legal status differs significantly from that of a commercial bank. ADB’s operations also differ significantly from those of a commercial bank, because ADB focuses on transferring resources from global capital markets to DMCs through government (public sector or sovereign) and private sector (nonsovereign) projects to help its DMCs reduce poverty and improve the quality of life of their people.

As the MDB specializing in Asia and the Pacific, ADB operates under its Charter (the Agreement Establishing the Asian Development Bank), its By-Laws, the Rules of Procedure of its Board of Governors, and the Rules of Procedure of its Board of Directors. ADB’s Charter contains provisions that accord to ADB legal status and certain immunities and privileges in the territories of its members.

ADB’s President is its legal representative.

Other MDBs that are organizationally comparable to ADB include the African Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and the World Bank Group.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 5

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-6 Markets served, includingi. geographic locations

where products and services are offered

ii. sectors servediii. types of customers

and beneficiaries

GEOGRAPHIC LOCATIONS

ADB operates widely in Asia and the Pacific and, at the end of 2017, ADB had operations in 39 of its DMCs. Country partnership strategies are developed in conjunction with the government and become ADB’s platform for designing operations at the country level.

SECTORS SERVED

ADB supports projects related to ADB’s core operational areas (infrastructure, environment, regional cooperation and integration, finance sector development, and education); other areas of operations (health, agriculture, and disaster and emergency assistance); and the drivers of change (private sector development and operations, good governance and capacity development, gender equity, knowledge solutions, and partnerships). These are consistent with the MTR’s 10 strategic priorities to enhance the responsiveness, relevance, and effectiveness of ADB operations and determine its focus leading up to 2020.

CUSTOMERS AND BENEFICIARIES

ADB transfers resources from global capital markets to its DMCs through government (public sector or sovereign) and private sector (nonsovereign) projects and technical assistance. ADB’s customers are its borrowers (clients) which include DMC governments; state-owned and government-owned entities; and the private sector (companies, financial institutions or funds) operating in its DMCs. ADB invests in projects that create economic and development impact, support its DMCs’ to reduce poverty, and improve the quality of life of their people. Thus, its beneficiaries are its DMCs and ultimately the people who benefit from improved living conditions and quality of life.

ADB’s Annual Reports, Annual Portfolio Performance Reports, and Statements of Operations for 2016–2017 and the 2018 Information Statement provide further details on ADB’s operations in 2016–2017, including approvals and commitments by DMC, sector, and sovereign and nonsovereign operations.

continued on next page

Table continued

6 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-7 Scale of the organization, including

(i) total number of employees

(ii) total number of operations

(iii) net sales (for private sector organizations) or net revenues (for public sector organizations)

(iv) total capitalization (for private sector organizations) broken down in terms of debt and equity

(v) quantity of products or services provided

STAFF (refer to the section on “Engaging the Workforce” in the Asian Development Bank Sustainability Report 2018)

By the end of 2017, ADB had a total of 3,134 staff members across headquarters and its 31 field offices. Of this, 2,349 staff (75%) were based in its headquarters and 785 (25%) were based in field offices. Table 102-7a provides a breakdown of staff by region and gender.

Table 102-7a: Total Staff by Region (Location) and Gender, 2016–2017

Location 2016 2017

Women Men Total Women Men TotalHeadquarters (Manila)

1,442 897 2,339 1,457 892 2,349

Central and West Asia

66 97 163 72 108 180

South Asia 76 137 213 81 130 211Pacific 37 33 70 38 35 73Southeast Asia 110 90 200 110 98 208East Asia 64 28 92 67 30 97Other Regional Field Offices

3 2 5 3 2 5

Nonregional Field Offices

6 4 10 6 5 11

Total 1,804 1,288 3,092 1,834 1,300 3,134

Note: Includes staff on special leave without pay.

Source: Asian Development Bank.

OPERATIONS (refer to the section on “Financing Development and Managing Risks” in the Asian Development Bank Sustainability Report 2018)

Table 102-7b shows the total number (project count) of approvals and commitments (excluding cofinancing) by type for 2016–2017.

Table 102-7b: Number of Approvals and Commitments by Type, 2016–2017

(excluding cofinancing)

TypeApprovals Commitments

2016 2017 2016 2017Loans 125 103 106 111Grant 31 19 27 24Guarantee 2 3 1 1Equity Investment 4 9 4 8Technical Assistance 225 256 235 246Total 387 390 373 390

Note: Loans and grants include policy-based support. Source: Asian Development Bank.

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 7

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

REVENUE

ADB’s total revenue comes from interest and charges on its loans; interest on investments; and income from guarantees, equity investments, and other sources. Total revenue from all sources (e.g., loans, guarantees, equity investments, debt securities, investments, and other sources) was $1.5 billion in 2016; and $2.6 billion in 2017. Table 102-7c provides a breakdown of revenue on loans, guarantees, equity investments, and other debt securities by country.

Table 102-7c: Revenue by Country, 2016–2017($ million)

Country 2016 2017Bangladesh 32 122China, People’s Republic of 294 379India 211 337Indonesia 152 212Pakistan 67 175Philippines 75 108Viet Nam 40 119Others 219 541Total 1,090 1,993

Note: Revenues are received from loans, guarantees, and equity investments provided to developing member countries, as well as debt securities. In addition to revenues from developing member countries included in this table, ADB also derives revenues from investments, and other sources.

Source: Asian Development Bank.

ASSETS

By the end of 2017, ADB’s total assets were $182 billion.

SHAREHOLDERS

ADB’s members are its shareholders. At the end of 2017, members (shareholders) with over 5% subscribed capital are Australia at 5.786%, Canada at 5.231%, India at 6.331%, Indonesia at 5.446%, Japan at 15.607%, the Republic of Korea at 5.038%, the PRC at 6.444%, and the United States at 15.607%. ADB’s Annual Reports, Annual Portfolio Performance Reports, and Statements of Operations for 2016–2017 and the 2018 Information Statement provide further details of ADB’s operations in 2016–2017, including breakdowns of staff positions in field offices by DMC, approvals and commitments by DMC, and the subscribed capital of its members (shareholders) by country.

Table continued

continued on next page

8 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-8 (i) Total number of employees by employment contract (permanent and temporary), by gender

(ii) Total number of employees by employment contract (permanent and temporary), by region

(iii) Total number of employees by employment type (full-time and part-time), by gender

(iv) Whether a significant portion of the organization’s activities are performed by workers who are not employees (if applicable, a description of the nature and scale of work performed by workers who are not employees)

(v) Any significant variations in the numbers reported for (i), (ii) and (iii) (such as seasonal variations in the tourism or agricultural industries)

(vi) An explanation of how the data have been compiled, including any assumptions made

8 STAFF Table 102-8a provides the total number of staff by employment contract and gender; Table 102-8b provides the total number of staff by employment contract and region; Table 102-8c provides the total number of staff by employment category and gender; and Table 102-8d provides the total number of staff by employment category and region.

All (or 100%) of ADB staff members (whether regular or fixed-term) are full-time employees.

Table 102-8a: Number of Staff by Employment Contract and Gender, 2016–2017

Regular Fixed-Term

2016 2017 2016 2017

Women 1,435 1,456 369 378

Men 936 943 352 357

Total 2,371 2,399 721 735

Source: Asian Development Bank.

Table 102-8b: Number of Staff by Employment Contract and Region, 2016–2017

LocationRegular Fixed-Term

2016 2017 2016 2017

Headquarters 1,789 1,787 550 562

Central and West Asia 125 137 38 43

South Asia 164 171 49 40

Pacific 46 48 24 25

Southeast Asia 160 169 40 39

East Asia 75 76 17 21

Other Regional Field Offices 4 3 1 2

Nonregional Field Offices 8 8 2 3

Total 2,371 2,399 721 735

Source: Asian Development Bank.

Table 102-8c: Number of Staff by Employment Category and Gender, 2016–2017

National and Administrative

Staff International Staff Management

2016 2017 2016 2017 2016 2017Women 1,427 1,432 375 400 2 2

Men 555 559 728 736 5 5

Total 1,982 1,991 1,103 1,136 7 7

Source: Asian Development Bank.

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 9

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Table 102-8d: Number of Staff by Employment Category and Region, 2016–2017

Location

National and Administrative

StaffInternational

Staff Management2016 2017 2016 2017 2016 2017

Headquarters 1,383 1,383 949 959 7 7Central and West Asia 132 139 31 41 0 0South Asia 185 181 28 30 0 0Pacific 51 53 19 20 0 0Southeast Asia 148 148 52 60 0 0East Asia 75 78 17 19 0 0Other Regional Field Offices

3 3 2 2 0 0

Nonregional Field Offices

5 6 5 5 0 0

Total 1,982 1,991 1,103 1,136 7 7Source: Asian Development Bank.

TOTAL WORKFORCE

ADB’s total workforce as detailed in Table 102-8e also includes staff consultants, contractors, and service providers who support staff in operational and organizational activities.

Table 102-8e: Total Workforce, 2016–20172016 2017

Staff 3,092 3,134Staff Consultants 1,541 1,332Contractors and Service Providers (headquarters only) 2,167 2,311Total 6,800 6,777

Source: Asian Development Bank.

ADB employs staff consultants when (i) needed expertise is not available within ADB, (ii) ADB’s staff skills mix needs to be supplemented, (iii) specialized expertise is required for a limited period, and (iv) staff members are not available to deliver a task. Staff consultants may be recruited for only 12 months in any 24-month period. Staff consultants may be appointed on an intermittent or full-time basis. ADB defines the requirements and prepares the terms of reference for a staff consultant. Data on staff consultants is obtained from ADB’s Consultant Management System and covers headquarters and field offices. Based on the Consultant Management System, in 2016, about 35% of staff consultants were female; in 2017, about 33%.

Table continued

continued on next page

10 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

ADB employs contractors and service providers to help deliver cost-efficient and quality administrative services at its headquarters and field offices. ADB’s use of long-term contractors falls into diverse service categories such as facilities management; property control and business resilience; safety and security; food and commercial services; printing, mail, and messengerial; logistics management; transport and business travel; and records management and archives. Data are only available for headquarters-based contractors and service providers, and are based on the issuance of headquarters identification cards during the year. The gender split among contractors and service providers varies by department and office, although the gender split is currently not tracked.

Employment does not vary seasonally.

102-9 A description of the organization’s supply chain, including its main elements as they relate to the organization’s activities, primary brands, products, and services

INSTITUTIONAL SUPPLY CHAIN (refer to the section on “Greening the Institutional Supply Chain” in the Asian Development Bank Sustainability Report 2018)

Goods and/or services for institutional needs are directly procured by ADB in accordance with ADB’s Administrative Order 4.07 on Institutional Procurement and Contract Administration (2016). Contractors and service providers directly engaged by ADB are part of ADB’s supply chain. Except in extraordinary circumstances, contractors and service providers eligible to provide goods and/or services are those from member countries. Contractors and service providers serving ADB’s headquarters are usually based in the Philippines. ADB’s Office of Administrative Services (OAS) manages contractors and service providers who support the operation and maintenance of ADB headquarters. Other departments, offices, and field offices may also manage contractors and service providers. In 2016, ADB processed 1,166 purchase orders for goods and services (62% for goods and 38% for services). The total value of the transactions was $62.175 million ($13.059 for goods and $49.116 million for services).  In 2017, ADB processed 1,595 purchase orders for goods and services (69% for goods and 31% for services). The total value of the transactions was $85.643 million ($13.024 million for goods and $72.618 million for services).

Details of major institutional contracts and purchase orders awarded are available on the ADB website.

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 11

Table continued

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

OPERATIONAL SUPPLY CHAIN (refer to the section on “Operational Procurement” in the Asian Development Bank Sustainability Report 2018)

Individual consultants and consulting entities are directly procured by ADB in accordance with the Procurement Regulations for ADB Borrowers (2017) to provide services for a wide range of assignments including technical assistance project preparation, detailed design, capacity development, policy advice, and research. Consultants directly engaged by ADB are part of ADB’s supply chain. Contracts may be awarded to (i) an ADB member country’s international entities (established or incorporated in the member country), or individuals (citizens of the member country); or (ii) to a borrower or client country’s national entities (established or incorporated in and with a registered office in the borrower or client country), or individuals (citizens of the borrower or client country). Consulting entities may engage subconsultants to deliver the required consultancy services. In 2016, ADB processed 3,829 transactions for consultancy services with a total value of $261.65 million. In 2017, ADB processed 3,634 transactions for consultancy services with a total value of $277.19 million. Details of consultancy services contracts awarded with a value of over $100,000 are available on the ADB website.

The procurement of goods, works, and services under an investment project financed in whole or in part by ADB, or by ADB-administered funds, is carried out by the public or private sector borrower. Responsibility for project implementation and, thus, procurement, award, and administration of contracts under a project rests with the borrower who must follow the Procurement Regulations for ADB Borrowers. Thus, these contractors and consultants are not part of ADB’s supply chain.

continued on next page

12 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-10 Significant changes to the organization’s size, structure, ownership, or supply chain, including

(i) changes in the location of, or changes in, operations, including facility openings, closings, and expansions

(ii) changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organizations)

(iii) changes in the location of suppliers, the structure of the supply chain, or relationships with suppliers, including selection and termination

FINANCIAL CHANGES (refer to the section on “Financing Development and Managing Risk” in the Asian Development Bank Sustainability Report 2018)

Effective 1 January 2017, ADB transferred loans and other assets totaling $30,812 million from the ADF to OCR in accordance with the Board of Governors’ Resolution No. 372 dated 30 March 2015 authorizing the termination of the ADF’s lending operations. This expanded ADB’s lending capacity, enabling it to direct greater resources to its DMC governments, particularly those most in need, as well as to the private sector. It also enhanced ADB’s risk-bearing capacity and strengthened its readiness to respond to future economic shocks and natural hazard events.

The transferred ADF assets comprised loans including accrued interest totaling $27,088 million, and liquid assets totaling $3,724 million. Except for $64 million return of set-aside resources, the rest of the transferred assets was treated as a contribution from ADF to OCR and recognized as a one-time income of $30,748 million in OCR, which, effective 1 January 2017, has been allocated to ordinary reserves, following the adoption of the Board of Governors’ Resolution No. 387 dated 15 March 2017.

No other significant changes occurred during the reporting period.

102-11 Whether and how the organization applies the Precautionary Principle or approach

Principle 15 of the Rio Declaration on Environment and Development introduced the precautionary approach, which states that if an action or policy could harm the public or the environment, and in the absence of scientific consensus that the action or policy is harmful, the burden of proof that it is not harmful falls on those taking action. The principle is applied to all ADB-financed and ADB-administered investment projects, and their components, regardless of the source of funding, as stated in ADB’s Safeguard Policy Statement, which notes that the precautionary approach is a key consideration in environmental planning and management (ADB SPS, page 32, Appendix 1, paragraph 12).

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 13

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-12 A list externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes, or which it endorses

OPERATIONAL (refer to the section on “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018)

ADB has signed memorandums of understanding (MOU) and letters of intent with various multilateral organizations; bilateral organizations; United Nations agencies; other organizations such as NGOs and CSOs; as well as academics and think tanks, as to how parties will cooperate. Directly and in partnership with others, ADB implements many economic, environmental, and social initiatives in relation to its operations. It also subscribes to or endorses numerous external economic, environmental, and social initiatives that are relevant to ADB’s operations.

ADB is committed to aid transparency. ADB has been providing project-level data to the International Aid Transparency Initiative (IATI) since 2013 and the closely watched IATI website now includes key data on 1,380 ADB sovereign projects dating back to January 2006.  ADB continues to improve the data it is providing to IATI, increasing both the frequency of data reporting and the quantity of the data provided. In 2017, ADB started publishing project-level data monthly following the IATI standard, and started providing information on the proportion of commitments allocated to capital expenditures as well as on tenders and contracts awarded. This boosted ADB’s covered adjusted IATI score (a measure of ADB’s overall data disclosure versus its portfolio) from 77 points in early April 2017 to 93 points at the end of 2017, the highest of IATI’s 621 contributors. In 2018, the Aid Transparency Index, an annual exercise that measures the transparency of 45 of the world’s leading donor organizations, ranked ADB in first place. ADB maintained its position in the highest tier of very good, with an improved rating of 98.6%.

In 2006, ADB, together with the African Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, and the World Bank Group, endorsed the Uniform Framework for Preventing and Combating Fraud and Corruption, which are voluntary and nonbinding common principles and guidelines for investigations. These are intended to be used as guidance in conducting all ADB investigations in conjunction with the policies, rules, regulations, privileges, and immunities applicable in the organization. In 2010, ADB, together with the African Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, and the World Bank Group, also endorsed the Agreement for Mutual Enforcement of Debarment Decisions to mutually recognize each others’ debarment decisions to deter and prevent corrupt practices. Membership to the agreement requires ADB to comply with its provisions for cross-debarment.

Table continued

continued on next page

14 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

ADB’s Accountability Mechanism subscribes to the voluntary and nonbinding Principles for Cooperation among Independent Accountability Mechanisms, established in 2013 by the independent accountability mechanisms of international financial institutions to advance opportunities for cooperation.

ADB is a signatory to the Corporate Governance Development Framework which sets out a common approach to addressing corporate governance risks and opportunities, relevant to ADB’s private sector investments.

ORGANIZATIONAL (refer to the section on “Improving Organizational Culture and Resource Management” in the Asian Development Bank Sustainability Report 2018)

In 2016, ADB voluntarily achieved the first level of Economic Dividends for Gender Equality certification.

ADB was the first MDB to voluntarily achieve International Organization for Standardization (ISO) and Occupational Health and Safety Assessment Series (OHSAS) certifications in energy, environment, and health and safety management systems for its headquarters. Certification for ISO 14001 and OHSAS 18001 at the ADB headquarters was in 2003 while ISO 50001 was in 2012. Recertification for all three was achieved in 2017. All three are applied in India Resident Mission, while ISO 14001 and OHSAS 18001 are applied in Bangladesh Resident Mission. In 2015 and 2016, ADB headquarters conducted a third-party audit of its greenhouse gas inventory and established 2013 as its baseline for subscribing to the voluntary ISO 14064 standards. In 2015, ADB also became the first MDB to voluntarily receive ISO 20121 certification for its event sustainability management system. Under its Business Continuity Management Program, ADB has also achieved ISO 22301 (Business Continuity Management System) certification (in 2014) for voluntarily meeting Business Continuity Management requirements and standards.

102-13 A list of the main memberships of industry or other associations, and national or international advocacy organizations

ADB is a member of the NGO International Initiative for Impact Evaluation, Inc. (3ie) since 26 December 2017 with the signing of an MOU. As a member, ADB designates a voting delegate to represent it in all 3ie matters, who can also be selected to serve in the Members Conference Nominating Committee.

ADB is also a member of the Green Bond and Social Bond Principles and Global Emerging Markets Risk Database Consortium.

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 15

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

ADB works through strategic partnerships to accomplish its vision. ADB’s financing and knowledge partnerships include (but are not limited to) those with multilateral organizations including MDBs such as the World Bank Group; organizations with global reach, such as the Organisation for Economic Co-operation and Development (OECD), International Labour Organization (ILO) , and the World Health Organization (WHO); regional organizations such as the Association of Southeast Asian Nations (ASEAN); United Nations agencies; other organizations including NGOs and CSOs such as the WWF; as well as academics and think tanks. ADB also has several bilateral partnerships with aid agencies and governments, such as the Japan International Cooperation Agency (JICA) and the United Kingdom’s Department for International Development (DFID).

ADB sits on the steering committee of various working groups engaged in the harmonization of policies between development finance institutions, including the

(i) Working Group of the Corporate Governance Development Framework (development finance institutions),

(ii) Operational Risk Management Forum (international financial institutions),

(iii) Working Group to Harmonize Project-Level Greenhouse Gas Accounting (international financial institutions),

(iv) Working Group on Adaptation Finance Tracking (international financial institutions),

(v) Working Group for Environment (multilateral financing institutions),

(vi) Chief Risk Officers Forum (MDBs), and(vii) Working Group on Gender Equality (MDBs).

ADB’s Independent Evaluation Department (IED) is a founding member of the Evaluation Cooperation Group established in 1996 by the heads of central evaluation units at MDBs.

ADB’s Accountability Mechanism is a member of the Independent Accountability Mechanisms Network that meets annually.

Strategy102-14 A statement from

the most senior decision-maker of the organization (such as Chief Executive Officer, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy for addressing sustainability

The President’s Statement is included on page vii of the Asian Development Bank Sustainability Report 2018.

Table continued

continued on next page

16 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Ethics and Integrity102-16 A description of the

organization’s values, principles, standards, and norms of behavior

16 VISION

ADB’s vision is an Asia and Pacific region free of poverty.

MISSION

ADB’s mission is to help its DMCs reduce poverty and improve the quality of life of their people.

BOARD VALUES, STANDARDS, AND NORMS

The Board of Governors is subject to the Rules of Procedure of the Board of Governors of the Asian Development Bank (2003) in representing the interests of the members that appointed them. The rules were approved by the Board of Governors who are responsible for adhering to them under the guidance of the Office of the Secretary (SEC). Given that the governors reside in their own countries and are high-ranking officials, and given their high turnover rate, it is not logistically feasible for ADB to provide members of the Board of Governors with training for their role or their rules of procedure.

The Board of Directors (BOD) is governed by the Rules of Procedure of the Board of Directors of the Asian Development Bank (2003) that were approved by the Board of Governors. The BOD is responsible for adhering to the rules under the guidance of SEC. A Code of Conduct (2011) has been adopted by the BOD to set forth principles and ethical standards for the directors, alternate directors, temporary alternate directors, and the President in connection with, or having a bearing upon, their status and responsibilities in ADB. As the directors, alternate directors, and the President are entrusted with responsibilities as prescribed in the Charter, By-Laws, and related documents of ADB, their personal and professional conduct must comply with the standards and procedures set forth therein. Where applicable, the provisions also apply to the President, in both his capacity as Chair of the BOD and as President. Among other things, the Code of Conduct requires directors to maintain the highest standards of integrity in their personal and professional conduct, observe principles of good governance, and not be influenced in their decisions by the political character of the member country concerned. Only economic considerations shall be relevant to their decisions. The BOD is provided with a 4-day induction program on their role and their rules of procedure, the last of which was held in September 2017. The term of the current BOD is from 1 July 2017 to 30 June 2019.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 17

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

The BOD established the Ethics Committee and developed procedures (2011) that apply to ethical matters relating to application of the Code of Conduct (including Guidelines on Gifts and Entertainment; Access During Investigations to Records, E-mails, and Documents; and Form and Content of Allegations). Briefings for the BOD on the role of the Ethics Committee and their responsibilities for adhering to the Code of Conduct are conducted as required. The briefings are conducted by ADB’s general counsel. In 2016 there were no briefings. In 2017, a briefing was provided alongside the BOD induction program in September 2017. Upon a director’s assumption into office, SEC also arranges for briefings on (i) BOD business activities, processes, and practices; BOD administration matters and BOD travel; document circulation and management; eBoard; editing; and the Annual Meeting of the Board of Governors, (ii) security matters, shipping, vehicle, and other logistics matters; (iii) insurance plans, dependency allowance, medical and dental clinics, rental subsidy (housing assistance and education benefits, staff retirement plan, payroll and financial matters; (iv) official and nonbusiness travel, and travel benefits; and (v) telecommunications and information technology services.

STAFF VALUES, STANDARDS AND NORMS (refer to the section on “Anticorruption and Integrity and Workforce Integrity” in the Asian Development Bank Sustainability Report 2018)

ADB’s staff values are set out in its staff Code of Conduct (Administrative Order 2.02, 2017) as follows: respect for clients; professionalism; work ethics and integrity; respect for diversity; commitment to achieving poverty reduction in Asia and the Pacific through development effectiveness; collaboration; and responsibility.

continued on next page

Table continued

18 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

ADB requires staff members to maintain a high degree of integrity, conduct themselves in a manner befitting their status as international civil servants, and act in ADB’s institutional interest in their work. Upon appointment, each staff member affirms in writing that he or she will carry out responsibilities in a manner that will further the purpose of ADB, abide by the Staff Regulations, and accept no instruction in performing their duties from any government or authority external to ADB. Staff members are also required to annually certify that their actions comply with, among others, the following:

(i) Staff Regulations approved by the BOD; (ii) Staff Code of Conduct (2017) approved by Management;(iii) ADB’s Anticorruption Policy (1998) approved by the BOD and

available in different languages; and (iv) ADB’s Integrity Principles and Guidelines (2015) approved by

the BOD and available in different languages.

Staff must declare whether they or their immediate family members have any assets or interests that might reflect unfavorably on ADB, or that might be in actual or apparent conflict with their duties as staff. The staff Code of Conduct requires that “staff will conduct themselves at all times in a manner befitting their status as employees of an international organization. Staff must always bear in mind the reserve and tact incumbent upon them by reason of their international functions. They are required to exercise the utmost discretion in regard to all matters, particularly those matters that may adversely affect ADB or its reputation.” The Head of the Office of Anticorruption and Integrity (OAI) is responsible for developing and maintaining the Staff Regulations and staff Code of Conduct in consultation with the Budget, Personnel, and Management Systems Department (BPMSD) and the Office of the General Counsel; as well as developing and maintaining ADB’s Anticorruption Policy and Integrity Principles and Guidelines.

BPMSD briefs new staff members on ethical work behavior to promote awareness and understanding of ADB’s rules governing staff conduct. The briefing is mandatory for all staff and gives an overview of the rules governing staff conduct and expected standards of behavior. OAI also conducts briefings as necessary on ethical and professional conduct and respect at work. A mandatory e-learning course on Anticorruption and Respect at Work needs to be completed by all staff. Heads of departments and offices are responsible for fostering a work environment that is consistent with the staff values and for ensuring that their staff are aware of the staff Code of Conduct. They are also required to lead by example and use reasonable care to supervise compliance by their staff.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 19

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Governance102-18 (i) Governance

structure of the organization, including committees of the highest governance body

(ii) Committees responsible for decision making on economic, environmental, and social topics

ADB is owned and governed by its members, which are its shareholders. ADB’s governance structure consists of the Board of Governors, the BOD, the President, and the Management team.

BOARD OF GOVERNORS

The Board of Governors is the highest governance body. All of ADB’s shareholders (its 67 members) are represented on the Board of Governors. Each member appoints a governor and an alternate governor in accordance with Article 27 of ADB’s Charter. The governor and alternate governor are usually the member’s minister of finance, central bank governor, or an official of similar rank and serves at the member’s pleasure. Members of the Board of Governors serve without remuneration from ADB. The Board of Governors meets once a year, at ADB’s Annual Meeting, to provide guidance on ADB administrative, financial, and operational directions. Each Annual Meeting is chaired by a governor chosen from among the members, and is selected at the previous Annual Meeting, per ADB’s Rules of Procedures of the Board of Governors, and who is not an executive officer at ADB. Meetings of the Board of Governors may also be called when requested by five members in accordance with Article 29(1) of ADB’s Charter. A majority of the governors shall constitute a quorum for any meeting if it represents not less than two-thirds of members’ total voting power.

The ADB Charter vests all the powers of ADB in the Board of Governors, which in turn delegates these powers to the BOD, except for those powers reserved for the Board of Governors, such as (i) admitting new members; (ii) increasing or decreasing authorized capital; (iii) suspending a member; (iv) deciding appeals from interpretations or applications of the Charter; (v) authorizing the conclusion of general agreements for cooperation with other international organizations; (vi) electing the BOD and the President; determining the remuneration of the BOD and their alternates, and the salary of the President (Disclosure 401); (vii) approving the auditor’s report, the general balance sheet, and the statement of profit and loss; (viii) determining the reserves and the distribution of the net profits; (ix) amending the Charter; and (x) deciding to terminate the operations of ADB and distribute its assets. Occasionally, they may determine which members are regarded as developed or developing countries or members. The Board of Governors retains full power to exercise authority over any matter delegated to the BOD.

continued on next page

Table continued

20 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

The Board of Governors has established the Governors’ Committee on Remuneration. The Chair of the Board of Governors approves membership in the Committee on Remuneration after considering geographic balance. The committee normally meets every year to review the remuneration of the ADB’s BOD (including alternate directors), based on developments since the last review; and to consider whether sufficient grounds exist to recommend an adjustment in such remuneration. Once every 2 years, the committee also reviews the adequacy of the President’s remuneration. If the committee deems that an adjustment is necessary, it submits a report, together with a draft resolution recommending the adjustment, to the Board of Governors for consideration. No consultant is involved in the periodic review.

BOARD OF DIRECTORS

The 12 members of the BOD, which is based in ADB headquarters, are elected by the Board of Governors. As per the ADB Charter, members elect eight from the Asia and Pacific region, and four from outside the region (Europe and North America). The nominating government screens the qualifications of each director. Three of the 12 are appointed by single members having the largest number of shares; the rest are elected by the governors of the groups of members they represent. Each BOD director appoints an alternate. The directors are elected by the governors for a 2-year term (starting on 1 July and ending 2 years after on 30 June), and may be reelected. The term of the current BOD is from 1 July 2017 to 30 June 2019.

The BOD meets formally as needed (43 times in 2016 and 42 times in 2017) to oversee ADB’s work. Because the BOD represents ADB’s members, it plays a vital role in ensuring the implementation of their guidance. The BOD is responsible for the overall direction of ADB’s operations. The BOD supervises the preparation of ADB’s financial statements for approval by the Board of Governors. It approves the administrative budget and work program as well as staff salaries and benefits. It also reviews and approves all policy documents, and all investment and technical assistance operations.

The BOD’s work includes but is not limited to reviewing (i) the economic, social, and environmental impacts of ADB’s operations prior to approval of projects and policies; and the performance of ADB’s administration and corporate management; (ii) prior to approval, all loans and guarantees and their environmental and social implications; (iii) all policies; (iv) the work of the ADB Accountability Mechanism; and (v) corporate functioning. Therefore, the BOD reviews the total sustainability of ADB’s operations from the level of policy formulation, to consideration and approval of projects, to the review of project outcomes.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 21

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

The BOD has established six committees pursuant to ADB’s By-Laws to facilitate its oversight of ADB’s operations: the Audit Committee, Board Compliance Review Committee, Budget Review Committee, Development Effectiveness Committee, Ethics Committee, and Human Resources Committee. Committee members and chairs are drawn from the BOD with appointments made by the President in consultation with the BOD. There is no formal voting in committees and it is the role of the chair to determine the outcome of committee meetings and report to the BOD. The BOD does not have a sustainability committee; instead, relevant environment, social and governance issues are addressed between the six committees.

(i) The Audit Committee assists the BOD in fulfilling its Charter-mandated responsibility of ensuring that ADB’s financial reporting and internal controls, including audits, are adequate and undertaken efficiently.

(ii) The Board Compliance Review Committee fulfills specific functions under ADB’s Accountability Mechanism, including clearing the proposed terms of reference and time frame for the Compliance Review Panel to conduct a compliance review authorized by the BOD, and reviewing the draft reports prepared by the panel.

(iii) The Budget Review Committee reviews the annual ADB administrative budget proposed by Management for the coming year in the Work Program and Budget Framework and the institutional business plan for which the budget is proposed, to examine whether BOD-approved policies and strategies are effectively and efficiently incorporated. Subsequently, the full BOD meets to consider the budget for approval.

(iv) The Development Effectiveness Committee assists the BOD in ensuring that ADB’s programs and activities are achieving desired development objectives and making efficient use of ADB resources, focusing its attention on ADB’s operations evaluation programs and results. ADB’s Independent Evaluation Department reports to the BOD through the Development Effectiveness Committee, which oversees the department’s evaluation program and reviews its results to strengthen the institutional focus on evaluation.

(v) To ensure sound governance pursuant to the Code of Conduct for the members of the BOD and the President, the Ethics Committee assists the BOD in addressing ethical matters concerning their duties as directors, alternate directors, and temporary alternate directors.

(vi) The Human Resources Committee is a means by which the BOD provides guidance regarding human resources management in ADB. Its primary responsibility includes reviewing, monitoring, and making recommendations to the BOD regarding ADB’s human resources strategy and policies.

continued on next page

Table continued

22 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

The President. The President of ADB chairs the BOD and is elected by the Board of Governors for a term of 5 years. The President does not vote except to break a tie. The President is the legal representative of ADB and is responsible for managing staff and conducting ADB’s operations under the direction of the BOD. In his speeches at the Annual Meeting, the President shares ADB’s accomplishments of the past year and the tasks ahead. The following departments report directly to the President: Office of the Special Project Facilitator, Department of Communications, Office of the Auditor General, Office of Anticorruption and Integrity (OAI), Strategy and Policy Department, Office of Public–Private Partnership, and the Office of the Ombudsperson.

Management Team. ADB Management is placed underneath the President, as set out in ADB’s organizational structure. The President heads the Management team comprising six vice-presidents, who supervise the work of ADB’s departments responsible for operations, finance and risk management, administration and corporate management, and knowledge and sustainable development.

Stakeholder Engagement102-40 A list of stakeholder

groups engaged by the organization

ADB consults and collaborates with a wide range of stakeholders, from governments to individuals, during the development of ADB’s policies, strategies, and country partnership strategies (CPSs); during project preparation, implementation, and evaluation; and through the economic, environmental, and social initiatives ADB undertakes in relation to its operations and organizational activities. The key stakeholders include

• ADB members (shareholders), who are represented by the BOD and Board of Governors;

• ADB’s public and private investors;• the public sector (national, regional, and local governments and

government agencies as well as state-owned and government-owned entities in DMCs with ADB operations);

• the private sector (companies, financial institutions, or funds involved in nonsovereign operations);

• organizations and institutions with which ADB has established financing or knowledge partnerships (Disclosures 102-12 and 102-13);

• NGOs, CSOs, advocacy groups;• academics and think tanks;• youth of DMCs;• indigenous peoples’ communities;• project beneficiaries (local communities who benefit from the

outputs of ADB-funded projects);• project-affected persons (local communities including

disadvantaged and vulnerable groups who may be adversely impacted by ADB-funded projects);

• ADB’s consultants, contractors and service providers, and other suppliers;

• ADB’s staff members and their dependents;• ADB’s former staff and their dependents; and • the media.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 23

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-41 Percentage of total employees covered by collective bargaining agreements

8 None (0%) of ADB’s employees are covered by a collective bargaining agreement.

ADB has a Staff Association, the objectives of which are to foster a sense of common purpose among members in promoting the aims and objectives of ADB; and to promote and safeguard the rights, interests, and welfare of its members. The Staff Association acts as a channel of communication between members and ADB Management, keeping its members informed about developments affecting their interests; studying the problems and difficulties of members and critical areas of Management–staff relations and recommending solutions; and formulating proposals that promote general staff welfare, among other things, for presentation to Management. Although the Staff Association advocates for its members and seeks to safeguard their rights, interests, and welfare, it is not a trade union and so does not engage in collective bargaining with ADB’s Management. Commitments are formalized in the Staff Association Constitution.

Employees automatically become members of the Staff Association when they begin employment, regardless of nationality or the country in which they are based. Although members may withdraw from the Staff Association, only four employees have done so, and the membership at end of 2017 comprised 99.87% of all staff from headquarters and field offices. Staff Association members elect 12 representatives, including two from field offices, to the Staff Association’s governing body (the Staff Council). The Staff Council serves as the communication conduit between, and facilities discussions on matters of interest to, its members with ADB’s Management.

102-42 The basis for identifying and selecting stakeholders with whom to engage

In relation to the economic, environmental, and social initiatives ADB undertakes in relation to its operations and organizational activities, relevant stakeholders are identified by responsible departments and offices as set out in Disclosure 102-43.

Relevant stakeholders to engage during the development of ADB’s policies, strategies, and CPSs; and during project preparation, implementation, and evaluation are identified by responsible departments and offices in accordance with the Public Communications Policy (PCP) and through internal analysis and discussion. Guidance on identifying stakeholders as well as information and tools that ADB staff and stakeholders can use to effectively implement participatory approaches is provided in the following publications: • Strengthening Participation for Development Results: A Staff Guide

to Consultation and Participation, • the Civil Society Organization Sourcebook: A Staff Guide to

Cooperation with Civil Society Organizations, • the Handbook on Poverty and Social Analysis, • Environment Safeguards: A Good Practice Sourcebook,• Involuntary Resettlement Safeguards: A Planning and

Implementation Good Practice Sourcebook, and • Indigenous Peoples Safeguards: A Planning and Implementation

Good Practice Sourcebook.

continued on next page

Table continued

24 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-43 The organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process

Under the guidance of the Department of Communications (DOC), ADB engages with its stakeholders through social media and multimedia; traditional face-to-face communications such as meetings, briefings, and presentations; and community media such as posters, leaflets, and brochures. ADB uses language and media appropriate to the target audiences and translates documents as needed.

ADB recognizes the rights of its stakeholders to seek, receive, and impart information about its operations. The Public Communications Policy (2011), approved by the BOD and which DOC has oversight of, seeks to enhance stakeholders’ trust in and ability to engage with ADB. Therefore, ADB discloses information unless there is a compelling reason for nondisclosure, which is subject to a set of limited PCP exceptions. ADB discloses institutional, financial, and project-related information, including safeguards documentation, proactively and within set time frames on its website. Since establishing the PCP, ADB has worked to expand and accelerate access to information, retain the presumption in favor of disclosure, and increase emphasis on public communications with a wide range of stakeholders.

Sustainability Report. Internal stakeholder engagement was undertaken as discussed in Disclosure 102-46. External stakeholder engagement was not undertaken specifically for the preparation of the Asian Development Bank Sustainability Report 2018. However, the Sustainability Report seeks to respond to key topics and concerns stakeholders raised during the reporting period, primarily during the ADB Annual Meetings and through the Strategy 2030 consultations as discussed in Disclosure 102-44.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 25

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

General (all interested stakeholders). Given the breadth and depth of ADB’s work, ADB consults and collaborates with a wide range of stakeholders (Disclosure 102-40), many of whom are engaged during each Annual Meeting, whether by direct participation, social media, or involvement in its planning and organization. Each year, the profile of accredited stakeholders attending the Annual Meeting changes depending on the meeting’s location. The location is decided by the Board of Governors following an invitation from an ADB member to host the Annual Meeting in a specified year. Stakeholder opinions have previously been measured by the ADB Perceptions Survey, which was last completed in 2012 and published in 2013.

ADB’s website is one of the most important tools for sharing knowledge about ADB’s activities and publishing the impacts of its operations. The ADB website (www.adb.org) was made more user-friendly, notably for mobile devices, and logged nearly 3.4 million users in 2016 and almost 3.3 million in 2017. The most-viewed web pages were the careers section and projects section. In 2017, ADB received 3,653 requests for information through the inquiry form on its website, of which 90% (3,273) had been answered by the end of the year. ADB acknowledged 81% of the answered requests within the required 5 days and responded to 96% within the required 20 days. The largest number of requests were for project information, and most of the requesters came from the private sector (further details are available in ADB’s Public Communications Policy Annual Reports for 2016–2017). ADB denied seven requests, because the information requested fell under the PCP’s disclosure exceptions. Six of the denied requests were on ADB bond issues, which were considered financially sensitive. The other denied request was for a draft Annotated Guide to the ADB Charter, which was considered deliberative information and subject to attorney–client privilege. In 2017, ADB’s Public Disclosure Advisory Committee—the first, internal layer of a two-stage appeals process—received one appeal for information. The appeal related to the request to disclose the draft Annotated Guide to the ADB Charter in the public interest. The committee upheld the original decision to withhold the document from disclosure.

continued on next page

Table continued

26 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Policy and Strategy (members, public sector, private sector, partners, NGOs, CSOs, and other interested stakeholders). ADB engages stakeholders in the development, review and evaluation of its safeguard, sector, and thematic policies and strategies. This engagement is vital to ensure that policies reflect international best practice and incorporate the opinions and needs of those they intend to support. The participation process builds understanding and ownership of the policies and eases implementation. Examples of ADB papers that have been prepared with extensive  Accountability Mechanism Policy, (ii) Public Communications Policy, (iii) Safeguard Policy Statement; and (iv) the MTR (summary of stakeholder consultations).

Country Partnership Strategy (public sector, private sector, development partners, NGOs, CSOs, and other interested stakeholders). The 2015 Guidelines for the Preparation of Country Assistance Program Evaluations and Country Partnership Strategy Final Review Validations describe how stakeholder consultation should be undertaken during report preparation. A country assistance program evaluation is conducted prior to a new CPS, although not all CPSs are preceded by one. The CPS process is also participatory, involving consultations with government officials, development partners, NGOs and CSOs, and the private sector. This is to ensure that ADB has a complete understanding of the DMC’s development challenges and local perspectives on how to address them; and that the CPS is aligned with the country’s priorities and harmonizes with other approaches of other funding agencies. The Country Partnership Strategy Guidelines specify how stakeholder consultation should be undertaken during CPS formulation. Country assistance program evaluations and validations of CPS final reviews, which assess the performance of ADB support to a country, include consultations with the country development partner to evaluate sector performance and a survey of stakeholder perceptions on ADB’s performance.

Knowledge and Regional Cooperation Initiatives (public sector, private sector, development partners, NGOs, CSOs, and other interested stakeholders). ADB regularly uses regional and national conferences and other events to share its knowledge products and exchange views with government officials and other key audiences. For example, ADB participates in regional forums (e.g., the ASEAN+3 and World Cities Summit), during which DMCs may request support from ADB.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 27

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Project Preparation, Implementation and Evaluation (public sector, private sector, development partners, NGOs, CSOs, indigenous peoples’ communities, project beneficiaries, project-affected persons, and other interested stakeholders). The Public Communications Policy guides knowledge sharing and participatory development through two-way communications with affected people and project beneficiaries. The policy requires that projects develop a stakeholder communication strategy to support two-way communication with stakeholders. Engagement with affected people and other interested stakeholders (often including CSOs) is maintained throughout the project cycle. The Safeguard Policy Statement requires consultation for projects with environmental, involuntary resettlement, and impacts on indigenous peoples. The analysis of stakeholder interests, perceptions, capacities, and resources is also an important initial step in designing a project, especially for any project that relies on participation by project beneficiaries and affected persons, as set out in the Handbook on Poverty and Social Analysis. Consultation and information disclosure continues during project implementation (as set out in safeguards plans) with a project-level grievance redress mechanism established to enable affected persons to raise their concerns with the borrower (client) and seek resolution. Operations departments are responsible for resolving the concerns of project-affected persons in the first instance. The Accountability Mechanism provides a channel of last resort for project-affected people to resolve issues pertaining to negative impacts from projects where ADB may be at fault.

Members. All ADB shareholders (its 67 members) are represented on the Board of Governors and provide their views on ADB’s operations through their representatives and the BOD. The Board of Governors meets once a year, at ADB’s Annual Meeting, and adopts resolutions on specific matters brought to them either at an Annual Meeting or through electronic voting. The BOD provides feedback to and from its members (shareholders) to ADB’s Management. SEC arranges the meetings of the Board of Governors and the BOD and acts as the channel of communication between them.

continued on next page

Table continued

28 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Public and Private Investors. ADB’s Treasury Department supports ADB’s engagement with public and private investors.

CSOs, Advocacy Groups, NGOs, and Youth. ADB’s NGO and Civil Society Center supports NGO, CSO and youth participation in ADB’s operations; details of ADB’s engagement activities are available in its Annual Reports for 2016–2017.

Academics and Think Tanks. ADB’s Economic Research and Regional Cooperation Department serves as network organizer and secretariat for the ADB-Asian Think Tank Network. ADB has also established formal cooperation agreements with academic and research institutions: for example, it has signed an MOU with the Lee Kuan Yew School of Public Policy.

Suppliers (consultants, contractors and service providers, and other suppliers). ADB’s Procurement, Portfolio and Financial Management Department together with OAS support ADB’s dissemination of information about business opportunities.

Staff. ADB Today, which is ADB’s primary internal communication tool for disseminating information to its staff, is a daily newsletter sent via e-mail and available online to staff in headquarters and field offices. Urgent and important news is disseminated through ADB Today Extra. ADB Avenue, an internal communication site available to staff members via the myADB portal (intranet site), provides insights on key institutional issues, behind-the-scenes stories, and special features on colleagues. Digital signage—large screens around ADB headquarters—feature news, announcements, ADB videos, and e-banners on current events and activities. ADB’s most recent staff engagement survey was conducted in 2015 with the next survey to be conducted in 2018.

Former Staff. The Association of Former Employees of ADB, which maintains its own website, acts as a conduit for former staff to keep in touch with each other and keep abreast of activities at ADB.

Media. ADB’s DOC disseminates press releases on ADB projects, programs, knowledge products, and events and connects new and traditional media participants with ADB experts through press briefings, individual interviews, op-eds, and blogs. It also arranges visits to ADB projects for local and international media. Press releases are further disseminated through resident missions (often in local language) and through social media and ADB’s global media alert system.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 29

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-44 Key topics and concerns that have been raised through stakeholder engagement, including

(i) how the organization has responded to those key topics and concerns, including through its reporting; and

(ii) the stakeholder groups that raised each of the key topics and concerns

At the Annual Meetings, the President’s closing statements summarize the topics and concerns raised by members during the course of the Annual Meeting (ADB’s Summary of Proceedings of the Annual Meeting of the Board of Governors for 2016 and 2017 provide further details of the topics and concerns that were raised by members (Tables 102-44a and 102-44b).

For the development of Strategy 2030, extensive consultations have been held with a wide range of stakeholders including development experts, scholars, NGOs, CSOs, and DMCs. Key topics and concerns raised in relation to Strategy 2030 are set out in the summaries of stakeholder consultations. A draft of Strategy 2030 was published on the ADB website in April 2018 for comment.

Borrower’s (client’s) safeguard documents (e.g. Environmental Impact Assessments) disclosed on the ADB website detail the key topics and concerns raised by project beneficiaries and affected persons on projects with environmental, involuntary resettlement, and/or indigenous peoples impacts, identified through “meaningful consultation” undertaken in accordance with the Safeguard Policy Statement.

Table 102-44a: Topics and Concerns Raised at the 2016 Annual Meeting

Topics and Concerns Raised by Members ADB’s Response

Asian economy and reform efforts. Many developing member countries (DMCs) are undertaking important reforms and efforts should continue.

To realize DMCs’ full growth potential, ADB plans to maintain sound macroeconomic policies; invest more in infrastructure, human capital, and technology; develop efficient financial markets; and improve the investment climate.

Stronger financing capacity and scaling up operations. ADB will have increased financing capacity from the ordinary capital resources (OCR)–Asian Development Fund (ADF) merger and ADF 12.

ADB plans to ensure that lower-income DMCs benefit most from the merger. It believes in the importance of a results-based approach and regular assessments of outcomes based on solid data, including through independent reviews and involvement of civil society organizations. ADB will remain efficient and effective, making best use of its staff and budget.

Poverty reduction. Maintain a strong focus on reducing poverty and addressing growing inequality.

ADB is committed to the Sustainable Development Goals and gives priority to fragile and conflict-affected DMCs. It continues to help create quality jobs, paying attention to good working conditions and core labor standards. ADB has expanded its work on gender equality in its operations; and has increased its support in the health and education sectors, social protection, and effective conditional cash transfers. The successful ADF replenishment will increase ADB’s capacity to provide grants to the region’s lower-income DMCs by 70%. ADB will also increase substantially concessional lending from OCR.

continued on next page

Table continued

30 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Topics and Concerns Raised by Members ADB’s Response

Climate change action. The Asia and Pacific region, especially the Pacific island countries, is highly vulnerable to climate change. At the same time, as economies are growing, the region has a vital role to play in global mitigation efforts. Many ADB governors emphasized the role of ADB in supporting the Paris Agreement on climate change.

ADB is strongly committed to helping its DMCs meet their Nationally Determined Contributions under the Paris Agreement on climate change through loans and grants, policy dialogue, and capacity building efforts. Rapid urbanization in Asia provides important opportunities for climate actions. ADB has committed to double its climate financing to $6 billion by 2020 from the 2014 level of $3 billion. Of the $6 billion, $4 billion will support mitigation and $2 billion will be for adaptation. ADB is also putting in place a new strategic framework to guide its support for Nationally Determined Contributions. ADB will help its DMCs access various climate funds, including the Green Climate Fund.

Responses to economic and disaster shocks. ADB needs to provide prompt support to DMCs affected by cyclical economic downturns, contingent on their sound macroeconomic policies, reform efforts, and active discussion between the International Monetary Fund (IMF) and DMCs.

Acknowledging these concerns, ADB plans to continue to respond quickly to calls for support in the wake of disasters triggered by natural hazard events. Mainstreaming the ADF’s disaster response facility will enhance its capacity to respond in lower-income DMCs. ADB will also support disaster risk reduction efforts, including through the disaster risk reduction facility newly created under ADF 12. Furthermore, ADB will explore innovative approaches such as the disaster insurance mechanism, and a special contingent facility that can be drawn down in response to disasters.

Private sector development. Private sector is the key to growth and stability.

ADB’s private sector operations have increased rapidly in recent years and will constitute 25% of its total market-based OCR operations by 2020. In 2015, it introduced a faster and streamlined business approach to support small projects that are mostly in the least developed and small economies.

Effectively catalyzing greater private sector resources for infrastructure and other development needs is critical. ADB is strengthening its work for public–private partnerships and plans to improve the investment climate through policy-based lending and technical assistance.

Infrastructure finance and high-level technology. ADB operations should have demonstrable impacts through good projects that can be replicated by DMCs. ADB should pay increased attention to maintenance cost and life cycle.

Infrastructure financing will continue to be ADB’s major focus. In doing so, it plans to collaborate closely with other financing partners, including the Asian Infrastructure Investment Bank with which it has signed a memorandum of understanding for deeper cooperation. Safeguards for social and environmental impacts will remain indispensable components of ADB operations. To promote the use of cleaner and more advanced technologies in its projects, ADB is adjusting project designs and procurement procedures.

Technical experts will play a greater role in the early stages of the project cycle to ensure that the most appropriate high-level technologies are used.

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 31

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Topics and Concerns Raised by Members ADB’s Response

Project implementation. There is a need to improve project implementation and disbursements and to deliver outcomes faster. Unless loans and grants are disbursed, they have no impact on development.

ADB shares in this concern and is working hard to improve project readiness. It has streamlined its procurement review process to speed up project implementation. For small Pacific island DMCs, there are now simplified systems of project implementation adapted to local conditions. ADB will make greater use of country systems and improve the quality of consultants and contractors. It will continue to strengthen the resident missions by providing them greater authority and outposting more staff, and will help build the capacity of implementing agencies.

Knowledge work. DMCs do not just want financing, they also need ADB’s knowledge and cross-country experiences.

ADB has established seven sector groups and eight thematic groups to provide leadership in its knowledge work, support operational departments, and build partnerships with centers of excellence and other development partners.

Human resources. Skilled and motivated staff are essential to provide good services to DMCs through projects and knowledge work. Gender balance should be improved.

ADB is committed to merit-based and transparent recruitment and promotion with due attention to geographical balance. ADB makes every effort to hire, retain, and promote more women and is promoting a respectful workplace. ADB aims to make the best use of existing talent. To that end, it plans to increase the mobility of staff across departments and between headquarters and resident missions to broaden staff perspectives and enhance their potential. To keep staff skills up to date, ADB is investing more in staff development.

Strategy 2030. There should be strong support for its preparation. The importance of close consultations with all stakeholders including civil society organizations should be stressed.

Strategy 2030 will define ADB’s approach to the Sustainable Development Goals and the Paris Agreement on climate change. It will also elaborate on its approaches to upper-middle-income countries and regional cooperation and integration.

Fifty Years of ADB. 2016 marked ADB’s 50th anniversary, providing an opportunity to reflect on what has been accomplished and how ADB can become stronger, better, and faster.

At the time of its 49th Annual Meeting, ADB was preparing a publication on ADB’s 50 years of partnership with its members, and about Asia’s remarkable development experiences over this period. It also launched its ADB@50 campaign to reach out to people in its DMCs, including its host country, the Philippines.

Source: Asian Development Bank.

continued on next page

Table continued

32 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Table102-44b: Topics and Concerns Raised at the 2017 Annual Meeting

Topics and Concerns Raised by Members ADB’s Response

ADB at 50. ADB’s 50th anniversary was an opportunity to celebrate ADB’s half century of development work in Asia and the Pacific—to collectively reflect how the region has grown over the past 5 decades, how ADB has contributed to the region’s growth and development, and what role ADB should play in the future.

Strong stakeholder support over the past 5 decades has been key to establishing ADB as the premier international financial institution in the region. ADB plans to continue to evolve to stay responsive to the changing needs and aspirations of its developing member countries (DMCs).

Support for poorest and fragile countries, and inclusiveness. While progress in Asia has been impressive, the battle against poverty is not over yet.

Reducing poverty will remain ADB’s major focus. ADB will continue to prioritize the needs of the poorest and the most fragile countries, including small Pacific island DMCs. Growing inequalities are a major concern; hence, ADB intends to enhance its support for addressing inequality across groups and regions. Strengthening financial inclusion and supporting inclusive business will be integral components of ADB’s approach to deepen inclusiveness.

Continued strong support for infrastructure development

ADB will continue to play a key role in mobilizing the vast resources needed for infrastructure development in the region. Asia will need $1.7 trillion per year in infrastructure investments through 2030. To help meet this large infrastructure deficit, ADB will scale up by increasingly using high-level technology in infrastructure, vigorously pursuing its commitment to climate finance, and actively promoting public–private partnerships.

Mobilizing private sector resources. ADB needs to crowd in larger private sector financing to support the region’s development, especially for infrastructure.

ADB places a strong emphasis on public–private partnerships. In its private sector operations, ADB plans to expand its guarantee operations, equity investments, and cofinancing. The ordinary capital resources(OCR)-Asian Development Fund merger allows ADB to further leverage these resources. ADB’s experience in the past 50 years demonstrates that both public and private sector investments by ADB help crowd in private sector resources and activities by preparing necessary infrastructure and creating a conducive policy environment.

Expanding private sector operations. There is a need to scale up ADB’s private sector operations.

ADB assures all its stakeholders of its deep commitment to increase its private sector operations to 25% of regular OCR operations by 2020. It intends to expand such operations in lower-income DMCs. ADB is expanding staff resources for its Private Sector Operations Department to facilitate this scale-up.

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 33

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Topics and Concerns Raised by Members ADB’s Response

Climate change and disaster risk reduction actions. There is an urgent need to address climate change.

ADB is on track toward meeting its ambitious financing target of $6 billion for climate change by 2020 and continues to pay special attention to the challenges facing the Pacific island DMCs, particularly in adaptation. ADB is actively supporting its DMCs’ access to concessional resources, including from the Green Climate Fund, and providing policy advice and capacity building support to its DMCs for their Nationally Determined Contributions. ADB will increase its support to prevent and reduce risks from disasters triggered by natural hazard events.

Lifting social development. There is a need to create jobs and support human capital development, and better prepare the region to meet the challenges of an aging population.

ADB will increase support for universal health coverage, technical and vocational education and training, and social protection.

Strengthening gender equality. Achieving gender equality remains a key agenda in many DMCs.

ADB has further strengthened gender mainstreaming in its projects and will continue to proactively pursue gender equality outcomes across all operations. It will design projects that help women and girls secure higher skills, better health, more jobs, and a larger voice in decision making.

Improving governance. It is important to address governance and institutional challenges.

ADB will continue to support structural and sector reforms to strengthen governance and support capacity development. Both project- and policy-based assistance will be deployed to support governance and institutional improvements in DMCs.

Supporting different needs of DMCs. ADB needs to be responsive to the diversity of DMCs and their changing needs, including expanded support for Pacific DMCs; support for regional public goods, climate change, and the environment; and policy reforms for boosting private sector led growth in upper-middle-income DMCs. It is important to support DMCs in economic distress through a countercyclical support facility.

Depending on country circumstances, ADB will use an appropriate combination of project lending, results-based lending, and policy-based lending. It closely coordinates with the International Monetary Fund (IMF) and other development partners for policy-based lending.

Deepening regional cooperation and integration. There is strong support for ADB’s role on regional cooperation and integration.

This is a core ADB mandate. ADB continues to deepen its regional economic cooperation initiatives, coordinate closely with other existing and emerging regional cooperation platforms, and facilitate South–South cooperation that supports knowledge transfer and expertise among DMCs.

Expanding knowledge support. ADB should provide effective knowledge solutions and expertise, along with expanded lending assistance.

ADB is strengthening its capacity to provide knowledge solutions, and to support innovation and the integration of high-level technology in project design. ADB’s sector and thematic groups have been mainstreamed into its organizational structure and assigned roles critical for ADB operations.

Table continued

continued on next page

34 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Topics and Concerns Raised by Members ADB’s Response

Procurement and project implementation reforms. Reforms should be pursued to improve responsiveness and streamline procedures.

ADB has approved a new procurement framework to reduce overall procurement time, improve the quality of procurement outcomes, and strengthen the procurement delivery system. It will continue to strengthen resident missions by providing them greater authority, and outposting more staff. ADB also continues to uphold the highest levels of environmental and social safeguards in all its projects and is increasingly looking to use country systems.

Human resources reforms. Highly skilled and motivated staff are critical to deliver quality financing operations and value-adding knowledge services to DMCs. There are concerns about the sustainability of the staff pension plan and support for its reform.

ADB will continue its efforts to attract, retain, and motivate a highly talented and diverse workforce. It plans to strengthen gender balance of staff at all levels, including for senior positions. ADB will continue to pursue utmost efficiency in its administrative budget and achieve value for money.

Cofinancing and partnerships. Partnerships are vital for expanding cofinancing and leveraging knowledge and expertise.

ADB acknowledges these concerns. It will continue to strengthen cofinancing efforts with its private, bilateral, and multilateral financing partners, including new institutions such as the Asian Infrastructure Investment Bank and the New Development Bank. ADB will also enhance its partnership with think tanks, civil society organizations, and innovative private sector companies.

Strategy 2030. The new ADB strategy should focus on reducing poverty and inequalities, implementing the Sustainable Development Goals, and promoting climate actions. There is support for ADB’s continued DMC focus, its differentiated approaches to engaging DMCs based on their development needs, and its comparative advantage.

ADB will balance the need to be selective to ensure its effectiveness and the need to be responsive to DMCs’ priorities. Strategy 2030 will have a strong emphasis on achieving results and development effectiveness. ADB will continue to have an inclusive and meaningful consultative process as it develops Strategy 2030 and finalizes it in 2018.

Source: Asian Development Bank.

Table continued

continued on next page

GRI 102—General Disclosures, 2016 Edition 35

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Reporting Practice102-45 (i) A list of all entities

included in the organization’s consolidated financial statements or equivalent documents

(ii) Whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report

ADB is the sole entity included in its financial reports and covered by the Sustainability Report. It has no subsidiaries. Although the Annual Reports state that ADBI is a subsidiary body of ADB, ADBI does not qualify for consideration as a true subsidiary for this Sustainability Report because it does not financially differentiate itself from ADB’s other Special Funds except for being physically located in Tokyo, Japan.

ADB’s Annual Reports, Annual Portfolio Performance Reports, and Statements of Operations for 2016–2017 and the 2018 Information Statement provide further details of ADB’s operations in 2016–2017. The financial reports included in ADB’s Annual Reports are not “consolidated,” and fund sources are reported separately in accordance with ADB’s Charter.

102-46 (i) An explanation of the process for defining the report content and the topic boundaries

(ii) An explanation of how the organization has implemented the Reporting Principles for defining report content

Also:When compiling the information specified in Disclosure 102-46, the reporting organization shall include an explanation of how the Materiality principle was applied to identify material topics, including any assumptions made

Refer to the section on “Materiality and Completeness” in the Asian Development Bank Sustainability Report 2018.

The four reporting principles of the GRI Sustainability Reporting Standards (stakeholder inclusiveness, materiality, sustainability context, and completeness) have been considered in defining the Asian Development Bank Sustainability Report 2018 content. Reporting for disclosures is in relation to all ADB’s operations (e.g., investments, technical assistance, and knowledge products, broken down for purposes of reporting by the focus of ADB’s sector and thematic groups); and organizational activities (e.g., human resources, energy, environment, and health and safety management for ADB’s headquarters and field offices). This is to enable stakeholders to assess ADB’s sustainability performance. Limitations regarding reported data are noted in the individual disclosures.

The GRI Sustainability Reporting Standards define materiality as “topics that reflect the reporting organization’s significant economic, social, and environmental impacts, or substantively influence the assessments and decisions of its stakeholders.” Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank 2008–2020 and its MTR provided the framework for identifying ADB’s material topics, to ensure alignment between its overarching strategy and the Sustainability Report. Material topics and their boundaries were identified and prioritized through a series of internal workshops (to which focal points from all departments and offices across ADB were invited) held in December 2017. During the workshop, each material topic was discussed in terms of the focal points’ views on stakeholder relevance and interest; potential for ADB’s operations and organizational activities to have significant economic, social, and environmental impacts; sustainability context; and availability of information to report. Focal points, liaising with other departmental or office staff as needed, were given the opportunity to validate the list of material topics before the Sustainability Report was finalized, and to comment on drafts and the final version of the Sustainability Report.

continued on next page

Table continued

36 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-47 A list of the material topics identified in the process for defining report content

Refer to the section on “Materiality and Completeness” and Table 1.3 in the Asian Development Bank Sustainability Report 2018.

102-48 The effect of any restatements of information given in previous reports, and the reasons for such restatements

ELECTRICITY, FLOOR AREA, AND BUILDING OCCUPANCY CALCULATIONS

Minor corrections were made to the electricity consumption figures previously reported for 2013, 2014, and 2015. The floor area prior to and following the extension of ADB headquarters has been recalculated following the Leadership in Energy and Environmental Design (LEED) methodology, and covered parking areas and unoccupied areas of the headquarters extension were excluded from the total. This resulted in a smaller floor area than previously reported, slightly altering electricity and emission intensity calculations previously reported by floor area. Building occupancy now includes non-ADB staff in headquarters, which means that the 2016–2017 intensity calculations cannot be directly compared to previous years.

102-49 Significant changes from previous reporting periods in the list of material topics and topic boundaries

These new disclosures were added: Procurement Practices, Water, Freedom of Association and Collective Bargaining, Child Labor, Forced Labor, and Local Communities.

These disclosures from GRI’s G4 Guidelines and the G4 Financial Services Sector Guidelines were deleted as ADB is now following the GRI Sustainability Reporting Standards: Products and Services, Environmental Grievance Mechanisms, Transport, Labor Practices Grievance Mechanisms, Human Rights Grievance Mechanisms, Grievance Mechanisms for Impacts on Society, Product and Services Labeling, Product Portfolio, and, Audit and Active Ownership. However, previous content is now reported, as required, under relevant Management Approaches.

102-50 Reporting period for information provided

2016–2017 (calendar years)

102-51 Date of most recent previous report (if any)

2016 for year 2015

102-52 Reporting cycle The reporting period has now reverted to once every 2 years. An annual report was produced in 2016 covering the 2015 calendar year. Previously, the Sustainability Report was issued in 2007 for 2005–2006, 2009 for 2007–2008, 2011 for 2009–2010, 2013 for 2011–2012, and 2015 for 2013–2014.

102-53 The contact point for questions regarding the report or its contents

Daniele Ponzi, Chief, Environment Thematic Groupsustainabilityreport@adb.org

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 37

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-54 The claim made by the organization, if it has prepared a report in accordance with the GRI Standards, either:“This report has been prepared in accordance with the GRI Standards: Core option”, or“This report has been prepared in accordance with the GRI Standards: Comprehensive option”

The Asian Development Bank Sustainability Report 2018 and detailed GRI Content Index were prepared in accordance with the GRI Sustainability Reporting Standards: Core option.

102-55 (i) The GRI content index, which specifies each of the GRI Standards used and lists all disclosures included in the report

(ii) For each disclosure, the content index shall include:(a) the number of

the disclosure (for disclosures covered by the GRI Standards);

(b) the page number(s) or URL(s) where the information can be found, either within the report or in other published materials;

(c) if applicable, and where permitted, the reason(s) for omission when a required disclosure cannot be made.

This document is the detailed GRI Content Index accompanying the Asian Development Bank Sustainability Report 2018 available at www.adb.org/documents/asian-development-bank-sustainability-report-2018.

continued on next page

Table continued

38 Asian Development Bank 2018 Sustainability Report

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

Also:When reporting the GRI content index as specified in Disclosure 102-55, the reporting organization shall:(i) include the words

“GRI Content Index” in the title;

(ii) present the complete GRI content index in one location;

(iii) include in the report a link or reference to the GRI content index, if it is not provided in the report itself;

(iv) for each GRI Standard used, include the title and publication year (e.g., GRI 102: General Disclosures 2016);

(v) include any additional material topics reported on, which are not covered by the GRI Standards, including page number(s) or URL(s) where the information can be found

continued on next page

Table continued

GRI 102—General Disclosures, 2016 Edition 39

GRI Standards Code GRI Standards Content

SDG Tag ADB Response (2016–2017)

102-56 (i) A description of the organization’s policy and current practice with regard to seeking external assurance for the report

(ii) If the report has been externally assured:(a) A reference to

the external assurance report, statements, or opinions. If not included in the assurance report accompanying the sustainability report, a description of what has and what has not been assured and on what basis, including the assurance standards used, the level of assurance obtained, and any limitations of the assurance process;

(b) The relationship between the organization and the assurance provider;

(c) Whether and how the highest governance body or senior executives are involved in seeking external assurance for the organization’s sustainability report

The Asian Development Bank Sustainability Report 2018 has not been externally assured.

Financial reports included in the 2016–2017 Annual Reports, which informed the Asian Development Bank Sustainability Report 2018, were externally audited by Deloitte and Touche LLP, Singapore. Details of the audit fees for 2016–2017 are included in the 2018 Information Statement.

ADB’s 2016 greenhouse gas inventory, as discussed in Disclosure 305, was subject to third party verification by TÜV SÜD. The 2017 greenhouse gas emissions data is indicative, subject to third party verification.

GRI = Global Reporting Initiative, SDG = Sustainable Development Goal.Source: Asian Development Bank.

Table continued

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

201 Economic Performance, 2016 Edition 201 Economic

performance – management approach

Refer to the sections on “Financing Development and Managing Risks,” “Leveraging Cofinancing,” and “Managing Results and Evaluating Performance” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Economic performance is inherently (internally) material because raising financing and cofinancing is critical for ADB to fulfill its vision of an Asia and Pacific region free of poverty. As a triple-A borrower, strong credit fundamentals support ADB’s ability to raise funds through international capital markets to finance its ordinary capital resources operations.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

ADB manages its economic performance in accordance with the following policies and procedures. These ensure that ADB’s funds are used for their intended purpose, so that ADB can continue to effectively transfer adequate resources from global capital markets to help DMCs reduce poverty among their populations, and improve their living conditions and quality of life.

Commitment, Goals, and Targets. ADB’s Charter (the Agreement Establishing the Asian Development Bank) (1996) requires that (i) decision making for all ADB investment projects should entail due attention to considerations of economy and efficiency, and (ii) that ADB’s operations be guided by sound banking principles.

The Midterm Review (MTR) of Strategy 2020 was approved by ADB’s Board of Directors (BOD) in 2014. It assessed the existing and emerging challenges for its developing member countries (DMCs) and mapped out ways in which ADB can better serve all its members. The MTR identifies 10 strategic priorities to enhance the responsiveness, relevance, and effectiveness of ADB operations and determine their focus leading up to 2020. Five of these priorities and their key actions (i.e., middle-income countries, private sector development and operations, financial resources and partnerships, delivering value for money in ADB, and organizing to meet new challenges) as set out in the MTR Action Plan, Appendix 1, directly relate to ADB’s economic performance.

GRI 200: Economic Topics

continued on next page

GRI 200—Economic Topics 41

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Levels 3 and 4 of ADB’s Corporate Results Framework approved by the BOD under its structured program of Managing for Development Results encompass ADB’s overall targets directly related to economic performance management.

Financial and Risk Management Policies, Procedures, and Responsibilities. ADB’s Operations Manual sets out policies (approved by the BOD) and procedures to be followed for the financial and project administration of sovereign and nonsovereign operations including cofinance. The procedures for staff administering ADB investments and technical assistance are set forth in the Project Administration Instructions (approved by Management), as well as the Loan Disbursement Handbook (2017) and Technical Assistance Disbursement Handbook (2010), which compile ADB’s disbursement policies, guidelines, procedures, and practices. The four pillars of efficient disbursement operations are (i) funds flow structure, (ii) disbursement arrangement, (iii) staff capacity and systems, and (iv) internal controls. ADB’s Controller’s Department is responsible for maintaining ADB’s accounting systems, preparing its financial reports, and authorizing disbursements and other payments.

ADB seeks to ensure that its investments in government (public sector or sovereign) and private sector (nonsovereign) projects are financially viable and sustainable, and that borrowers (clients) have the capacity to perform their obligations under a legal agreement. ADB offers loans based on the London interbank offered rate (LIBOR) and local currency loans to its borrowers (clients). However, ADB can only offer the local currency loans in selected DMCs where it has secured all relevant approvals to access the local capital market. In choosing financial terms, a loan profile is structured to accord with the needs and risk exposure of the investment project and the borrower’s (client’s) overall external debt portfolio. ADB gives due consideration to the currency of the loan, interest rate, loan repayment terms, loan charges, and other debt management features to make available more flexible terms. ADB does not participate in debt rescheduling agreements for sovereign investments but conversion provisions can be used by a borrower (client) after loan effectiveness to review its currency choice and interest rate structure subject to the Loan Regulations and the Conversion Guidelines. The Loan Regulations and Conversion Guidelines set out the procedures for requesting, accepting, and effecting conversions as specified in a loan agreement. ADB also offers its DMCs, and entities fully guaranteed by DMCs, debt management products such as interest rate swaps and cross currency swaps (including local currency swaps) for their third party liabilities.

continued on next page

Table continued

42 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Financial due diligence is required to ensure that ADB’s investment projects are financially viable, and that appropriate action is taken by operations departments regarding significant financial risks. Risk assessments and management plans are prepared for all country systems related to public financial management, procurement, and combating corruption. The risk assessment for country systems should inform the preparation of risk assessments for work in ADB sectors, which should in turn inform the design of all ADB projects and programs prior to approval of an investment. The Operations Manual (section G2) sets out the policy and procedures for operations departments undertaking financial due diligence. Management considers the results of financial due diligence in approving an investment project for submission to the BOD. Operations departments are responsible for monitoring and managing their investments, with the director general of the department responsible for ensuring the quality of their department’s work. The Private Sector Operations Department monitors and manages nonsovereign investments until repayment. If the transaction is deemed to be at risk, the responsibility for monitoring and managing is transferred to the Office of Risk Management. Details of every ADB project are disclosed on the ADB website, including all financial intermediary projects and equity investments—although certain borrower (client) confidential information may be redacted in the disclosed documents due to confidentiality.

Corporate governance assessment of equity investments in private sector entities is undertaken in line with ADB’s commitment as a signatory to the development finance institutions’ Corporate Governance Development Framework (a common approach addressing corporate governance risks and opportunities in investments) using tools developed by the International Finance Corporation (IFC). For management of equity investments in private equity funds, in accordance with the Operations Manual (section D10, paragraph 54), ADB may appoint a qualified representative from the Private Sector Operations Department or Office of Risk Management to the entity’s advisory committee or board, when permitted under fund legal documentation. The representative will participate in advisory committee events and annual partners and/or shareholder meetings. In doing so, the ADB representative will protect the financial and developmental interests of ADB and discharge functions to achieve ADB’s investment objectives. All documents received will be held in the investment project’s credit file and all interactions with the private sector entity will also be documented.

continued on next page

Table continued

GRI 200—Economic Topics 43

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Liquidity and Capital Management Policies, Procedures, and Responsibilities. ADB’s borrowing proceeds are used to finance its ordinary capital resources operations. ADB’s Treasurer executes funding opportunities in various currency, bond, and financial markets to raise cost-efficient funds as part of ADB’s annual borrowing program. This includes Green Bonds, issued in accordance with ADB’s Green Bond Framework, which was subject to a second opinion from CICERO. ADB’s investment strategy was approved by the BOD in 2016 with the aim of ensuring the optimal level of liquidity and capital preservation. Subject to this objective, ADB seeks to maximize its total return on investments. ADB invests its liquidity portfolio in government and nongovernment securities, including bonds issued by other multilateral institutions and multilateral development banks (MDBs) and other government-sponsored corporations. Because ADB invests in securities, not stocks, it does not hold the right to vote. ADB’s investment strategy stipulates that internal and external asset managers are to exercise due diligence in their investment selection with appropriate consideration for responsible corporate behavior and exercise socially responsible investing. The liquidity portfolio is subject to a prohibited environmental and social investment list, approved by the BOD as part of the investment strategy and applied by ADB’s Treasury Department. These and other risk management provisions are embodied in the Treasury Risk Management Guidelines (2016) approved by Management. Following a socially responsible investment policy, Treasury seeks to buy green bonds in the management of its liquidity portfolios and would also buy thematic issuances opportunistically.

Business Continuity Policies, Procedures, and Responsibilities. ADB’s ISO 22301-certified Business Continuity Management program seeks to ensure that ADB can recover and resume its critical processes (such as disbursement of funds) in the event of a disaster, including typhoons and earthquakes, which could restrict access to ADB headquarters or the movement of ADB personnel. In March 2016, an Organizational Resilience Unit was created under the Office of Administrative Services (OAS) to lead and manage resilience at ADB. The unit developed ADB’s organizational resilience framework to help ADB prepare for and respond to disruption-related risks (including disasters caused by natural hazard events or because of human action) and strengthen its capacity to adapt to complex and changing circumstances without compromising its ability to fulfill its mission. The framework outlines a set of actions to be undertaken in 2016–2021 to make ADB a more resilient organization. It enables ADB to maintain operations throughout a disruptive event and to coherently address instances of uncertainty and change using appropriate resources. 

continued on next page

Table continued

44 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program. The BOD Budget Committee reviews the budget and work program on which it is based, and formulates an independent report to the BOD. Subsequently, the BOD meets to consider budget approval. Departments and offices have portfolio performance targets based on the Work Program and Budget Framework. These targets are cascaded to department or office divisions and their staff. Staff have annual deliverables set as part of their personal work program. Both portfolio and staff’s annual deliverables are monitored and assessed at the end of each year.

Grievances. Disclosure 205 sets out the grievance process related to anticorruption and integrity issues. Economic performance grievances that are not eligible for consideration by the Office of Anticorruption and Integrity (OAI) are dealt with by the relevant department or office.

Evaluation. The Auditor General reports directly to the President and undertakes internal audits of ADB’s internal controls, governance, and risk management processes in accordance with the Operations Manual (section L2).

The BOD Audit Committee assists the BOD in overseeing ADB’s finances, accounting, internal control, and risk management (including information and communication technology (ICT) systems and reputational risk), and anticorruption and integrity, to check how these are being managed and how accountabilities are being enforced. In accordance with its work program, the Audit Committee meets with responsible departments and offices, including the Auditor General and the external auditor (currently Deloitte & Touche LLP, Singapore). The Controller’s Department and OAI report at least quarterly to the Audit Committee. The external auditor can communicate directly with the Audit Committee to report any issues that it identifies. The Audit Committee submits an annual report to the BOD. The annual report reviews progress on the implementation of previous recommendations and provides recommendations for improvement.

continued on next page

Table continued

GRI 200—Economic Topics 45

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach. The Development Effectiveness Review (DEfR) conducted annually by the Strategy, Policy, and Review Department on behalf of Management and approved by the BOD uses the Corporate Results Framework (aligned with the priorities of Strategy 2020 and the MTR Action Plan) to track recent development progress in Asia and the Pacific and assess ADB’s development effectiveness, identifying areas where ADB’s performance in achieving its strategic priorities requires strengthening. The 2016 DEfR was the fourth and final report under the 2013–2016 corporate results framework. The 2017 DEfR was the first annual report under ADB’s transitional results framework, 2017–2020. It includes analysis of results from across the four levels of the corporate results framework and discusses successes, challenges, actions, and remaining issues to be addressed.

The Annual Portfolio Performance Report produced on behalf of Management complements the DEfR by providing a more focused and in-depth analysis of its sovereign and nonsovereign portfolios. It sets out the composition of, and illustrates trends in, the portfolios by approvals, commitments, disbursements, sector, country, and modality; assesses the quality and performance of each portfolio; and identifies key findings.

201-1 Direct economic value generated and distributed

2, 5, 7, 8, 9

Operations and Revenue. Refer to Disclosures 102-4 and 102-7.

Operating Costs, Staff Wages, and Benefits. ADB’s Annual Reports, Annual Portfolio Performance Reports, and Statements of Operations for 2016–2017 and the 2018 Information Statement provide further details on ADB operations in 2016–2017, respectively, including details on (i) its total borrowing and other related expenses, consisting of interest expenses and other related expenses such as amortization of issuance costs, discounts, and premiums on bonds and related derivatives; and (ii) internal administrative (covering the operation of the Board of Governors and BOD, operational expenses, and administrative expenses), including staff wages and benefit payments.

Payments. As an MDB, ADB differs significantly from a commercial bank. It does not provide dividends to its members (shareholders) and under Article 56 of its Charter, ADB is exempt from tax and duty.

Community Investment. ADB operations seek to help its DMCs reduce poverty among their populations and improve their living conditions and quality of life; thus, no separate community investment program is established although staff are encouraged to take time off from work to participate in volunteer community service activities that help improve the quality of life in communities where ADB operates. Refer to the section on “Community Involvement” in the Asian Development Bank Sustainability Report 2018.

continued on next page

Table continued

46 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

201-2 Financial implications and other risks and opportunities due to climate change

13 Refer to the sections on “Financing Development and Managing Risks” and “Climate Change and Disaster Risk Management” in the Asian Development Bank Sustainability Report 2018.

ADB’s DMCs and its infrastructure-related investment operations are at risk from the physical impacts of climate change. ADB’s research Meeting Asia’s Infrastructure Needs estimates climate mitigation costs for the region at $200 billion annually, with the costs of climate proofing infrastructure in three areas (power, transport, water and sanitation) estimated at $41 billion annually. In addition, climate adaptation will require significant investment in irrigation and food security, disaster risk management, flood and coastal protection, and climate proofing. Climate adaptation directly affects ADB investments but represents only one component of total adaptation financing requirements. Thus, billions of dollars are needed for the Asia and Pacific region to transition to a clean, low-carbon path while adapting to the adverse impacts of climate change.

ADB has various climate change programs and initiatives that improve access to and create incentives for financing and investments, aiming to help make mitigation and adaptation actions more competitive and affordable for its DMCs.

The MTR identifies environment and climate change as one of ADB’s 10 strategic priorities, with key actions set out in Appendix 1. ADB’s Climate Change Operational Framework 2017–2030 (CCOF2030) was approved by the President in 2017 to help strengthen its support to DMCs in meeting their climate commitments and building their resilience to climate change and disaster. The CCOF2030 positions ADB to facilitate, collaboratively and proactively, a regional shift toward a low greenhouse gas emissions and climate-resilient development path. The CCOF2030 provides guidance across all ADB sector and thematic groups to strengthen climate actions, operationalizing ADB’s commitment to provide at least $6 billion per year in climate change financing from its own resources by 2020. It outlines actions and the institutional measures to be implemented to enable ADB to meet the climate needs of its DMCs. Appendix 1 of the CCOF2030 includes the results framework (goals and targets) for its climate change operations.

Together with the African Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, and the World Bank Group, ADB agreed to joint principles and a methodology for tracking and reporting its climate finance and has applied these since 2011. The amount of carbon emissions avoided compared to a business-as-usual scenario is recorded for every project and disclosed on the “Project At a Glance” page in each report and recommendation of the President submitted to the BOD.

continued on next page

Table continued

GRI 200—Economic Topics 47

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Climate-risk management is mandatory for all (100%) of ADB projects. All ADB projects are subject to preliminary climate risk screening via a mandatory checklist. For projects assessed at medium- or high-risk based on the checklist, a more detailed and context-sensitive climate change vulnerability and risk assessment (CVRA) is required. ADB has codeveloped with Acclimatise UK an online climate- and multi-hazard risk screening tool (AWARE for Projects) that categorizes climate risk with respect to 14 potential impacts of climate change. For projects assessed as medium- or high-risk using AWARE (or an equivalent screening tool), a CVRA is conducted. A dedicated window of ADB’s internal Climate Change Fund provides grants to conduct CVRAs. The results of the screening and/or the CVRA are included in the report and recommendation of the President and, in many cases, specific recommendations for implementing climate change risk management measures are incorporated in the project design.

The approximate costs of “climate-proofing” ADB investments (essentially the costs of neutralizing climate change impacts on the performance, structural integrity and/or service lifetime of ADB investments) has averaged about 5% over the period 2011–2016. Climate change adaptation finance as a percentage of total approvals from ADB resources for 2016–2017 is presented in Table 201-2. For 2020, the target for climate change adaptation finance is $2.0 billion.

Table 201-2: Climate Change Adaptation Finance Approvals, 2016–2017

Item 2016 2017Climate change adaptation finance ($ million) 1,081 930Climate change adaptation finance as a share of total approvals from ADB’s own resources (%)

6 5

Source: Sustainable Development and Climate Change Department, Asian Development Bank.

During 2016–2017, IED published Development Effectiveness, Natural Disasters, and Climate Change, Mitigating the Impacts of Climate Change and Natural Disasters for Better Quality Growth, and Climate Change and Natural Disasters: Transforming Economies and Policies for a Sustainable Future, which identified the following risks to and opportunities for ADB operations in relation to climate change and disaster risk:

continued on next page

Table continued

48 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

• Human actions in climate mitigation and adaptation and disaster prevention are needed to avoid major catastrophes and reduce the costs of climate change. The Sustainable Development Goals acknowledge a strong link between human well-being and environmental and ecosystem services. The impact of global warming is visible in the rising threat from climate-related natural disasters. Intense floods, storms, droughts, and heat waves have profound implications for development interventions in the Asia and Pacific region.

• Impacts of natural disasters are seldom factored into the determinants of development effectiveness. This is partly because calamities are considered purely natural phenomena outside the scope of policy interventions. Dealing with natural disasters is still largely considered a cost to be borne after calamity strikes, rather than an investment to confront a growing threat. Disaster risk reduction accounts for just $0.40 for every $100 in total international development aid. For governments, a worthy level of spending for climate change and disaster risk is 1%–2% of national budgets. However, more important than the exact percentage is promoting the effective use of this spending.

• Prevention strategies and disaster risk reduction need to be prioritized. If development gains are to be protected, preventative measures need to play an important role in managing disaster risk, along with responses in recuperation. Relief and reconstruction are taken into account, but prevention and preemptive actions are underemphasized. Evaluations by ADB and the World Bank highlighted the crucial role of prevention in dealing with hazards of nature. 

• Policy responses also need to take account of the increasingly anthropogenic nature of hazardous events. Human actions are influencing not only exposure and vulnerability but also the hazards themselves through high-carbon activities. Global efforts are essential in switching to a low-carbon path. Innovations in clean energy and energy efficiency are increasingly required.

• Opportunities exist for growth and environmental policies to support and reinforce each other. First, disaster resilience needs to be built into national growth strategies, both for prevention and recovery. Return on investments is clearly demonstrated in countries with the foresight to adopt this strategy. Japan invests some 5% of its national budget on disaster risk reduction and has avoided worse economic damage and deaths. Returns are also evident even with lesser investments. Second, policymakers need to raise the priority of urban management as a strategic thrust. Many of Asia’s major cities are overcrowded and in vulnerable geographic settings. Third, climate action needs to be a central component of national plans. These include developing resilient communities and peoples, and climate mitigation.

ADB headquarters and field offices are at risk from the physical impacts of climate change.

continued on next page

Table continued

GRI 200—Economic Topics 49

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Several studies have been conducted to assess the likely impacts of climate change on Metro Manila, Philippines, where the headquarters is located. The Japan International Cooperation Agency (JICA) study on the Impacts of Climate Change upon Asian Coastal Areas: The Case of Metro Manila (2010) and its Study of Water Security Master Plan for Metro Manila and its Adjoining Areas (2013) found that the physical impacts of climate change in Manila, such as increasing rainfall intensity and storm surge associated with typhoons and sea level rise, may result in catastrophic urban flooding. Extreme heat events are also likely to increase. ADB headquarters is not directly exposed to the worst of these impacts considering its location; design of its buildings; and redundancy in the provision of power, water, and other services. ADB headquarters is located at approximately 50 meters elevation above the Pasig River, which is the primary flood conveyance channel in Metro Manila; thus, fluvial flooding is extremely unlikely to affect it directly. ADB is also located along the primary mass rail transit line, so access can be maintained even during potential episodes of street flooding due to drainage problems.

Still, under its Business Continuity Management program (Disclosure 201), ADB regularly conducts business impact analysis and risk assessment to identify the risks, threats, and vulnerabilities to ADB’s operations. Although the assessment does not specifically consider climate change, it includes physical threats, such as earthquakes; and risks that could accompany climate change impacts, such as increased severity and frequency of typhoons and flooding. Due to ADB’s location, these could restrict access to the headquarters building or movement of personnel.

201-3 Defined benefit plan obligations and other retirement plans

All (100%) of ADB’s staff members are enrolled in the defined benefit portion of the ADB Staff Retirement Plan (SRP) with the benefits varying depending on the date of hire, length of service, and salary level.

ADB ensures the viability of the SRP and is committed to maintaining it on an ongoing basis. The SRP is valued actuarially on an annual basis, and the SRP fund assets earn a return and receive contributions each year. In terms of financial management, ADB funds its liabilities from its ordinary capital resources. If additional funding is deemed necessary, the Pension Committee makes recommendations to Management and the BOD for additional funding. The Pension Committee members are typically the President, a vice-president, two directors, the Chair of the Investment Committee, one pensioner’s representative and an alternate (nominated by the Association of Former Employees of the Asian Development Bank), one staff member and an alternate (appointed by the President), one staff member and an alternate (representing the international staff), one staff member and an alternate (representing the national staff and administrative staff), the Treasurer, and the Controller.

continued on next page

Table continued

50 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 201-3 shows the 2016–2017 actuarial valuation of funding ratios (SRP fund assets as compared to SRP liabilities).

Table 201-3: Actuarial Valuation of Funding Ratios of the Staff Retirement Plan

(%)Year Past Service

Based on AMVA Based on MVA2016 96.1 95.72017 104.4 106.8

AMVA = adjusted market value of assets, MVA = market value of assets.Note: As of 30 September.Source: Budget, Personnel, and Management Systems Department, Asian Development Bank.

SRP participants appointed before 1 October 2006 contribute 9.33% of their base salary to the SRP fund. Participants who joined ADB on or after 1 October 2006 do not contribute to the SRP, and they accrue pension at a lower rate. ADB’s contribution to the SRP fund is determined at a rate sufficient to cover the part of the costs of the pension plan not covered by the participants’ contributions. The ADB contribution rate budgeted for 2017 was 23% of the base salary for all participants.

SRP participants may voluntarily supplement their defined benefit portion by setting aside savings individually. Participants appointed before 1 October 2017 can do this by contributing to discretionary benefits, with a guaranteed return on their contributions. Participants appointed after 1 October 2017 are entitled to participate in a Defined Contribution Plan. They can make contributions into the Defined Contribution Plan on top of their defined benefit portion of the SRP (up to the initial salary cap of $100,000). Every $8 of contribution is matched with $1 by ADB (until Defined Contribution Plan contributions exceed 12% of salary). ADB also pays into the Defined Contribution Plan contributions of 20% on salary in excess of the initial salary cap. Voluntary participation in the Defined Contribution Plan is also open to other staff members appointed before 1 October 2017, with no ADB matching of contributions.

ADB’s career web pages provide additional information on benefits, and ADB’s Annual Reports for 2016–2017 and its 2018 Information Statement provide further details regarding pension liabilities.

continued on next page

Table continued

GRI 200—Economic Topics 51

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

201-4 Financial assistance received from government

ADB transfers resources from global capital markets to its DMCs, which includes mobilizing support through cofinancing operations (official, other concessional, and commercial cofinancing). Under official cofinancing, ADB and one or more donor governments finance an investment project either jointly or in parallel. In 2016–2017, ADB approved and/or committed project-specific, administered grant cofinancing from members (Table 201-4a) and received commitments to trust funds from the members (Table 201-4b). To prevent double counting, projects funded from trust funds are not included in Table 201-4a.

Table 201-4a: Sources of Project-Specific Grant Cofinancing, 2016–2017 ($ million) 

APPROVALS COMMITMENTSCofinancing Member 2016 2017 2016 2017Australia 50.64 45.58 15.76 78.46Austria 0.00 1.14 0.00 1.14Canada 0.00 15.00 0.00 15.00Finland 22.34 0.00 0.00 22.34France 1.54 0.00 0.54 1.00Germany 0.00 0.04 0.00 0.04Japan 3.00 0.00 0.00 3.00Korea, Republic of 0.00 0.14 0.00 0.14New Zealand 4.40 13.10 6.67 5.60Norway 39.46 0.00 0.00 39.46Switzerland 4.50 1.00 0.00 1.00United Kingdom 58.20 29.46 126.77 19.38United States 10.00 1.46 1.96 11.46Total 194.07 106.92 151.70 198.02

Source: Office of Cofinancing Operations, Asian Development Bank.

continued on next page

Table continued

52 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 201-4b: Trust Fund Contributions, 2016–2017($ million)

Trust Fund Donor 2016 2017Total

CommitmentAfghanistan Infrastructure Trust Fund

Germany 0.00 86.89 86.89

Japan 1.50 0.00 1.50

United States 40.00 0.67 40.67

Asia-Pacific Climate Finance Fund Germany 0.00 33.31 33.31

Asia-Pacific Project Preparation Facility

Australia 7.10 0.00 7.10

Canadian Climate Fund for the Private Sector in Asia II

Canada 0.00 149.49 149.49

Clean Energy Fund under the Clean Energy Financing Partnership Facility

Norway 2.50 4.84 7.34

Cooperation Fund for Project Preparation in the Greater Mekong Subregion and in Other Specific Asian Countries

France 0.50 0.00 0.50

Domestic Resource Mobilization Trust Fund

Japan 0.00 2.00 2.00

e-Asia and Knowledge Partnership Fund

Korea, Republic of

14.50 15.00 29.50

High-Level Technology Fund Japan 0.00 19.57 19.57

Japan Fund for Poverty Reduction Japan 39.30 46.45 85.75

Japan Fund for the Joint Crediting Mechanism

Japan 11.00 9.18 20.18

Japan Scholarship Program Japan 7.00 5.57 12.57

Leading Asia’s Private Sector Infrastructure Fund

Japan 220.00 142.13 362.13

Netherlands Trust Fund for the Water Financing Partnership Facility

Netherlands 0.00 9.49 9.49

People’s Republic of China Poverty Reduction and Regional Cooperation Fund

People’s Republic of China

0.00 50.00 50.00

Spanish Cooperation Fund for Technical Assistance

Spain 0.00 1.77 1.77

Total 343.40 576.36 919.76

Source: Office of Cofinancing Operations, Asian Development Bank.

continued on next page

Table continued

GRI 200—Economic Topics 53

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

203 Indirect Economic Impacts, 2016 Edition203 Indirect economic

impacts—management approach

Refer to the sections on “About ADB and the Sustainability Report”, and “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Indirect economic impacts are inherently (externally) material to ADB because in order to achieve its vision of an Asia and Pacific region free of poverty, ADB transfers resources from the global capital markets through government (public sector or sovereign) and private sector (nonsovereign) projects, to help its DMCs reduce poverty among their populations and improve their living conditions and quality of life.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

To ensure development effectiveness, ADB focuses on managing for development results (planning, budgeting, implementing and monitoring, and evaluation) and considers the need for its investment in, and the economic impacts of, its public and private sector projects in accordance with the following policies and procedures.

Commitment, Goals, and Targets. Article 1 of ADB’s Charter states that “The purpose of the Bank shall be to foster economic growth and co-operation in the region… and contribute to the acceleration of the process of economic development of the developing member countries in the region, collectively and individually.” From this stems ADB’s support and commitment to its DMCs’ economic development. Under Strategy 2020, support for inclusive economic growth, environmentally sustainable growth, and regional integration are ADB’s three strategic agendas.

The MTR was approved by the BOD in 2014. The MTR assessed the existing and emerging challenges for its DMCs and mapped out ways in which ADB can better serve all its members. The MTR identifies 10 strategic priorities to enhance the responsiveness, relevance, and effectiveness of ADB operations and determine their focus leading up to 2020. Five of these priorities and their key actions (i.e., poverty reduction and inclusive economic growth, environment and climate change, regional cooperation and integration [RCI], infrastructure development, and knowledge solutions, as set out in the MTR Action Plan, Appendix 1) relate to ADB’s indirect economic impacts.

Levels 1 and 2 of ADB’s Corporate Results Framework approved by the BOD under its structured program of Managing for Development Results encompass ADB’s overall targets related to its indirect economic impacts.

continued on next page

Table continued

54 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Policies, Procedures, and Responsibilities. The need for investment in, and indirect economic impacts of, ADB’s public and private sector projects in infrastructure-related and other sectors are considered by operations departments with the support of sector and thematic groups. The need for, and indirect economic impacts of, each project are set out in the project’s report and recommendation of the President, which is submitted to the BOD when seeking its approval of an investment. The impacts of completed projects are evaluated in project completion reports and impact evaluation studies. Details of every ADB project are disclosed on the ADB website including all financial intermediary projects and equity investments, although certain client confidential information may be redacted in the disclosed documents.

ADB supports investments, including those related to climate change and disaster risk management; education; environment; finance; gender; governance; health; social development; and infrastructure (agriculture and food security, energy, transport, information and communication technology [ICT], urban development and water), which contribute to inclusive economic growth, environmentally sustainable growth, and regional integration. These are in line with the sector and thematic policies and plans detailed in the section on “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018. Sector and thematic groups support ADB’s operations by identifying priority and emerging areas for investment; providing technical advice and peer review of projects; delivering operationally relevant knowledge products and services, including sharing knowledge across ADB and with development partners; managing and mobilizing financial resources; and supporting human resources and talent management.

RCI plays a critical role in accelerating economic growth. It helps narrow development gaps between DMCs by supporting policy dialogue and resources to build closer trade integration, intraregional supply chains, and stronger financial links, thus enabling slow-moving economies to accelerate their own expansion. By supporting investment projects, RCI projects help ADB’s DMCs reduce poverty through regional collective action, which leads to greater physical connectivity; expansion of trade and investment; development of financial systems and macroeconomic and financial stability; and improved environmental, health, and social conditions. ADB plays four distinct roles in promoting RCI: (i) providing financial resources for RCI-related programs and projects and helping DMCs mobilize funding and technical assistance; (ii) creating, consolidating, and disseminating knowledge and information on RCI to DMCs; (iii) helping DMCs and regional and subregional bodies build institutional capacity to manage RCI; and (iv) serving as catalyst and coordinator of RCI for DMCs.

continued on next page

Table continued

GRI 200—Economic Topics 55

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The Bank Support for Regional Cooperation (1994) policy paper and Regional Cooperation and Integration Strategy (2006) approved by the BOD serve as a policy framework for viewing development issues and DMC initiatives in relation to regional cooperation; define a distinctive role for ADB in support of regional cooperation; and guide ADB’s decision making in support of regional cooperation. In 2016, ADB published the Operational Plan for Regional Cooperation and Integration, 2016–2020 approved by the President. Its expected impacts are stronger connectivity between economies, enhanced competitiveness within and across connected markets, and improved regional public goods and collective action—achieved through operations with cross-border impact. Appendix 1 of the Operational Plan for Regional Cooperation and Integration, 2016–2020 includes the results framework (goals and targets) for RCI. In response to a 2015 thematic evaluation study on RCI, a Handbook for Classification and Economic Analysis of Regional Projects including a scorecard assessment approach was introduced in 2017 to help ADB better classify regional projects based on their expected cross-border and spillover benefits.

Complex development challenges, like weak governance, ineffective public administration, economic insecurity, vulnerability to disasters triggered by natural hazards, and civil unrest hamper efforts to reduce poverty in the Asia and Pacific region. ADB strives to operate more effectively in such fragile and conflict-affected settings through engagement that is tailor-fitted to the needs of affected countries in accordance with its Operational Plan for Enhancing ADB’s Effectiveness in Fragile and Conflict-Affected Situations.

Economic data and research help strengthen ADB’s effectiveness in achieving poverty reduction and inclusive economic growth. ADB’s large body of empirical work discusses the effects of economic growth and human capital development on poverty reduction. Economic analysis is used to assess the economic sustainability of investment projects and determine if they will improve the welfare of the project beneficiaries and the DMC.

The Operations Manual (section G1) sets out the policy and procedures for operational departments undertaking economic analysis of investments to ensure economic viability, cost effectiveness, and sustainable development results. Operations departments are responsible for undertaking economic analysis of their investment projects in accordance with the Operations Manual. Directors general of the operations departments are responsible for ensuring the quality of their department’s work. The Economic Research and Regional Cooperation Department (ERCD) reviews economic analyses at appropriate stages during project processing and provides guidance to the project team and Management. Management considers the results of economic analyses in approving an investment project for submission to the BOD.

The ERCD chief economist is ADB’s main spokesperson for ADB on economic trends.

continued on next page

Table continued

56 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Support for inclusive economic growth needs to figure prominently in country partnership strategies (CPSs) as subsequent investment and technical assistance projects are designed to deliver the development results set out in the CPS. ADB uses regional and country-level economic analysis to identify the need for ADB’s investment in infrastructure-related or other sectors and establish the rationale for public sector involvement to inform the CPS process. The results of the assessment process are set out in the CPSs, which are disclosed on the ADB website.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201.

Grievances. Disclosure 205 sets out the grievance process related to anticorruption and integrity issues.

For external grievances related to indirect economic impacts on project-affected people, grievances should first be directed to the project’s Grievance Redress Mechanism (Disclosure 413) or the relevant operations department or resident mission.

The Accountability Mechanism provides a channel of last resort for project-affected people to resolve issues pertaining to negative impacts from projects where ADB may be at fault.

The Accountability Mechanism Policy 2012 and Operations Manual (section L1) establish the policy and procedures for processing of complaints relating to safeguards, among others. The Accountability Mechanism consists of two separate but complementary functions: problem solving and compliance review. The problem-solving function, led by the Office of the Special Project Facilitator (OSPF), focuses on finding solutions to problems caused by ADB-assisted projects. It monitors the implementation of action plans relating to complaints raised. Monitoring activities include (i) reviewing steps taken in resolving the complaint; (ii) organizing stakeholder meetings involving ADB, government, and complainants to develop a communication and consultation strategy; and (iii) drafting a communication and consultation strategy to be discussed and finalized with the stakeholders. The compliance review function, implemented by the independent Compliance Review Panel with the assistance of the Office of the Compliance Review Panel (OCRP), focuses on whether ADB has complied with its operational policies and procedures in the design and implementation of its projects.

The Accountability Mechanism and its policy are generally aligned with the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD) in terms of their approach to complaint and resolution management.

continued on next page

Table continued

GRI 200—Economic Topics 57

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Grievances received during 2016–2017 are discussed in the section on “Accountability” in the Asian Development Bank Sustainability Report 2018. Two complaints received by OCRP during the reporting period related to indirect economic impacts: one on the economic use of customary land in the Promoting Economic Use of Customary Land and Samoa AgriBusiness Support Project in Samoa, and the other on the proposed Nenskra Hydropower Project in Georgia. The OSPF received one eligible complaint related to the energy sector for the Clean Energy and Network Efficiency Improvement Project in Sri Lanka, which was eligible because an initial assessment consultation regarding a design change during project implementation may not have been adequate and completed in a timely manner. The OSPF also received two eligible complaints related to the transport sector. Of these, one complaint for the Sustainable Urban Transport Investment Program in Georgia and one for the Sustainable Urban Development Investment Program in Armenia were deemed eligible as efforts to resolve the issues had not been successful.

Other indirect economic impact grievances that are not eligible for consideration by OAI or the Accountability Mechanism are handled by the relevant department or office.

Evaluation. ADB’s Regional Cooperation and Integration in Asia and the Pacific: Implementation of the Operational Plan for Regional Cooperation and Integration, 2016–2020—Corporate Progress Report 2017 prepared by ERCD on behalf of Management evaluates progress on Implementation of the Operational Plan for Regional Cooperation and Integration, 2016–2020 and notes areas for improvement. It complements other RCI reports including the annual Asian Economic Integration Report.

ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). For 2016–2017, the Development Effectiveness Review (DEfR) reports on completed operations as set out in Disclosure 203-1.

Evaluation covers all aspects of sovereign and nonsovereign operations and the policies and procedures that govern them. Evaluation provides effective feedback on performance including project design, implementation, results, and associated business processes to determine their relevance, effectiveness, efficiency, sustainability, and impact. Evaluation also identifies lessons learned to improve the development effectiveness of ongoing and future operations; and to inform the revision of policies, procedures, and business processes. Two levels of evaluation are undertaken within ADB—self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation by the Independent Evaluation Department (IED). IED reports to the BOD through the BOD’s Development Effectiveness Committee (DEC). The DEC oversees IED’s evaluation program and its results to help strengthen ADB’s focus on evaluation. The DEC assists the BOD to ensure that ADB’s operations make efficient use of resources. A 2017 external review of IED led by the DEC informed the BOD on the extent to which IED conducts its work in conformity with international good practice standards; the effectiveness and efficiency of its efforts; and the challenges it confronts in ensuring its long-term relevance to development work, the BOD, and ADB.

continued on next page

Table continued

58 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

IED uses a Management Action Record System to track accepted evaluation recommendations and Management’s corresponding initial responses, actions plans; and follows up on recommendations. IED also operates its publicly available lessons learned database. IED’s protocols for different types of evaluation ensure that its evaluations are conducted through common and methodologically consistent evaluation processes. These are based on international good practices and reflect accumulated experience from evaluation teams. IED evaluation procedures continue to be strengthened through the adoption of evaluation guidance on principles, methods, and practice of impact evaluation to generate more operationally useful results. For ongoing evaluations, the evaluation approach paper lays out the plan for conducting the evaluation (rationale, objectives, scope, methodology, resource requirements, terms of reference for consultants, timings, and a dissemination plan).

Methods for evaluating individual operations and broader evaluation studies are being harmonized among MDBs. Findings, lessons, and recommendations arising from evaluations help catalyze and shape efforts to improve operational performance. IED uses feedback obtained from its evaluation activities to improve the design and execution of its future operations, and to revise its policies and business processes. It also seeks to provide timely feedback to DMC governments and executing and implementing agencies to help them follow up on recommendations and sustain the benefits of activities supported by ADB. IED’s yearly work program typically includes about 5–6 cross-cutting evaluations (i.e., corporate and thematic, or sector); 1 country assistance program evaluation; 5–6 validations of country partnership strategy final reviews; 12 project or program and 2 technical assistance performance evaluations; around 60 validations of project or program completion reports and extended annual review reports; and an Annual Evaluation Review report. Where appropriate, draft evaluations are sent to DMCs and other external stakeholders for feedback. A review by the DMC government and private sector counterparts is required for all country assistance program evaluations, sector assistance program evaluations, impact evaluations, project performance evaluation reports, and technical assistance performance evaluation reports.

continued on next page

Table continued

GRI 200—Economic Topics 59

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

During 2016–2017, IED independently and systematically completed(i) 3 thematic and 3 corporate evaluations; (ii) 2 annual evaluation reviews;(iii) 2 country assistance program evaluations;(iv) 10 validations of CPS final reviews;(v) 22 project or program performance evaluation reports on sovereign

and nonsovereign operations (in-depth assessments of projects and programs, based on evidence from documentation, as well as field visits, occasional surveys, and interviews with ADB staff, government, and other stakeholders);

(vi) 2 technical assistance performance evaluation reports;(vii) 115 validations of self-evaluation reports on sovereign and

nonsovereign operations (approximately 75% of ADB’s portfolio is evaluated each year); and

(viii) 2 working papers, 5 topical papers, 1 synthesis paper, and 1 other publication (book).

IED also undertook a self-evaluation to take stock of the relevance and effectiveness of its products and processes, identify opportunities to enhance the quality and influence of its evaluations, and to strengthen its effectiveness and impact. The 2017 Annual Evaluation Review included a review of how ADB implements evaluation recommendations and examines ways to effectively facilitate the incorporation evaluation findings into its operations.

Country assistance program evaluations and validations of final reviews contain a systematic evaluation of ADB’s contribution to inclusive economic growth. The evaluation synthesis on Lessons from Country Partnership Evaluation: A Retrospective (2017) found most CPSs reviewed discussed support for inclusive economic growth. Key lessons were (i) economic growth and infrastructure development do not automatically lead to inclusive growth, (ii) synergies between infrastructure programs and public services need to be pursued explicitly in CPSs, and (iii) inclusive economic growth requires country-specific diagnostic analysis. CPSs should also consider the importance of governance reforms to improve the outcomes of infrastructure operations. Addressing a lack of governance capacity requires emphasis on long-term structural reforms. Remedial measures need to be built into project design. In most economies, ADB largely operates through government systems, thus (i) public financial management requires attention since in most economies, ADB is increasingly intending to use government systems; and (ii) addressing inappropriate pricing, taxation, and subsidies is critical to preventing the wastage of financial resources needed for development. The effective delivery of ADB’s drivers of change through CPSs requires deep understanding and rigorous analysis of the sectoral and country context. CPSs need to consider long-term approaches to good governance and capacity development, and pay more attention to public financial management to prevent the wastage of financial resources that are needed for development.

continued on next page

Table continued

60 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

IED researches high-impact topics with implications for ADB’s institutional policies and practices. IED’s study on Knowledge, Finance, and the Quality of Growth: An Evaluative Perspective on Strategy 2030 identified that Asia and the Pacific must embrace a more sustainable and inclusive growth trajectory, through continued and intensified focus on the mutual agendas of social and geographical inclusion, environmental sustainability, and RCI. The pursuit of better quality growth as a primary strategic interest and value proposition should be adopted under Strategy 2030. To stay relevant and responsive to a more diverse, dynamic, and demanding clientele in a rapidly changing environment, ADB must evolve strategically, operationally, institutionally, and culturally. ADB must become a more expert and agile development partner, with much stronger capacity to leverage and combine knowledge with finance to achieve results.

The creation of access to employment and improved access to essential services are highlighted as critical for inclusive economic growth. IED’s study noted that recent evaluations emphasized the importance of job creation, especially in manufacturing; and better links between market supply and demand for skills development. Evaluations highlight disparities in health, water, and sanitation. Asia and the Pacific has fared better in giving access to basic education, compared to improving access to health, water, and sanitation, which has lagged. Coordinating interventions is essential for projects to have more inclusive outcome effects. For core infrastructure support, complementary services and programs can strengthen the growth–income distribution link. ADB can capitalize on this link by increasing its portfolios in education, health, and social protection.

continued on next page

Table continued

GRI 200—Economic Topics 61

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

203-1 Infrastructure investments and services supported

2, 5, 7, 9, 11

Refer to the section on “Investing in Sustainable Infrastructure” in the Asian Development Bank Sustainability Report 2018.

ADB’s infrastructure-related sector operations (in agriculture, natural resources, and rural development; energy; transport; ICT; water and other urban infrastructure and services) concur with the sector and thematic policies and plans detailed in the section on “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018. Tables A203-1-d in Appendix 1 provide a breakdown of ADB’s sector infrastructure-related investments and technical assistance in 2016–2017 based on approvals, while Tables A203-1e-h in Appendix 1 provide the same breakdown but based on commitments.

The 2016–2017 DEfR reports on ADB-completed operations regarding

(i) the number of households connected to electricity (490,000 in 2016 and 2,683,000 in 2017);

(ii) power generation capacity installed (990 megawatts [MW] in 2016 and 1,400 MW in 2017);

(iii) renewable energy generation capacity installed (330 MW in 2016 and 340 MW in 2017);

(iv) transmission and distribution lines installed (13,300 kilometers [km] in 2016 and 27,300 km in 2017);

(v) roads built or upgraded (6,400 km in 2016 and 7,100 km in 2017);(vi) rail built or upgraded (260 km in 2016 and 630 km in 2017);(vii) new and upgraded water pipelines provided (5,600 km in 2016 and

630 km in 2017);(viii) number of households connected to clean water supply networks

(1,886,000 in 2016 and 205,000 in 2017);(ix) number of households with new or upgraded sanitation provided

(256,000 in 2016 and 142,000 in 2017);(x) additional or improved wastewater treatment capacity provided

(100,000 cubic meters per day in 2016 and 245,000 cubic meters per day in 2017); and

(xi) land improved through irrigation, drainage, and/or flood management (2,417,000 hectares in 2016 and 410,000 hectares in 2017).

continued on next page

Table continued

62 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB infrastructure investments have beneficial impacts on economies and populations by directly or indirectly creating jobs and expanding economic opportunities for its DMCs and their people. For example, a rural road investment could result in an increase in agricultural productivity, nonfarm employment, and productivity, directly raising wages and employment and thus economic welfare. This is the (direct) income distribution effect. In addition, higher productivity and expanded employment will lead to higher economic growth, affecting the supply and prices of goods and thus the quality of life. This is the (indirect) growth effect. ADB infrastructure investments also provide populations with access to basic services such as electricity, water supply, sanitation, education, and health. This, in turn, decreases the work burden for women in rural areas; reduces travel time and the costs of reaching social services; extends leisure time for families; enables children to study at home and family members to go to the hospital when ill; and will generally improve quality of life, especially for poor households.

Adverse environmental and social impacts may be associated with ADB infrastructure investments. By applying its Safeguard Policy Statement, ADB seeks to avoid, minimize, mitigate, and/or compensate for such impacts, which may include changes in land use and human settlement, decreased water quality and quantity, loss of biodiversity, deforestation and desertification, elevated pollution levels, and increased greenhouse gas emissions (Disclosures 303, 304, 305, and 413). Indirectly, these impacts have a negative effect on human health and increase climate change risk with its associated economic and social costs. ADB works to optimize the human health benefits of its infrastructure investments, especially in water and sanitation, and to minimize adverse impacts on health, such as road accidents and the transmission of communicable diseases (e.g., HIV/AIDS) in transport projects. ADB is working on strengthening its capacity for health impact assessment and institutionalizing the assessment of health impacts of ADB investments, especially those involving infrastructure, to optimize health outcomes. It is also mainstreaming climate risk management and incorporation of adaptation measures into its infrastructure-related operations (Disclosure 201-2). Incorporation of adaptation measures into infrastructure-related operations and investments in disaster resilience can reduce losses, contributing to sustained economic growth, poverty reduction, and enhanced natural resources management.

The impacts on the economy and people of individual infrastructure investments approved by ADB are considered in the project’s report and recommendation of the President, a document that is submitted to the BOD when seeking their approval of an investment. The impacts of completed projects are considered in project completion reports and impact evaluation studies.

continued on next page

Table continued

GRI 200—Economic Topics 63

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

203-2 Significant indirect economic impacts

1, 2, 3, 8, 10, 17

Refer to the section on “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018.

In addition to its infrastructure-related sector operations (Disclosure 203-1) ADB also invests in the education, health, and finance sectors, and RCI; all these investments concur with the sector and thematic policies and plans detailed in the section on “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018. All of ADB’s work has significant indirect economic impacts by contributing to the achievement of inclusive economic growth in the Asia and Pacific region. Tables A203-2a-h in Appendix 2 provide a breakdown of all ADB’s sector investments and technical assistance in 2016–2017 based on sovereign and nonsovereign approvals. Tables A203-2i-p in Appendix 2 provide the same breakdown, but based on commitments.

The 2016–2017 DEfR reports on ADB-completed operations regarding• students provided with new and/or improved education facilities

(930,000 in 2016 and 1,565,000 in 2017);• students provided with better education (3,464,000 in 2016 and

7,000,000 in 2017);• teachers trained with quality or competency standards (278,000 in

2016 and 73,000 in 2017);• trade finance supported ($3,100 million in 2016 and $4,500 million in

2017);• number of microfinance accounts opened, or end borrowers reached,

in countries that can borrow from ADF (2,008,000 in 2016 and 4,900 in 2017, mostly women);

• number of small and medium-sized enterprise accounts opened, or end borrowers reached (15,000 in 2016 and 121,000 in 2017); and

• cross-border cargo volume facilitated (1,254,000 tons in 2016 and 2,456,000 tons in 2017).

Significant impacts on the economy and people of individual infrastructure investments approved by ADB are considered in the project’s report and recommendation of the President, a document that is submitted to the BOD when seeking their approval of an investment. The impacts of completed projects are considered in project completion reports and impact evaluation studies. Country assistance program evaluations and validations of final reviews also contain a systematic evaluation of ADB’s contribution to inclusive economic growth at the DMC level.

ADB’s support for RCI also has significant indirect economic impacts by enhancing DMCs’ efforts to develop their economies and reduce poverty, widening the range of options available to them. RCI eases the constraints of national boundaries on factors of production, production activities, and markets. It allows RCI participants to have greater access to key inputs, resources, technologies, and knowledge. ADB support for RCI includes support for subregional programs, namely, the Greater Mekong Subregion Economic Cooperation Program, Central Asia Regional Economic Cooperation (CAREC) Program, South Asia Regional Economic Cooperation (SASEC), Association of Southeast Asian Nations (ASEAN), Indonesia–Malaysia–Thailand Growth Triangle (IMT-GT), and Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA).

continued on next page

Table continued

64 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB’s RCI support goes to various sectors and development areas such as trade facilitation, investment climate, access to finance, skills development, and regional public goods. For example, ADB works closely with CAREC governments and the private sector in monitoring and improving transport and trade facilitation in the subregion. Corridor performance measurement and monitoring is used to capture data on the time and cost of moving freight within the region, particularly at border crossing points, to spur operating efficiency, reduce bottlenecks along the six CAREC corridors, aid in the identification and design of investments in essential infrastructure, and thus improve international and regional trade flows.

204 Procurement Practices, 2016 Edition204 Procurement

practices – management approach

Refer to the sections on “Operational Procurement” and “Greening the Institutional Supply Chain” in the Asian Development Bank Sustainability Report 2018).

MATERIALITY AND BOUNDARY

Procurement practices are (internally and externally) material to ADB as it is involved in both operational and institutional procurement. In procuring goods and services, it is important to ensure that ADB funds are used for the purpose intended, and that procurement is undertaken efficiently and effectively if ADB’s vision for an Asia and Pacific region free of poverty is to be achieved. There has been a growing demand from DMCs for procurement flexibility and increased support in building, strengthening, and using their own procurement systems. New technologies have also permitted more varied uses of electronic procurement by DMCs, with different levels and rates of adoption by DMCs depending on local capacity constraints.

The management approach for operational procurement covers all of ADB’s operations; for institutional procurement, it covers ADB headquarters and all field offices.

MANAGEMENT APPROACH

ADB applies different policies and procedures to its operational and institutional procurement (refer to Disclosure 102-9 for an understanding of ADB’s supply chain). Operational procurement is managed with the purpose of ensuring that the proceeds of ADB’s financing are used in the procurement of goods, works, and nonconsulting and consulting services, with due attention to procurement principles of economy, efficiency, fairness, transparency, quality, and value for money. Institutional procurement is managed with the purpose of procuring high-quality goods and/or services for its operations at the most competitive market prices available. The most competitive procurement method applicable is used; and the reputation of the supplier or provider, promptness of delivery, terms of payment, and availability of adequate warranty and servicing facilities, among others, are considered.

continued on next page

Table continued

GRI 200—Economic Topics 65

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Commitment, Goals, and Targets. Refer to Disclosure 201.

ADB’s Charter (Article 14) requires that the proceeds of a loan, investment or other financing can usually only be used for procurement of goods and works supplied from, and produced in, ADB member countries. To achieve economy and efficiency, contracts are to be procured through international competition unless other forms of procurement are more suitable and have been agreed upon between ADB and the borrower. Procurement procedures must give member countries adequate, fair, and equal opportunity to compete for contracts; and transparency is essential in the procurement process to achieve economy and efficiency and to combat fraud and corruption.

Operational Procurement Policies, Procedures, and Responsibilities. ADB’s Procurement, Portfolio and Financial Management Department (PPFD) is responsible for all operational procurement.

In 2017, reforms to ADB’s procurement practices were rolled out in line with the procurement reform policy paper (2017) approved by the BOD. Given the differences in the levels of development in the Asia and Pacific region, a more country- and sector-specific approach to procurement rather than the uniform application of standardized documentation, methods, and processes that had been at the core of ADB’s previous procurement practices is needed. An implementation action plan was prepared to guide and help monitor the reforms, which will be periodically reviewed and updated.

PPFD previously had limited involvement during the project design and contract management stages resulting in long procurement decision-making periods and issues during contract implementation. The procurement practice reforms place greater emphasis on procurement planning during the project design stage, with increased focus on country circumstances, capacity constraints, market and industry assessments, risk-based transaction due diligence during bidding, and a more engaged contract administration and management process. Outposting of international procurement staff from the headquarters-based PPFD to resident missions and sector divisions of operations departments with a project portfolio of more than $1 billion will facilitate beginning-to-end support through greater involvement with project processing missions, contract packaging, transaction review, and contract implementation.

continued on next page

Table continued

66 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The Procurement Policy: Goods, Works, Nonconsulting and Consulting Services and Procurement Regulations for ADB Borrowers approved by the BOD in 2017 are expected to increase development effectiveness by reducing overall procurement time and improving the quality of procurement outcomes in ADB-financed projects. This will enable ADB to collaborate with its development partners in adopting substantially similar procurement arrangements, thereby reducing transaction costs for DMCs and helping them strengthen their own procurement systems—in turn, leading to greater use of such systems by ADB. The procurement policy and regulations take a principles- and risk-based approach to procurement. The procurement policy introduces “value for money” and “quality” as explicit procurement principles, in addition to economy, efficiency, fairness, and transparency, paving the way for recognition of life-cycle costs and the high-level technology solutions that are increasingly sought by middle-income DMCs in procurement decisions. The procurement policy and regulations are accompanied by a series of guidance notes on procurement. Open competitive bidding is ADB’s preferred method of procurement. This removes a previous distinction between international competitive bidding and national competitive bidding, and permits the use of open competition as the normal method whether contracts are advertised nationally or internationally; are based on ADB procurement procedures; or are permitted under alternative procurement arrangements based on development partner systems or national procurement systems. Risk assessments and management plans are prepared for all country systems in public financial management, procurement, and combating corruption. The risk assessment for country systems should inform the preparation of risk assessments for work in ADB sectors, which should in turn inform the design of all ADB projects and programs prior to approval of an investment.

Where ADB procurement procedures are used, standard bidding documents for the procurement of goods, and large and small works for projects can be used. These make use of the Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer, Multilateral Development Bank Harmonized Edition 2010, prepared by the Fédération Internationale des Ingénieurs-Conseil (FIDIC), which are internationally recognized and describe the engagement of labor, require adherence to the country’s laws, prohibit child and forced labor, etc.

Institutional Procurement Policies, Procedures, and Responsibilities. OAS is responsible for institutional procurement for headquarters in accordance with ADB’s Administrative Order 4.07 on Institutional Procurement and Contract Administration 2016, and Philippine laws and regulations. Field offices are responsible for their own procurement in accordance with the administrative order and following local laws and regulations. Field office contracts are reviewed and approved by the relevant country director.

Procurement methods vary depending on the value or nature of the goods and services, but are determined with due consideration to competitiveness, fairness, and transparency with all qualified suppliers offered the opportunity to compete for ADB business.

continued on next page

Table continued

GRI 200—Economic Topics 67

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The administrative order contains ADB’s green procurement guidelines that promote (i) procuring goods that are locally available and certified green by established environmental labeling systems (such as Energy Star, for computers, electronics, and electrical products; Green Seal, for cleaning materials; and the Forest Stewardship Council, for paper products); and (ii) ensuring the incorporation of green requirements in contractors’ work performance statements and contract documents, attesting that goods and equipment used in providing administrative services are environmentally preferred, and that relevant standards provided in ADB’s Energy, Environment, Health, and Safety Management System (E2HSMS) regarding hazardous substances and occupational health and safety are implemented.

The administrative order also requires contractors in ADB’s institutional supply chain to comply with applicable local and international social standards and requirements that provide for humane work conditions, protection of occupational safety and health, reasonable wages and benefits, respect for diversity, and other labor standards. Contractors are required to submit an annual Good Social Management Certificate as part of their contractual obligations within 15 calendar days of the effective date of their contract, which must remain valid for the contract duration. The general conditions of contract for services (2010) allow contract termination due to contractor’s default; any allegation or cause that may constitute grounds for contract termination would be investigated. However, contractors should resolve all disputes with their own personnel. The general conditions of contract for goods (2010) require suppliers of goods to ADB to certify that the goods were not manufactured in violation of local and international labor and occupational safety standards.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program as discussed in Disclosure 201. The Work Program and Budget Frameworks for 2016-2018, 2017-2019, and 2018-2020 provide for the procurement practice reforms, which will require additional international staff resources, change management, training and procurement skills reaccreditation for ADB staff, and capacity development for ADB’s external stakeholders.

Grievances. Disclosure 205 sets out the grievances process related to anticorruption and integrity issues. Procurement grievances that are not eligible for consideration by OAI are handled by the relevant department or office. PPFD is responsible for complaints arising from any bidding for operational procurement. Such complaints must be addressed objectively and in a timely manner, with transparency and fairness. Guidance on the complaints procedure during bidding is provided in Appendix 7 of the Procurement Regulations for ADB Borrowers.

Evaluation. Refer to Disclosure 201.

continued on next page

Table continued

68 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

204-1 Proportion of spending on local suppliers

12 Refer to the section on “Greening the Institutional Supply Chain” in the Asian Development Bank Sustainability Report 2018. At the end of 2017, field offices in Bangladesh, India, the People’s Republic of China, and Viet Nam had more than 50 staff positions. However, data on local suppliers in only available for ADB headquarters in the Philippines. In 2016, $52.2 million worth of goods ($10.3 million) and services ($41.9 million) was sourced in the Philippines, comprising 80% of the ADB headquarters’ institutional procurement expenses. Expenditure in 2017 increased by 18% to $61.7 million, with $9.5 million in goods and $52.2 million in services (mainly due to ICT initiatives and the support needed to implement them, and the fit out of the headquarters extension building).

205 Anticorruption, 2016 Edition205 Anticorruption –

management approach

MATERIALITY AND BOUNDARY

Anticorruption is (internally and externally) material to ADB because it is important to ensure that ADB funds are used in pursuit of value for money and for the purpose intended; and not usurped for fraudulent or corrupt practices, if its vision of an Asia and Pacific region free of poverty is to be achieved.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

ADB manages its anticorruption risk in accordance with the following policies and procedures with the aim of ensuring that ADB and its partners maintain the highest ethical and professional standards.

Commitment, Goals, and Targets. Refer to Disclosure 201.

Anticorruption Policies, Procedures, and Responsibilities. OAI is the initial point of contact for allegations of integrity violations involving activities or staff. OAI’s mandate includes investigating allegations of integrity violations of ADB-related activities; proactively undertaking project procurement-related reviews; conducting awareness-raising training and events; and advising on integrity due diligence, money laundering, and avoiding the financing of terrorism risks. In conducting investigations, OAI seeks to identify measures that could be incorporated into ADB’s procedures to prevent recurring integrity violations. These efforts are proactively aided by reviews of project-related procurement, in collaboration with ADB’s operations departments. Consistent with its advisory function, OAI provides substantial support and advice to Management and operations departments on issues relating to integrity and money laundering and financing of terrorism risks.

continued on next page

Table continued

GRI 200—Economic Topics 69

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB adopts a risk-based approach to managing governance and fighting corruption in its operations, focusing efforts to achieve results in three governance themes: (i) improving public financial management, (ii) strengthening procurement systems, and (iii) combating corruption through preventive enforcement and investigative measures with procedures for applying its policies (approved by the BOD) set out in ADB’s Operations Manual (section C5). Risk assessments and management plans are prepared for all country systems in public financial management, procurement, and combating corruption. The risk assessment for country systems should inform the preparation of risk assessments for work in ADB sectors, which should in turn inform the design of all ADB projects and programs prior to approval of an investment.

ADB’s Anticorruption Policy (1998) and Second Governance and Anticorruption Action Plan (2006) approved by the BOD provide the strategic framework for ADB’s anticorruption work. A primary aim of the Anticorruption Policy is to ensure that investment projects and all entities and individuals working on ADB-financed activity adhere to the highest ethical standards. It is supported by ADB’s Integrity Principles and Guidelines. The Anticorruption Policy and ADB’s Integrity Principles and Guidelines are available on the ADB website in several languages.

The Anticorruption Policy is complemented by the BOD approved ADB Anti-Money Laundering Policy, and supplemented by the policy paper (2016) on Enhancing the Role of the Asian Development Bank in Relation to Tax Integrity, also approved by the BOD. ADB recognizes that while there are numerous legitimate reasons for the use of structures involving offshore jurisdictions, these structures may pose higher risks because they have greater potential to obscure beneficial ownership and sources of funds; increasing the risk that they are used to facilitate corruption, tax evasion, money laundering, financing of terrorism, and other illicit activities. ADB’s Tax Integrity Principles reflect a combined risk-based and prohibitive approach. Internal procedures were adopted to implement the Tax Integrity Principles, and other internal procedures are currently being updated as set out in paragraphs 27 and 28 of the policy paper. At the project level, ADB conducts due diligence to obtain reasonable assurance that the projects it finances do not facilitate tax evasion. ADB is also supporting its DMCs to enhance the capacity and regional cooperation of tax authorities to help them stem tax evasion and the erosion of their domestic tax bases.

To demonstrate its commitment to good governance, ADB in 2010 started the Annual Declaration of Compliance, under which staff members must certify that they have read and understood ADB’s code of conduct (as set out in the Administrative Orders), Anticorruption Policy, and Integrity Principles and Guidelines. Staff members must also declare whether they or their immediate family members have any assets or interests that might reflect unfavorably on ADB or that might be in actual or apparent conflict with their duties as staff.

continued on next page

Table continued

70 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

General conditions of contract for consultants employed by ADB and institutional goods/service providers require adherence to ADB’s Anticorruption Policy and include clauses to manage actual and potential conflict of interest. Consultant contracts also define the consultant’s responsibility to observe the highest ethical standards. The ADB Consultant Management System refers consultants to the Anticorruption Policy and associated sanctions (including during registration) and automatically flags and prevents attempts by sanctioned parties from obtaining contracts on an ADB-financed or ADB-supported projects. In signing an institutional procurement contract, goods/service providers agree to be bound by ADB’s Anticorruption Policy and to take appropriate measures to ensure that neither the provider nor its personnel is placed in a position where there may be actual or potential conflict.

OAI maintains proactive collaboration with the other MDBs at Heads of Integrity Meetings, helping strengthen anticorruption and integrity procedures across all participating institutions. The meetings permit heads of integrity offices to share knowledge and experience on investigative approaches and techniques, deal with law enforcement, and obtain a global perspective of current trends. The OECD’s base erosion and profit shifting (BEPS) initiative promotes an action plan for an internationally coordinated and comprehensive reform to international tax rules to reduce opportunities for BEPS, including aggressive tax planning leading to tax avoidance. ADB supports leading organizations working on tax transparency as well as on BEPS, participates as an observer in the Global Forum on Transparency and Exchange of Information for Tax Purposes, and works with OECD on BEPS initiatives. ADB assists the Global Forum to promote standards for Automatic Exchange of Information and Exchange of Information on Request (two Global Forum promulgated transparency initiatives).  Moreover, ADB welcomes the Addis Tax Initiative and collaborates with development partners to achieve the objectives of the initiative. Through this work, ADB is assisting its DMCs to enhance their tax regimes to better comply with international tax standards, and thus reduce the opportunities for aggressive tax planning that may result in tax avoidance.

Training of staff on anticorruption policies and procedures is provided at the start of employment as set out in Disclosure 205-2. Thereafter, training is provided on an as needed basis.

For external stakeholders, OAI regularly provides trainings as set out in Disclosure 205-2, and publishes news releases, advisories, and updates about ADB’s anticorruption activities including its Annual Report on the ADB website. For staff and other stakeholders, OAI releases the quarterly online publication, Anticorruption and Integrity e-Bulletin, with feature articles on OAI’s activities and ways to enhance the success and integrity of project implementation.

Resources: ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. OAI reports directly to the President, and had 29 staff members at the end of 2017.

continued on next page

Table continued

GRI 200—Economic Topics 71

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Grievances. Anyone who believes that integrity violations (corruption, collusion, fraud, coercion, etc., as defined in ADB’s Integrity Principles and Guidelines), have occurred on an ADB project can lodge a complaint with OAI via integrity mail, e-mail, mail, telephone, or fax, without identifying themselves. (OAI logs and reviews complaints even from anonymous sources.) Whistleblowers and witnesses are vital in the fight against fraud and corruption. As such, ADB protects the identity of staff and external whistleblowers and witnesses acting in good faith to ensure that they are not subject to retaliation in accordance with the Administrative Order 2.10 on Whistleblowers and Witness Protection (2017).

OAI investigates all complaints that meet the screening criteria. Grievances related to anticorruption and integrity are dealt with by the Integrity Oversight Committee, which determines whether ADB’s Anticorruption Policy has been violated and whether remedial action is warranted. The committee consists of three voting members, one of whom shall be a reputable external non-ADB staff. The committee decides on a sanction by majority decision, which includes the vote of the external member. An individual or firm sanctioned by the committee is entitled to an appeal within 90 days from the date of the notice to the individual or firm of the decision. The sanctioned firm and/or individual will be placed on ADB’s sanctions list accessible to ADB staff and government project executing agencies.

The Sanction Appeals committee is composed of two or three ADB vice-presidents, depending upon the nature of the case and the length of the sanction. To provide greater independence to the appeals process, a senior staff member independent of OAI acts as secretariat to the Sanction Appeals committee. Under ADB’s Administrative Order 2.04 on Disciplinary Measures and Procedures (2017), the authority to impose a sanction (disciplinary measures) upon an ADB staff member falls on the Budget, Personnel, and Management Systems Department (BPMSD), with a staff disciplinary case deemed closed once the disciplinary measures have been imposed (Disclosure 401).

Evaluation. The BOD Audit Committee is responsible for assisting the BOD in overseeing ADB’s finances, accounting, internal control and risk management, and anticorruption and integrity, to check how these are being managed and how accountabilities are being enforced. The Audit Committee is required to ensure that ADB has established and maintains appropriate, efficient, and consistent procedures for the receipt, retention, and treatment of complaints and anonymous submissions from internal and external complainants, including protection of whistleblowers, in regard to fraud and corruption, or questionable accounting or auditing matters. The Audit Committee meets at least quarterly with OAI to discuss its activities, including cases where findings indicate systemic control weaknesses, or where the findings indicate a reputational risk for ADB (Disclosure 201).

continued on next page

Table continued

72 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

205-1 Operations assessed for risks related to corruption

16 Refer to the section on “Anticorruption and Integrity” in the Asian Development Bank Sustainability Report 2018.

Risk assessments and management plans for public financial management, procurement, and anticorruption are prepared at the DMC level. These inform the preparation of risk assessments at sector level, which in turn inform the design of investment projects.

Due to the nature of the Private Sector Operations Department’s borrowers (clients), 100% of entities involved in private sector projects are assessed for risks in relation to corruption, money laundering, terrorist financing, and tax transparency before deciding if a project should be taken forward to Board approval. In 2016–2017, OAI reviewed 1,424 entities for anti-money laundering and/or integrity due diligence.

OAI conducts project procurement-related reviews to proactively identify and address areas that are susceptible to risks of fraud and corruption in ADB projects. OAI recommends measures to better safeguard project resources with selected reviews undertaken in close collaboration with supreme audit institutions (national organizations that set standards for audit work). The reviews identify significant risks including noncompliance issues; irregularities; and integrity concerns in procurement activities, disbursement of funds, and delivery of project outputs. The reviews enhance assurance that project funds are used for their intended development objectives and beneficiaries. The reviews help the implementing agencies and project teams identify and develop preventive measures to mitigate fiduciary risks, improve project management, and enhance project implementation. Should a review indicate violations of ADB’s Anticorruption Policy, OAI conducts further investigations and seeks the cooperation of the executing agency and project staff in its efforts. Close liaison with DMC project officers is fundamental to the review process.

In 2016–2017, OAI conducted 12 Project Procurement-Related Reviews on ADB-financed projects (three projects in South Asia, five projects in Southeast Asia, two projects in the Pacific, one project in Central and West Asia, and one project in East Asia) (about 5% of all projects approved). The reviews identify in a timely manner and promptly address potential project vulnerabilities, particularly integrity risks that could impede a project. Overall, OAI’s reviews have identified that the following significant risks (among others) compromise the sustainability of ADB projects: (i) weak internal control mechanisms; (ii) poor executing agency capacity for contract management and project administration; and (iii) flawed bid evaluation resulting in awarding of contract to unqualified contractors and/or consultants. The reviews have identified situations where submitted bids contained misrepresentations, or where evaluation criteria were not consistently applied. These may have been overlooked by the bid evaluation committees or may be a result of an integrity violation.

continued on next page

Table continued

GRI 200—Economic Topics 73

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

205-2 Communication and training about anticorruption policies and procedures

16 Refer to the sections on “Anticorruption and Integrity” and “Workforce Integrity” in the Asian Development Bank Sustainability Report 2018.

Board. The Board of Governors is not informed of, nor provided training on ADB’s anticorruption policies and procedures. When each BOD director and alternate assumes office, the Office of the Secretary arranges for them to be briefed on BOD business activities, processes, and practices, including the Code of Conduct and the role of the Ethics Committee (refer to Disclosure 102-16).

Staff. OAI conducts “Say No to Corruption” briefings on ADB’s anticorruption policies and procedures that 100% of staff members (regardless of employee category or region) are required to attend. Since 2012, all new hires receive the briefing from OAI at their mandatory orientation and induction training organized by BPMSD. During the orientation, BPMSD also provides a briefing on ethical work behavior, promoting awareness and understanding of ADB’s rules governing staff conduct. All (100%) new staff members are also required to complete an online course on ADB’s Integrity Principles and Guidelines. In 2017, ADB launched a new mandatory eLearning course to be completed by 100% of staff by May 2018 on Anticorruption and Respect at Work to enhance staff knowledge on ADB’s Anticorruption Policy and the staff code of conduct. BPMSD tracks staff members’ attendance at orientation and induction, and completion of the online courses to ensure their participation.

All (100%) of staff members must also annually certify the Annual Declaration of Compliance, stating that they have read and understood the staff code of conduct, Anticorruption Policy, and Integrity Principles and Guidelines (refer to Disclosure 102-16).

Training for project design and management provided to 87 staff (54 at headquarters and 33 at resident missions) in 2016 and 74 staff (39 at headquarters and 35 at resident missions) in 2017 included a module on how to prevent fraud and corruption from impeding effective project implementation. OAI also conducts staff briefings as required. In 2016-2017, 87 internal training sessions (with 431 attendees in 2016 and 1,436 in 2017) were conducted on fraud prevention, integrity due diligence, financial management, respect in the workplace, and other integrity-related topics.

Consultants. Business opportunities seminars and ADB’s annual Business Opportunities Fair include briefings on ADB’s Anticorruption Policy for prospective consultants.

continued on next page

Table continued

74 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Contractors and Service Providers. OAS videos shown during the mandatory E2HSMS briefing for all contractors and services providers’ personnel deployed at the ADB headquarters deal with norms of conduct and ethical standards and compliance with ADB’s Anticorruption Policy. For example, the videos inform contractors and service providers that they shall not pay any commissions or fees, grant any rebates, or give gifts or favors to ADB staff or dependents during the contract period; and that they should not place personnel in a position where there may be a “conflict of interest”—whether actual or potential—between the interests of the contractor and performance under the contract. In 2016–2017, 100% of contractors and service providers’ personnel deployed to ADB headquarters by OAS were required to watch the OAS videos during the mandatory E2HSMS orientation. The management of several contractor and service provider companies requested and were issued copies of the videos, to show to their employees before their deployment to ADB.

External. ADB also helped external stakeholders to better understand their role in uncovering red flags and exposing integrity issues through a series of 74 trainings held in 2016–2017 for audit institutions, anticorruption commissions, executing and implementing agencies, nonbank financial institutions, civil society, and the private sector in the Asia and Pacific region.

In 2016, OAI conducted 6 anticorruption events at ADB, 11 anticorruption seminars in DMCs, developed awareness raising materials, and posted 100 advisories. In 2017, OAI conducted 6 anticorruption events at ADB, 13 anticorruption seminars in DMCs, developed awareness raising materials, and posted 110 advisories. It also published its Annual Reports that provide future details of its communication and training activities.

continued on next page

Table continued

GRI 200—Economic Topics 75

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

205-3 Confirmed incidents of corruption and actions taken

16 Refer to the sections on “Anticorruption and Integrity” and “Workforce Integrity” in the Asian Development Bank Sustainability Report 2018.

In 2016, OAI recorded 88 incidents of fraud, 14 of collusion, 6 of corruption, 1 of coercion, 1 of conflict of interest, and 10 other incidents; while in 2017, OAI recorded 64 incidents of fraud, 13 of collusion, 3 of corruption, 3 of conflict of interest, 3 of abuse, and 4 other incidents. OAI investigations resulted in sanctions being imposed.

In 2016–2017 ADB debarred 128 firms and 62 individuals and cross-debarred 239 firms and 83 individuals based on notification received from four other participating international financial institutions, pursuant to the Agreement for Mutual Enforcement of Debarment Decisions.

In 2016–2017, there were 39 (11 in 2016 and 28 in 2017) staff disciplinary cases processed under Administrative Order 2.04 on Disciplinary Measures and Procedures (Disclosure 205).  Of 39 staff, 7 (6 in 2016 and 1 in 2017) were terminated from employment.  Others were penalized with other sanctions, such as demotion, withholding of salary increases, ineligibility to work as a consultant or contractor, or written reprimands. Typical reasons for the imposition of disciplinary measures on ADB staff members are the commission of fraudulent acts; commission of acts that amount to a conflict of interest; fraudulent misrepresentation of credentials or qualifications; and engaging in outside or private employment.

As an MDB, ADB’s legal status differs significantly from that of a commercial bank. ADB’s Charter contains provisions that accord to ADB legal status and certain immunities and privileges in the territories of its members. For this reason, ADB is not subject to any public legal cases regarding corruption.

GRI = Global Reporting Initiative, SDG = Sustainable Development Goal.Source: Asian Development Bank.

Table continued

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

302 Energy, 2016 Edition 302 Energy –

management approach

Refer to the sections on “Energizing Asia and the Pacific” and “Resource Use and Conservation” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Energy is (externally and internally) material to ADB because (i) it invests in projects in the energy sector, and supports environmentally sustainable growth; and (ii) because in supporting environmentally sustainable growth, ADB must “walk the talk” in its own operations. The management approach for investments covers all of ADB’s operations. For institutional energy, the management approach and reporting for subsequent disclosures only covers ADB headquarters. The Office of Administrative Services (OAS) has in place a system and procedures to collect information on energy use from its field offices (refer to the section on “Field Offices” in the Asian Development Bank Sustainability Report 2018) but cannot yet determine ADB’s overall energy consumption.

MANAGEMENT APPROACH

The following policies and procedures are applied in considering investments in the energy sector, and in managing ADB’s institutional energy use. Measures adopted at the ADB headquarters help influence activities in its field offices and promote clean energy and energy conservation and efficiency in its developing member countries (DMCs). Commitment, Goals, and Targets. Disclosure 203 sets out ADB’s commitment, goals, and targets in relation to investments, including those in the energy sector. Included among the key actions of the Midterm Review of Strategy 2020 (MTR) (Appendix 1, under the environment and climate change priority) is investment of $2 billion annually in clean energy, including energy efficiency (the same target is included in ADB’s Clean Energy Program). In 2015, ADB also committed to invest $6 billion climate finance by 2020, $3 billion of this from clean energy.

GRI 300: Environmental Topics

continued on next page

GRI 300—Environmental Topics 77

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

As a multilateral development bank, ADB’s legal status differs significantly from that of a commercial bank. ADB’s Charter contains provisions that accord to ADB legal status and certain immunities and privileges in the territories of its members. For this reason, ADB is not subject to energy regulations or policies. However, through the Energy, Environment, Health, and Safety Management System (E2HSMS) for its headquarters, ADB seeks to adhere to international guidance and Philippine legislative requirements related to energy consumption. For 2016–2017, under the E2HSMS, ADB aimed to reduce energy consumption at headquarters by 1.5% per annum.

Investment Policies, Principles and Responsibilities. ADB’s energy sector investment projects are guided by the following:

(i) ADB’s Energy Policy (2009, approved by the Board of Directors (BOD));

(ii) the Clean Energy Program; and (iii) the Energy for All Initiative. (discussed in the section on “Energizing Asia and the Pacific” in the Asian Development Bank Sustainability Report 2018).(iv) Environment Operational Directions 2013–2020 (approved by

the President); and (v) Climate Change Operational Framework 2017–2030 (approved by

the President).(discussed in the section on “Pursuing Environmental Sustainability” in the Asian Development Bank Sustainability Report 2018).

These all recognize the need to prioritize renewable energy and energy efficiency investments. The Energy Policy states that ADB will not be involved in financing nuclear power generation. Neither will it finance coal mine or oil field development, except in limited circumstances. Large hydropower and fossil fuel generation can be supported, subject to compliance with ADB’s environment and social safeguards. The Energy Sector Group, the Environment Thematic Group, and the Climate Change and Disaster Risk Management Thematic Group provide operations departments with technical advice and peer review of projects. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD.

ADB’s environment and social safeguards, as detailed in the Safeguard Policy Statement (SPS), require ADB borrowers (clients) to examine and incorporate into their operations resource conservation and energy efficiency measures consistent with the priorities of cleaner production. SPS refers to the World Bank–International Finance Corporation (IFC) Environment, Health and Safety (EHS) Guidelines for the performance levels and measures that are normally acceptable and applicable to projects. The EHS Guidelines include general guidance on energy conservation and sector specific guidance for projects involving gas distribution systems, electric power transmission and distribution, liquified natural gas facilities, onshore oil and gas, offshore oil and gas, thermal power, geothermal power and wind energy etc. Under the SPS (Appendix 5), the production of or trade in radioactive materials, including nuclear reactors and components thereof, are listed as prohibited investment activities. The potential

continued on next page

Table continued

78 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

direct and indirect impact of every ADB-financed and/or ADB-administered project is assessed prior to approval of the project. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

Institutional Energy Use Policies, Principles, and Responsibilities. ADB has an integrated E2HSMS for operating and maintaining its headquarters. The E2HSMS policy states that in operating and maintaining its headquarters, ADB commits to optimizing the use of energy resources. The energy management system also covers ADB’s transport activities and complies with the requirements of the International Organization for Standardization (ISO) 50001 (Energy Management System) standard. The President has overall responsibility for the E2HSMS and for reporting performance to the BOD and Board of Governors. The management representative from OAS ensures systematic and effective execution of the E2HSMS. Induction training; awareness-raising events (e.g., Sustainability in Action Week); and intranet articles make staff aware of methods to conserve resources.

In 2017, ADB sustained its certification under the E2HSMS by complying with the ISO 14001 and 50001 requirements and updating relevant administrative procedures to further improve the facilities and operations of ADB headquarters. As defined in ISO 50001, significant energy uses form the basis for identifying ADB’s energy conservation programs and establishing targets for reducing energy consumption. ADB’s significant energy uses include chillers and auxiliaries, ventilation fans, lighting and receptacles, and information and communication technology equipment (uninterruptable power sources).

ADB seeks to meet Leadership in Energy and Environmental Design (LEED) specifications for resource conservation at its headquarters.ADB’s Administrative Order 4.07 on Institutional Procurement and Contract Administration (2016) contains ADB’s green procurement guidelines, which promote procuring goods that are certified green by established environmental labeling systems, such as Energy Star for computers, electronics, and electrical products.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201.

Grievances. Disclosure 203 sets out the grievance procedure in relation to investments in the energy sector. Grievances related to the E2HSMS are handled by OAS.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the processes and tools to evaluate the effectiveness of the management approach (Disclosure 201). For 2016–2017, the Development Effectiveness Review (DEfR) reports on completed energy operations as set out in Disclosure 203-1.

continued on next page

Table continued

GRI 300—Environmental Topics 79

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Disclosure 203 sets out self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation by ADB’s Internal Evaluation Department (IED). No IED evaluation specific to the energy sector was undertaken in 2016–2017. However, a working paper on Increasing Penetration of Variable Renewable Energy: Lessons for Asia and the Pacific was produced. The 2016 IED topical paper on Environmentally Sustainable Growth: A Strategic Review assessed ADB’s response to its strategic agenda of environmentally sustainable growth (including the pillar of sustainable infrastructure) and raises issues for consideration in Strategy 2030. This paper concluded that more effort is needed to use country partnership strategies (CPSs) as the framework to integrate more cross-sectoral and spatial approaches to support environmentally sustainable growth. It encouraged a shift to operations with more innovative and impactful environmental content. The paper advised ADB to provide more strategic direction on environmentally sustainable growth and to further this agenda, by elaborating on what environmentally sustainable growth means and what its pursuit implies for future strategies and policies, especially Strategy 2030; as well the need for better categorization and targets for environmentally sustainable operations and further integration as the environment agenda expands. The 2017 Lessons from Country Partnership Evaluation: A Retrospective identified key lessons in relation to environmentally sustainable growth, namely, (i) addressing critical environmental problems in the CPS, including historically neglected natural capital, improves the potential for a better ADB response; (ii) upper-middle-income countries that are in a better position to take initiatives have a higher demand for environmentally sustainable growth investments and can pilot test innovative environmentally sustainable growth projects that can be replicated elsewhere; (iii) in fragile contexts, strategies to mitigate environmental degradation benefit from including a component to strengthen capacity; (iv) countries at high risk of environmental degradation from both internal and external forces require comprehensive support; and (v) the urban and rural sanitation agenda, especially in densely populated countries, needs special attention in CPSs to boost its overall performance. For project evaluations, emphasis on environmental sustainability has been introduced as a requirement.

In accordance with E2HSMS requirements, energy performance and energy reduction initiatives at the ADB headquarters are evaluated quarterly by the Energy Conservation Committee and presented annually to Management. The most recent evaluation confirmed that significant energy uses (as defined in ISO 50001) in ADB headquarters building operations remained unchanged from previous years. ADB achieved its annual E2HSMS target of reducing electricity consumption at headquarters by 1.5% in both 2016 (1.9%) and 2017 (3.7%).

The E2HSMS is both internally and externally audited by a third-party certifying body. In 2016, external auditors noted two opportunities for improvement and one positive finding with neither major nor minor nonconformities. In 2017, no major nonconformities, two minor nonconformities, and two opportunities for improvement were noted.

continued on next page

Table continued

80 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

302-1 Energy consumption within the organization

7, 8, 12, 13 Nonrenewable Fuel. ADB purchases diesel for its back-up generators and fire pump system and liquefied petroleum gas (LPG) for cooking and water heaters in its headquarters; it also uses diesel and gasoline fuel for road transport.

During 2016–2017, ADB consumed

• 20,231.90 liters (2016) and 38,302.39 liters (2017) of diesel fuel (Table 302-1a);

• 164,688.70 liters (2016) and 168,438.80 liters (2017) of LPG (Table 302-1b); and

• 57,318.33 liters (2016) and 58,273.79 liters (2017) of fuel for road transport (Table 302-1c).

ADB’s total fuel consumption from nonrenewable fuel sources for 2016 was equivalent to 7,046,566 megajoules (MJ) of power, and in 2017 was equivalent to 7,879,279 MJ (Table 302-1d).

Table 302-1a: Conversion of Diesel Fuel to Power, 2015–2017

YearDiesel Fuel

(liters)Energy

(megajoules)2017 38,302 1,478,4722016 20,232 780,9512015 12,016 463,820

Note: Energy density = 38.6 megajoules per liter.Source: Office of Administrative Services, Asian Development Bank.

Table 302-1b: Conversion of Liquefied Petroleum Gas to Power, 2015–2017

Year LPG (liters) LPG (kg)Energy

(megajoules)2017 168,439 92,641 4,270,7662016 164,689 90,579 4,175,6822015 182,615 100,438 4,630,169

kg = kilogram, LPG = liquefied petroleum gas, MJ = megajoules.Note: Specific heat = 46.1 MJ/kg. Conversion from liters to kilogram density = 0.55 kg/liter.Source: Office of Administrative Services, Asian Development Bank.

Table 302-1c: Conversion of Fuel for Road Transport to Power, 2015–2017

Year and SourceFuel

(liters)Energy Density

(megajoules per liter)Energy

(megajoules)2017 Diesel 25,127 38.6 969,9152017 Gasoline 33,146 35 1,160,1262016 Diesel 23,275 38.6 898,4252016 Gasoline 34,043 35 1,191,5072015 Diesel 23,724 38.6 915,7462015 Gasoline 32,833 35 1,149,155

Source: Office of Administrative Services, Asian Development Bank.

continued on next page

Table continued

GRI 300—Environmental Topics 81

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 302-1d: Total Energy Consumption from Nonrenewable Fuel, 2015–2017

(megajoules)Source 2015 2016 2017Diesel fuel 463,820 780,951 1,478,472 Liquefied petroleum gas 4,630,169 4,175,682 4,270,766 Road transport 2,064,901 2,089,933 2,130,041 Total 7,158,890 7,046,566 7,879,279

Source: Office of Administrative Services, Asian Development Bank.

Renewable Electricity Generated. ADB directly consumes electricity generated by its rooftop solar photovoltaic system, using all of it to offset the amount of electricity it purchases (none of its self-generated electricity is sold). The total capacity of ADB’s on-site photovoltaic installation is 690-kilowatt peak (kWp) and comprises the following:

(i) the first solar rooftop installation (installed in 2012 with 571 kWp capacity);

(ii) a building-integrated photovoltaic system (installed in 2014 on the skylight of the headquarters extension with 8 kWp capacity); and

(iii) a second solar rooftop installation on the headquarters extension rooftop (opened in 2015 with 111 kWp capacity).

In 2016, ADB generated 817,101 kilowatt-hours (kWh) of electricity; in 2017, it generated 792,931 kWh, which was directly consumed in the ADB headquarters building (Table 302-1e).

Table 302-1e: Conversion of Solar Power Generated to Power, 2015–2017

Year (Source)Electricity

(kilowatt-hours)Energy

(megajoules)2017 (571 kW) 593,180 2,135,448 2017 (8 kW capacity BIPV) 5,605 20,178 2017 (110.7 kW) 194,146 698,925 Total 792,931 2,854,551 2016 (571 kW) 607,709 2,187,753 2016 (8 kW capacity BIPV) 5,981 21,532 2016 (110.7 kW) 203,411 732,278 Total 817,101 2,941,563 2015 (571 kW) 623,277 2,243,796 2015 (8 kW capacity BIPV) 6,536 23,530 2015 (110.7 kW) 198,373 714,141 Total 828,185 2,981,467

BIPV = building-integrated photovoltaic system, kW = kilowatt.Source: Office of Administrative Services, Asian Development Bank.

continued on next page

Table continued

82 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Renewable Electricity Purchased. Since March 2014, ADB has purchased its grid electricity from the utility company Aboitiz Power, a geothermal power plant source. In 2016, ADB purchased 18,308 megawatt-hours (MWh) of electricity, and 17,628 MWh in 2017 (Table 302-1f; refer also to the section on “Resource Use and Conservation” in the Asian Development Bank Sustainability Report 2018).

Table 302-1f: Conversion of Utility Purchased Electricity (Geothermal) to Power, 2015–2017

YearElectricity

(megawatt-hours)Energy

(megajoules)2017 17,628 63,461,690 2016 18,308 65,908,382 2015 18,661 67,179,600

Source: Office of Administrative Services, Asian Development Bank.

Total Energy Consumption. ADB’s total energy consumption for 2016 was 75,896,511 MJ; and for 2017, 74,195,520 MJ calculated in accordance with the GRI’s Disclosure 302-1 formula (Table 302-1g).

Table 302-1g: Total Energy Consumption, 2015–2017 (megajoules)

Source 2015 2016 2017Nonrenewables (fuel) 7,158,890 7,046,566 7,879,279Renewable electricity generated (solar)

2,981,467 2,941,563 2,854,551

Renewable electricity purchased (geothermal)

67,177,888 65,908,382 63,461,690

Total 77,318,245 75,896,511 74,195,520Source: Office of Administrative Services, Asian Development Bank.

Total energy consumption is calculated as follows:

(i) Annual fuel consumption is measured in liters or kilograms (kg) and converted to MJ using the energy density (heating or calorific value) for diesel, and specific heat (heating or calorific value) for LPG. The usage of diesel fuel is monitored and recorded on a weekly basis. The energy density of diesel is based on the data sheet provided by the supplier. LPG usage is monitored weekly. The specific heat value of LPG is based on the data sheet provided by the supplier.

(ii) Annual fuel consumption for road travel is measured in liters and converted to MJ using the energy density (heating value) for diesel or gasoline. Fuel consumption per vehicle is recorded daily. For energy density of diesel, the source is American Physical Society. 2008. Energy Future: Think Efficiency. United States. For energy density of gasoline, the source is H.L. Wakeley et al. 2008. Alternative Transportation Fuels: Distribution Infrastructure for Hydrogen and Ethanol in Iowa. Journal of Infrastructure Systems. 14 (3). page 23.

(iii) Annual electricity consumption by source is metered in kWh and MWh and converted to MJ using standard conversion factors.

continued on next page

Table continued

GRI 300—Environmental Topics 83

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

302-3 Energy intensity 7, 8, 12, 13 In 2016, ADB’s total energy consumption per square meter of gross floor area totaled 474 MJ; in 2017 it was 463 MJ (Table 302-3). Energy consumption includes fuel and electricity used at the ADB headquarters as per Disclosure 302.1. It does not include energy consumption from business travel (other than road transport) or investments.

Table: 302-3: Energy Intensity, 2015–2017 Item 2015 2016 2017

Total energy consumption (MJ) 77,318,245 75,896,511 74,195,520

Floor areaa (m2) 144,025 144,025 144,025

Energy intensity per m2 (MJ) 537 527 515

m2 = square meter, MJ = megajoule.a Floor area is based on computations undertaken for Leadership in Energy and Environmental Design (LEED) certification. (As noted in Disclosure 102-48, in previous Sustainability Reports, the floor area was reported as 160,210 m2, which included covered parking areas and unoccupied areas of the headquarters extension.) As of 2016, ADB has revised the methodology for measuring its gross floor area, resulting in a floor area of 144,025m2. Source: Office of Administrative Services, Asian Development Bank.

302-4 Reduction of energy consumption

7, 8, 12, 13 From comparison of ADB’s annual total energy consumption calculated per Disclosure 302-1, energy consumption decreased by 1,421,734 MJ (1.8%) from 2015 to 2016; and by 1,700,991 MJ (2.2%) from 2016 to 2017.

Energy conservation initiatives in 2016–2017 included (i) optimizing the operation of the air conditioning system and

auxiliary units (i.e., adjustment of the variable frequency drive of cooling tower motors and chiller shutdown schedules);

(ii) maintaining proper operation of chilled water pumps, air handling units, and condenser water pumps;

(iii) replacing fan power units with energy-efficient equipment; (iv) replacing office lighting fixtures with light-emitting diode (LED)

lights; and(v) raising staff awareness through events (e.g., Sustainability in

Action Week) and intranet articles.

continued on next page

Table continued

84 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

303 Water, 2016 Edition

303 Water – management approach

Refer to the sections on “Providing Water and Sanitation” and “Resource Use and Conservation” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Water is (externally and internally) material to ADB because (i) ADB invests in projects in the water sector, and supports environmentally sustainable growth; (ii) investment projects funded by ADB, especially infrastructure-related projects, have the potential to adversely impact on the quantity and quality of water resources during construction and operation; and (iii) in supporting environmentally sustainable growth, ADB must “walk the talk” in its own operations.

The management approach for investments covers all of ADB’s operations, while for institutional water use, the management approach and reporting for subsequent disclosures only covers ADB headquarters. OAS has in place a system and procedures to collect information on water use from its field offices (as discussed in the section on “Field Offices” in the Asian Development Bank Sustainability Report 2018) but cannot yet determine ADB’s overall water consumption.

MANAGEMENT APPROACH

The following policies and procedures are applied in considering investments in the water sector and in managing ADB’s institutional water use. Measures adopted at the ADB headquarters help influence activities in all its field offices and promote water conservation and efficiently to its DMCs.

Commitment, Goals, and Targets. Disclosure 203 sets out ADB’s commitment, goals and targets in relation to investments, including those in the water sector. Key actions of the MTR (Appendix 1, under the environment and climate change priority) include promoting natural resource management. Under ADB’s Water Operational Plan 2011-2020, the annual investment target is $2 billion–$2.5 billion between 2011 and 2020.

As a multilateral development bank, ADB’s legal status differs significantly from that of a commercial bank. ADB’s Charter contains provisions that accord to ADB legal status and certain immunities and privileges in the territories of its members. For this reason, ADB is not subject to water regulations or policies. However, through the E2HSMS for its headquarters, ADB seeks to adhere to international guidance and Philippine legislative requirements related to water consumption. For 2016–2017 under the E2HSMS, ADB aimed to reduce water consumption at headquarters by 4.9% per capita in 2016, and by 5% per capita in 2017.

continued on next page

Table continued

GRI 300—Environmental Topics 85

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Investment Policies, Principles, and Responsibilities. ADB’s water sector investment projects are guided by the following:

(i) ADB’s Water Policy (2001, approved by the BOD), which recognizes Asia and the Pacific’s need for integrated approaches to water management and development;

(ii) the Water Operational Plan 2011–2020 approved by the President in 2011; and

(iii) the Water Financing Program. (discussed in the section on “Providing Water and Sanitation” in the Asian Development Bank Sustainability Report 2018).

(iv)  Environment Operational Directions 2013–2020 (approved by the President).

(discussed in the section on “Pursuing Environmental Sustainability” in the Asian Development Bank Sustainability Report 2018).

The Water Sector Group and the Environment Thematic Group provide operations departments with technical advice and peer review of projects related to the water sector. The water sector encompasses urban infrastructure and services including water supply; wastewater management; drainage; flood management; and agriculture, natural resources, and rural development projects. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD.

ADB’s environment and social safeguards, as detailed in the SPS, require ADB borrowers (clients) to (i) safeguard the life-supporting capacity of water ecosystems; (ii) avoid, or where avoidance is impossible, minimize, or control the intensity or load of pollution discharge; and (iii) examine and incorporate resource conservation into their operations. SPS references the World Bank–IFC EHS Guidelines for the performance levels and measures that are normally acceptable and applicable to projects. The EHS Guidelines include general guidance on wastewater and ambient water quality and water conservation, and sector-specific guidance for projects involving water and sanitation etc. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. ADB categorizes all investments according to their environmental impact, as detailed in the SPS. Direct, indirect, cumulative, and induced impacts of projects on the water environment are assessed in environmental impact assessments for category A environment projects; or initial environmental examinations for category B environment projects prior to approval of the project. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

continued on next page

Table continued

86 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Institutional Water Use Policies, Principles, and Responsibilities. ADB has an integrated E2HSMS certified to ISO 14001 for operating and maintaining its headquarters, and seeks to meet LEED specifications for resource conservation as discussed on Disclosure 302. The E2HSMS policy states that, in operating and maintaining its headquarters, ADB commits to optimizing the use of water resources.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards. This represents an 80% increase from the 65 positions in 2009 when the BOD approved SPS. Training programs offered include orientation on ADB safeguards, environment safeguard modules during quarterly Project Development and Management Workshops, dedicated environment safeguards trainings, and an e-learning module for environment safeguards. (Further details are provided in the section on “Environmental and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.)

Grievances. Disclosure 203 sets out the grievance procedure in relation to investments in the water sector. During the reporting period, one complaint received by the Office of the Compliance Review Panel in 2017 on the proposed Nenskra Hydropower Project in Georgia related to adverse impacts on the water environment (environmental flows). No complaints related to adverse impacts on the water environment were received by the Office of the Special Project Facilitator.

Grievances related to the E2HSMS are handled by OAS.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). In addition to completed water infrastructure listed in Disclosure 203-1, in 2016–2017, the DEfR reported on completed water operations as follows: reduced flood risk for households (3,747,000 households in 2016 and 646,000 in 2017).

Disclosure 203 sets out self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation by ADB’s Internal Evaluation Department (IED). No IED evaluations specific to the water sector were undertaken in 2016–2017, but Disclosure 301 discusses evaluations related to environmentally sustainable growth, a pillar of which is sustainable infrastructure. For project evaluations, emphasis on environmental sustainability has been introduced as a requirement, with effects on pollution levels and natural resource management (as applicable) now forming part of the sustainability assessment.

continued on next page

Table continued

GRI 300—Environmental Topics 87

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Previously in 2014, IED evaluated ADB’s SPS in the Safeguards Operational Review: ADB Processes, Portfolio, Country Systems, and Financial Intermediaries. This was the first of a planned two-step evaluation. IED had five main recommendations: (i) improve quality control of category B and financial intermediary (FI) projects—no specific recommendations in relation to impacts on the water environment were made; (ii) enhance the supervision of safeguards implementation; (iii) improve the reporting of safeguards outcomes; (iv) promote the use of country safeguard systems; and (v) develop more guidance notes for safeguards. The second step, a Real-Time Evaluation of ADB’s Safeguard Implementation Experience Based on Selected Case Studies was completed in 2016. It found ADB’s safeguard framework is seen as a benchmark but it had areas that need strengthening in terms of project design and implementation. Following the 2014 and 2016 evaluations, IED will assess ADB’s effectiveness in achieving its safeguard objectives, and the extent to which the policy principles aspired to by the SPS have been achieved. It will also review the relevance of ADB’s safeguard policy, its architecture to the evolving needs of clients, and the changes in external content of development financing and the internal context of ADB’s diversifying portfolio by 2019.

In accordance with E2HSMS requirements, water conservation and efficiency initiatives at the ADB headquarters are evaluated quarterly by the Water Conservation Committee and presented annually to Management.

ADB achieved its annual E2HSMS target of reducing potable water consumption per capita in both 2016 (2.5% against a target of 4.9%) and 2017 (8% against a target of 5%).

The E2HSMS Management System is internally audited and externally audited by a third-party certifying body as discussed in Disclosure 301.

303-1 Water withdrawal by source

6 Potable municipal water for ADB headquarters is supplied by the Manila Water Company (a private water utility) and stored in three underground tanks. ADB’s rainwater harvesting facility has a total capacity of 220,000 liters (220 cubic meters). Rainwater falling inside ADB headquarters is diverted and stored in aboveground storage tanks. ADB’s total water withdrawal (Table 303-1) is measured as follows:

(i) monthly water bill from the municipal water supply, and(ii) monthly consumption of collected rainwater measured with

flow meters.

Table 303-1: Total Water Withdrawn, 2015–2017 (cubic meters)

Year Municipal Water Rainwater Total

2017 145,889.00 2,441.00 148,330.00

2016 159,613.00 2,506.00 162,119.00

2015 161,894.00 1,006.00 162,900.00

Source: Office of Administrative Services, Asian Development Bank.

Refer to the section on “Resource Use and Conservation” in the Asian Development Bank Sustainability Report 2018 for details of water conservation and efficiency initiatives.

continued on next page

Table continued

88 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

303-3 Water recycled and reused

6, 8, 12 Wastewater from toilets, kitchens, pantries, machine rooms, and other areas of ADB headquarters is discharged to its on-site sewage treatment plant via a network of pipes. The sewage treatment plant processes the wastewater to produce effluent that conforms to standards of the Department of Environment and Natural Resources of the Philippines. Part of the treated wastewater from the sewage treatment plant is recycled and reused for irrigation of green spaces within ADB headquarters. Recycled wastewater is also used for toilet flushing in the headquarters extension building.

Backwash water comes from the filtration process of the on-site domestic water treatment system at the ADB headquarters and is also recycled and reused for irrigation.

Recycled sewage treatment plant wastewater and backwash water are measured through flow meters.

Table 303-3: Total Recycled and Reused Water, 2015–2017 (cubic meters)

Year

Sewage Treatment Plant Wastewater

ReuseBackwash

Water Reuse Total Reuse

Total Reuse, as % of Total Water

Withdrawn 2017 9,483.00 402.81 9,885.81 6.662016 10,190.35 327.00 10,517.35 6.49

2015 12,454.44 383.00 12,837.44 7.88

Source: Office of Administrative Services, Asian Development Bank.

Under the E2HSMS, rainwater is considered recycled or reused water; therefore, the calculations for this disclosure differ from those presented in the section on “Resource Use and Conservation” and Table 3.6 in the Asian Development Bank Sustainability Report 2018, as GRI considers rainwater as a source of water withdrawn.

304 Biodiversity, 2016 Edition 304 Biodiversity –

management approach

Refer to the section on “Environment” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Biodiversity is (externally) material to ADB because (i) it invests in projects in natural resources management, and supports environmentally sustainable growth; and (ii) investment projects funded by ADB, especially infrastructure-related projects, have the potential to adversely impact biodiversity and natural resources during construction and operation.

The management approach covers all of ADB’s operations.

continued on next page

Table continued

GRI 300—Environmental Topics 89

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

MANAGEMENT APPROACH

ADB recognizes that the globally significant biodiversity and natural resources of the Asia and Pacific region provide sustenance for millions of the region’s residents, such as seafood and agricultural products, fodder, fuelwood, timber, and medicine. These resources serve a vital role in assimilating wastes, recycling nutrients, regulating the climate, and recharging aquifers. The following policies and procedures are applied in considering investments for natural resources conservation; and in approving investments in other sectors (especially infrastructure) to ensure that adverse impacts on biodiversity are avoided, minimized, mitigated, and/or compensated.

Commitment, Goals, and Targets. Disclosure 203 sets out ADB’s commitment, goals, and targets in relation to investments, including those in natural resources conservation. Key actions of the MTR (Appendix 1, under the environment and climate change priority) include promoting natural resource management to protect and maintain the productive potential of land, forests, and natural resources.

Policies, Procedures, and Responsibilities. ADB’s investment projects in natural resource conservation are guided by the following:

(i) Environment Operational Directions 2013–2020 (approved by the President); and

(ii) Operational Plan for Agriculture and Natural Resources: Promoting Sustainable Food Security in Asia and the Pacific in 2015–2020 (approved by the President).

(discussed in the section on “Pursuing Environmental Sustainability” in the Asian Development Bank Sustainability Report 2018).

The second pillar of the Environment Operational Directions 2013-2020 supports investments in natural capital to (i) help reverse its ongoing decline; and (ii) ensures that environmental goods and services can sustain future economic growth and well-being, build climate resilience, and contribute to carbon sequestration. ADB’s approach to investing in natural capital includes (i) strengthening and mainstreaming country safeguard systems for biodiversity; (ii) promoting investments and regional cooperation for managing large-scale ecosystems; and (iii) developing knowledge, innovations, and partnerships for the valuation of ecosystem services. The Environment Thematic Group and the Rural Development and Food Security Thematic Group provide operations departments with technical advice and peer review of projects related to natural resources management. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD.

continued on next page

Table continued

90 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB aims to promote the sustainability of its project outcomes by protecting the environment and people through its safeguards. ADB’s environment and social safeguards, as detailed in the SPS, aim to ensure that ADB-supported projects use natural resources in a sustainable manner and achieve at least “no net loss” of biodiversity by avoiding, minimizing, mitigating, or (as a last resort) compensating for impacts (e.g., by proposing biodiversity offsets).

Under the SPS, specific policy principles for projects in modified habitats, natural habitats, critical habitats (a subset of both modified and natural habitat that includes areas with high biodiversity value) and legally protected areas must be followed. Critical habitats are defined in SPS as including (i) habitats required for the survival of critically endangered or endangered species as defined by the Word Conservation Union’s Red List of Threatened Species or in national legislation; (ii) areas having special significance for endemic or restricted-range species; (iii) sites that are critical for the survival of migratory species; (iv) areas supporting globally significant concentrations or numbers of individuals of congregatory species; (v) areas with unique assemblages of species or that are associated with key evolutionary processes or provide key ecosystem services; and (vi) areas having biodiversity of significant social, economic, or cultural importance to local communities. ADB will not undertake project activities in critical habitats unless (i) there are no measurable adverse impacts, or likelihood of such, on the critical habitat that could impair its high biodiversity value or the ability to function; (ii) the project is not anticipated to lead to a reduction in the population of any recognized endangered or critically endangered species, or a loss in area of the habitat concerned, such that the persistence of a viable and representative host ecosystem would be compromised; and (iii) mitigation measures are designed to achieve at least “no net loss” of biodiversity. For legally protected areas, in addition to the requirements for critical habitats, a project must (i) act in a manner consistent with defined protected area management plans; (ii) consult with the protected area’s management, local communities, and other interested stakeholders; and (iii) implement additional programs (as appropriate) to promote and enhance the conservation aims of the protected area.

ADB’s SPS (Appendix 5) prohibits investment in production or trade in any wildlife or wildlife products regulated under the Convention on International Trade in Endangered Species. Commercial logging operations or the purchase of logging equipment for use in primary tropical moist forests or old-growth forests, and marine and coastal fishing practices harmful to vulnerable and protected species in large numbers and damaging to marine biodiversity and habitats, are also prohibited.

continued on next page

Table continued

GRI 300—Environmental Topics 91

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. ADB categorizes all investments according to their environmental impact, as detailed in the SPS. Direct, indirect, cumulative, and induced impacts on biodiversity an natural resources are assessed in environmental impact assessments for category A environment projects or initial environmental examinations for category B environment projects prior to approval of the project. Management considers the results of safeguards due diligence in approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS environment requirements.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards. This represents an 80% increase from the 65 positions in 2009 when the BOD approved SPS. Training programs offered include orientation on ADB safeguards, environment safeguard modules during quarterly Project Development and Management Workshops, dedicated environment safeguards trainings, and an e-learning module for environment safeguards. Trainings included addressing biodiversity impacts in project design. (Further details are provided in the section on “Environmental and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.)

Grievances. Disclosure 203 sets out the grievance procedure in relation to investments and biodiversity impacts. During the reporting period, one complaint was received by the Office of the Compliance Review Panel in 2017 related to biodiversity impacts of the Sustainable Urban Transport Investment Program in Georgia. No complaints related to biodiversity impacts were received by the Office of the Special Project Facilitator.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). No indicators in the DEfR specifically relate to biodiversity impacts, although in 2016–2017, the target for at least 55% of projects to contribute to the environmentally sustainable growth agenda by 2020, including projects that contribute to natural resource conservation, was met (with a 3-year average of 57% for 2014–2016 and 58% for 2015–2017).

continued on next page

Table continued

92 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Disclosure 203 sets out self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation by ADB’s Internal Evaluation Department (IED). No IED evaluations specific to biodiversity impacts were undertaken in 2016–2017, but Disclosure 301 discusses evaluations in relation to environmentally sustainable growth, a subset of which is natural resources conservation. For project evaluations, emphasis on environmental sustainability has been introduced as a requirement, and effects on biodiversity and natural resource management (as applicable) now form part of the sustainability assessment.

Previously in 2014, IED evaluated ADB’s SPS in the Safeguards Operational Review: ADB Processes, Portfolio, Country Systems, and Financial Intermediaries. This was the first of a planned two-step evaluation. IED had five main recommendations: (i) improve quality control of categories B and FI projects—including in relation to biodiversity, for which further ADB staff training is recommended; (ii) enhance the supervision of safeguards implementation; (iii) improve the reporting of safeguards outcomes; (iv) promote the use of country safeguard systems; and (v) develop more guidance notes for safeguards. The second step, a Real-Time Evaluation of ADB’s Safeguard Implementation Experience Based on Selected Case Studies was completed in 2016. It found ADB’s safeguard framework is seen as a benchmark but it had areas that need strengthening in terms of project design and implementation. Following the 2014 and 2016 evaluations, IED will assess ADB’s effectiveness in achieving its safeguard objectives, and the extent to which the policy principles aspired to by the SPS have been achieved. It will also review the relevance of ADB’s safeguard policy, its architecture to the evolving needs of clients, and the changes in external content of development financing and the internal context of ADB’s diversifying portfolio by 2019.

304-2 Significant impacts of activities, products, and services on biodiversity

6, 14, 15 Table 304-2 details the number of ADB investments and technical assistance projects that included elements of natural resources conservation in 2016–2017, and which would have had a positive impact on biodiversity.

Projects classified as natural resources conservation under the project classification system address the following:

(i) the protection, conservation, and sustainable use of natural resources, ecosystems, and biodiversity;

(ii) land conservation, protection, and rehabilitation, including control and mitigation of land degradation, desertification, and effects of drought; and

(iii) reduction of vulnerability to climate variability and change and natural disasters through improved natural resource conservation.

continued on next page

Table continued

GRI 300—Environmental Topics 93

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 304-2: Natural Resources Conservation Projects, 2016–2017

(number of projects)Project Type 2016 2017Investments (loans, grants, equity, guarantees)

15 13

Technical Assistance 23 21Source: Sustainable Development and Climate Change Department, Asian Development Bank.

ADB investments that involve the construction of infrastructure can also have a negative impact. They may result in changes to land and water use (e.g., removing tree cover for road construction or damming rivers for hydropower projects), which may impact biodiversity through conversion or degradation of habitat. Unsustainable levels of natural resource consumption and elevated levels of air, water, soil, and noise pollution associated with the construction and operation of infrastructure can reduce the carrying capacity of ecosystems. Infrastructure projects also create the possibly of introducing invasive species to a project area. ADB seeks to avoid, minimize, mitigate, and/or compensate for such adverse impacts through application of the SPS, which includes requirements for biodiversity conservation and sustainable natural resource management as discussed in Disclosure 304.

In 2016, ADB approved 12 category A environment and 75 category B environment projects; and, in 2017, 11 category A environment and 70 category B environment projects. Due to the potential for the project areas to support critical habitat and/or the presence of a legally protected area, ADB paid particular attention to ensuring the adequate assessment and future management of biodiversity in nine category A environment projects:

2016(i) South Asia Subregional Economic Cooperation (SASEC)

Chittagong-Cox’s Bazar Railway Project in Bangladesh(ii) SASEC Roads Improvement Project in Nepal (iii) Muara Laboh Geothermal Power in Indonesia (iv) Tangguh Liquified Natural Gas Expansion in Indonesia (v) Green Power Development and Energy Efficiency Improvement

Investment Program—Tranche 2 in Sri Lanka

2017(i) Wind Power Generation Project in Sri Lanka(ii) Batumi Bypass Road Project in Georgia(iii) Jaffna and Kilinochchi Water Supply Project in Sri Lanka(iv) Mahaweli Water Security Investment Program—Tranche 2 in

Sri Lanka

continued on next page

Table continued

94 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The details of the biodiversity impacts and management measures to be implemented are available in the projects’ environmental impact assessment reports, and in environmental monitoring reports disclosed on the ADB website.

ADB also works with its partners to strengthen biodiversity safeguard capacities and performance by (i) strengthening country safeguard systems and capacities with respect to biodiversity; (ii) working with environmental nongovernment organizations to increase access to and use of biodiversity data and information systems; and (iii) developing guidance and training resources for biodiversity impact assessment, including knowledge products with good practice cases studies. ADB promotes investments in and regional cooperation for the management of Asia’s large-scale ecosystems, many of which transcend national boundaries and require coordinated management approaches. These include places of outstanding human and ecological significance, such as (i) the Coral Triangle, which supports the greatest diversity of coastal and marine ecosystem on the planet and whose fisheries exports total almost $4 billion annually; (ii) the Greater Mekong Subregion, with its globally significant biodiversity, forest, carbon stocks, and largest inland fishery in the world; (iii) the Heart of Borneo, with the third-largest rainforest worldwide; and (iv) the Himalayan Mountain Range, a biodiversity hot spot and the source of freshwater for more than 1 billion people.

305 Emissions, 2016 Edition 305 Emissions –

management approach

12, 13, 14, 15

Refer to the sections on “Climate Change and Disaster Risk Management” and “Resource Use and Conservation” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Greenhouse gas (GHG) emissions are (externally and internally) material to ADB because (i) the Asia and Pacific region is vulnerable to the impacts of climate change, and ADB invests in projects that result in significant GHG emissions during construction and operation, including in the energy and transport sectors; and (ii) in supporting environmentally sustainable growth, ADB must “walk the talk” in its own operations.

The management approach for investments covers all of ADB’s operations. For organizational GHG emissions, the management approach and reporting for subsequent disclosures only covers ADB headquarters, including official travel that was booked from headquarters. OAS has in place a system and procedures to collect information on GHG emissions from its field offices (refer to the section on “Field Offices” in the Asian Development Bank Sustainability Report 2018) but cannot yet determine ADB’s overall GHG emissions.

continued on next page

Table continued

GRI 300—Environmental Topics 95

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB’s GHG inventory does not include GHG emissions from its investment portfolio. ADB is a member of the steering committee of the international financial institutions’ Working Group to Harmonize Project-Level GHG Accounting. As committed in its Climate Change Operational Framework 2017–2030, ADB is also currently developing a methodology for estimating and reporting on GHG emissions related to its investment portfolio. In this context, ADB has already initiated work on the development of a baseline for the development and implementation of a methodology for tracking and reporting progress on the GHG emissions of ADB’s project portfolio, with the overall objective of peaking portfolio-wide GHG emissions by 2030 at the latest.

MANAGEMENT APPROACH

The following policies and procedures are applied in considering investments and in managing ADB’s GHG emissions from headquarters. Measures adopted at the ADB headquarters help influence activities in all its field offices and promote climate change mitigation to DMCs.

Commitment, Goals, and Targets. Disclosure 203 sets out ADB’s commitment, goals and targets in relation to investments in the energy sector. Key actions of the MTR (Appendix 1, under the environment and climate change priority) include investing $2 billion annually in clean energy; including energy efficiency (the same target is included in ADB’s Clean Energy Program); and increasing finance for sustainable transport such as railways, waterways, and urban transport. In 2015, ADB also committed to invest $6 billion climate finance by 2020, $4 billion of this for climate change mitigation.

As a multilateral development bank, ADB’s legal status differs significantly from that of a commercial bank. ADB’s Charter contains provisions that accord to ADB legal status and certain immunities and privileges in the territories of its members. For this reason, ADB is not subject to emission regulations or policies. However, through the E2HSMS for its headquarters, ADB seeks to adhere to international guidance and Philippine legislative requirements related to GHG emissions. ADB currently does not have targets in place for GHG emission reduction (although its targets for energy consumption as detailed in Disclosure 301 will contribute) but continues to improve on existing efforts each year. While ADB does not have targets, its 49th and 50th Annual Meetings were carbon neutral and it purchased offsets to fully cover its 2016 emissions from headquarters. Carbon credits were purchased from a 50.4 MW wind farm in Maharashtra, India. Once verified, use of offsets against ADB headquarters, 2017 GHG emissions will be confirmed.

continued on next page

Table continued

96 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Investment Policies, Principles, and Responsibilities. ADB’s energy and transport sector investment projects are guided by the following:

(i) ADB’s Energy Policy (2009, approved by the BOD); (ii) the Clean Energy Program; (iii) the Energy for All Initiative; and(iv) Sustainable Transport Initiative Operational Plan approved by the

President. (as discussed in the section on “Investing in Sustainable Infrastructure” in the Asian Development Bank Sustainability Report 2018).

(v) Environment Operational Directions 2013–2020 (approved by the President); and

(vi) Climate Change Operational Framework 2017–2030 (approved by the President).(discussed in the section on “Pursuing Environmental Sustainability” in the Asian Development Bank Sustainability Report 2018).

It is recognized that Asia and the Pacific is a major and growing source of GHG emissions, and that future climate change will be less severe only if GHG emissions are reduced in line with mitigation targets set out in DMCs’ nationally determined contributions requiring a clean, low-carbon development path. The amount of carbon emissions avoided in ADB’s investment portfolio compared to a business-as-usual scenario is recorded for every project and disclosed on the “Project At a Glance” page in the Report and Recommendation of the President. For energy sector emissions, reductions are calculated following the Guidelines for Estimating Greenhouse Gas Emissions of ADB Projects. For the transport sector, the Guidelines for Estimating Greenhouse Gas Emissions of Asian Development Bank Projects: Additional Guidance for Transport Projects is followed. The Climate Change and Disaster Risk Management Thematic Group provides operations departments with technical advice on climate change mitigation. Management considers adherence to ADB’s policies in approving an investment project for submission to the BOD.

ADB’s environment and social safeguards, as detailed in the SPS, require ADB borrowers (clients) to promote the reduction of GHG emissions. For projects producing significant quantities of GHG emissions (100,000 tons carbon dioxide [CO2] CO2-equivalent), the direct and indirect GHG emissions should be quantified. Quantification and monitoring will be undertaken annually in accordance with internationally recognized methodologies. In addition, the borrower (client) is required to evaluate technically and financially feasible and cost-effective options to reduce of offset GHG emissions and to pursue appropriate options. SPS references the World Bank–IFC EHS Guidelines for the performance levels and measures that are normally acceptable and applicable to projects. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. ADB categorizes all investments according to their environmental impact, as detailed in the SPS. Direct, indirect, cumulative, and induced impacts of projects on the water environment

continued on next page

Table continued

GRI 300—Environmental Topics 97

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

are assessed in environmental impact assessments for category A environment projects; or initial environmental examinations for category B environment projects prior to approval of the project. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

Organizational Emissions Policies, Principles, and Responsibilities. ADB has an integrated E2HSMS for operating and maintaining its headquarters and seeks to meet LEED specifications for resource conservation, as discussed on Disclosure 302. The E2HSMS policy states that in operating and maintaining its headquarters, ADB commits to reducing its carbon footprint. ADB follows the ISO 14064-1 specification and guidance at the organization level for quantification and reporting of GHG emissions and removals in establishing its headquarters’ carbon footprint.

This part of ISO 14064 details principles and requirements for designing, developing, managing, and reporting organization-level GHG inventories. It includes requirements for determining GHG emission boundaries, quantifying an organization’s GHG emissions, and identifying specific company actions or activities aimed at improving GHG emission management. It also includes requirements and guidance on inventory quality management, reporting, internal auditing and the organization’s responsibilities for verification activities.

OAS maintains ADB’s GHG inventory for headquarters, which includes Scope 1 (direct emissions), Scope 2 (energy indirect emissions), and Scope 3 (other indirect emissions). The GHG inventory meets the ISO 14064 standard on GHG Inventory for Organizations. To fulfill ADB’s commitment to further reduce its GHG emissions, an inventory of GHG emission sources of ADB headquarters was initiated in October 2007 covering 2005 and 2006. The inventory study provided ADB with a GHG emission baseline in accordance with Intergovernmental Panel on Climate Change (IPCC) Guidelines and GHG Protocol’s Corporate Standard developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The 2007 greenhouse gas emission inventory report covered the accounting and reporting of CO2 and fluorinated gases, which are mainly hydrofluorocarbon (HFC) and hydrochlorofluorocarbon. ADB had its first third-party verification in October 2015 to validate its GHG emissions quantification and to ensure that the requirements of ISO 14064-1 were considered in quantification, monitoring, and reporting of its 2013–2014 GHG emissions. Following this, ADB set 2013 as the new GHG emission inventory base year.

continued on next page

Table continued

98 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Resources. ADB’s 3-year Work Program and Budget Framework approved by the BOD sets out the budget and staff requirements for implementing its 3-year operational and organizational work program as discussed in Disclosure 201. As of end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards. This represents an 80% increase from the 65 positions in 2009 when the BOD approved SPS. Training programs offered include orientation on ADB safeguards, environment safeguard modules during quarterly Project Development and Management Workshops, dedicated environment safeguards trainings, and an e-learning module for environment safeguards. (Further details are provided in the section on “Environmental and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.)

Grievances. Disclosure 203 sets out the grievance procedure in relation to emissions related to investments. During the reporting period, one complaint was received in 2017 related to air quality and noise emissions for the Sustainable Urban Transport Investment Program in Georgia. OSPF deemed one complaint for the Sustainable Urban Transport Investment Program in Georgia and one for the Sustainable Urban Development Investment Program in Armenia eligible as efforts to resolve the concerns or problems had not been successful.

Grievances related to the E2HSMS are handled by OAS.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). The DEfR reports on GHG emission reductions as a result of clean energy projects or components compared to a business-as-usual scenario as follows:

(i) GHG emission reduction of 1,954,000 tons CO2-equivalent in 2016; and

(ii) GHG emission reduction of 4,133,000 tons CO2-equivalent in 2017.

Disclosure 203 sets out self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation by ADB’s Internal Evaluation Department (IED). IED evaluations specific to climate change mitigation are discussed in Disclosure 201-2, while Disclosure 301 discusses evaluations related to environmentally sustainable growth, a pillar of which is climate action. For project evaluations, emphasis on environmental sustainability and climate change mitigation has been introduced as a requirement, and effects on GHG emissions (as applicable) now form part of the sustainability assessment.

continued on next page

Table continued

GRI 300—Environmental Topics 99

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Previously in 2014, IED evaluated the SPS in the Safeguards Operational Review: ADB Processes, Portfolio, Country Systems, and Financial Intermediaries. This was the first of a planned two-step evaluation. IED had five main recommendations: (i) improve quality control of categories B and FI projects—including in relation to quantifying GHG emissions, for which further ADB staff training is recommended; (ii) enhance safeguards supervision; (iii) improve the reporting of safeguards outcomes; (iv) promote the use of country safeguards systems; and (v) develop more guidance notes. The second part, a Real-Time Evaluation of ADB’s Safeguard Implementation Experience Based on Selected Case Studies, was completed in 2016 as discussed in Disclosure 304.

In accordance with E2HSMS requirements, energy conservation and efficiency initiatives at the ADB headquarters (contributing to GHG emissions reduction) are evaluated quarterly by the Energy Conservation Committee and presented annually to Management. The E2HSMS Management System is internally audited and externally audited by a third-party certifying body as discussed in Disclosure 301.

305-1 Direct (Scope 1) GHG emissions

3, 12, 13, 14, 15

Direct emissions classified under Scope 1 of the GHG Protocol’s Corporate Standard are those from sources owned and controlled by ADB. There are four sources identified at the ADB headquarters consisting of (i) combustion of diesel fuel for power generator sets and fire pump system; (ii) combustion of LPG for cooking and heating equipment; (iii) combustion of fuel of ADB-owned vehicles for official trips; and (iv) fugitive emissions of refrigerants from the installation, operation and maintenance, and disposal of refrigeration and air-conditioning equipment.

ADB’s Scope 1 GHG emissions for 2016 totaled 459.99 tons CO2-equivalent and for 2017 totaled 507.65 tons CO2-equivalent (Table 305-1). The baseline year for GHG reporting is 2013. This was established following a third-party verification audit for 2013–2014 GHG emissions in compliance with ISO 14064-1.

The methodologies and calculation tools used in the inventory and for reporting concur with the following:

(i) Revised Edition of GHG Protocol: A Corporate Accounting and Reporting Standard developed by WRI/WBCSD;

(ii) 2006 IPCC Guidelines for National GHG Inventories; (iii) United Kingdom’s Department of Environment, Food and Rural

Affairs (Defra) 2013 Environmental Reporting Guidelines; and (iv) International Civil Aviation Organization (ICAO) guidelines

related to CO2 emissions from air travel.

The methodologies and calculations tools conform to the requirements of ISO 14064-1:2006 Standard for GHG Inventory of Organizations. The calculations include the United Nations Framework Convention on Climate Change (UNFCCC) and Kyoto Protocol GHGs: CO2 and HFCs. GHG emissions are consolidated based on an “Operational Control Approach” as defined in ISO 14064-1:2006 Standard.

continued on next page

Table continued

100 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

To calculate GHG emissions for Scope 1, ADB measures

(i) annual fuel consumption (diesel or LPG) in liters or kg,(ii) annual fuel consumption for road travel (diesel or gasoline) in

liters,(iii) annual electricity consumption from metered solar panels in

kWh (assumed to have an emission factor of zero).

Fugitive emissions of refrigerants (HFC 134a, HFC 404a, HFC 407c, HCFC 123, HFC 410a, and HCFC 22) from the installation, operation and maintenance, and disposal of refrigeration and air-conditioning equipment are calculated using the screening method as described in the Defra 2013 Environmental Reporting Guidelines.

Table 305-1: Scope 1: Direct Greenhouse Gas Emissions for ADB Headquarters, 2013–2016

(tons CO2-equivalent)Source 2013 2014 2015 2016 2017a

Combustion of diesel fuel for power generators and fire pump system

39.44 78.65 31.05 52.84 100.03

Combustion of LPG for cooking and heating equipment

281.13 340.84 278.98 248.53 253.22

Combustion of fuel of ADB-owned vehicles for official trips

144.80 143.78 133.24 135.58 138.45

Fugitive emissions of refrigerants from installation, operation and maintenance and disposal of refrigeration and air-conditioning equipment

61.88 15.79 21.09 23.04 15.95

Total 527.25 579.06 464.36 459.99b 507.65CO2 = carbon dioxide, LPG = liquefied petroleum gas.a Indicative, subject to third-party verification. b Fully offset with the purchase of 12,000 Certified Emission Reductions from a 50.4-megawatt

wind farm. Source: Office of Administrative Services, Asian Development Bank.

305-2 Energy indirect (Scope 2) GHG emissions

3, 12, 13, 14, 15

Energy indirect emissions under Scope 2 are GHG emissions from the generation of purchased electricity for ADB headquarters. ADB signed a retail supply agreement with Aboitiz Power to supply ADB headquarters with electricity coming from 100% geothermal sources distributed through the Manila Electric Company. This is a 5-year renewable energy supply contract following the Retail Competition and Open Access through the Electric Power Industry Reform Act of the Philippines’ Department of Energy.

ADB’s Scope 2 GHG emissions for 2016 totaled 1,125.94 tons CO2-equivalent, and for 2017 totaled 854.20 tons CO2-equivalent (Table 305-2). The baseline year for GHG reporting is 2013, which was established following a third-party verification audit of 2013–2014 GHG emissions in compliance with ISO 14064-1.

continued on next page

Table continued

GRI 300—Environmental Topics 101

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The methodologies and calculation tools used in the inventory and for reporting are in accordance with the following:

(i) Revised Edition of GHG Protocol: A Corporate Accounting and Reporting Standard developed by the WRI/WBCSD,

(ii) 2006 IPCC Guidelines for National GHG Inventories, (iii) Defra 2013 Environmental Reporting Guidelines, and (iv) ICAO Guidelines related to CO2 emissions from air travel.

The methodologies and calculations tools conform to the requirements of ISO 14064-1:2006 Standard for GHG Inventory of Organizations. The calculations include the UNFCCC and Kyoto Protocol GHGs: CO2. GHG emissions are consolidated based on an “Operational Control Approach” as defined in ISO 14064-1:2006 Standard.

To calculate GHG emissions for Scope 2, total electricity consumption is monitored monthly based on Aboitiz Power billing statements. Total electricity consumption of ADB headquarters is reported to be 19,124.98 MWh in 2016 and 18,421.14 MWh in 2017. Annual electricity consumption from geothermal sources is multiplied with the applicable emission factor for the respective geothermal power plant. Electricity consumption of major equipment (lighting and receptacles, chiller and auxiliaries, ventilation fans, and information and communication technology equipment) is also being monitored through submeters.

Table 305-2: Scope 2: Indirect Greenhouse Gas Emissions for ADB Headquarters, 2013–2016

(tons CO2-equivalent)Item 2013 2014 2015 2016 2017a

Emission from the generation of purchased electricity

10,532.78 2,353.05 1,015.23 1,125.94b 854.20

CO2 = carbon dioxide.a Indicative, subject to third-party verification. b Fully offset with the purchase of 12,000 Certified Emission Reductions from a 50.4-megawatt wind farm. Source: Office of Administrative Services, Asian Development Bank.

continued on next page

Table continued

102 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

305-3 Other indirect (Scope 3) GHG emissions

3, 12, 13, 14, 15

ADB’s Scope 3 GHG emissions (including business travel booked from headquarters) for 2016 totaled 9,327.60 tons of CO2-equivalent and for 2017 totaled 9,430.26 tons of CO2-equivalent (Table 305-3). The baseline year for GHG reporting is 2013, which was established following a third-party verification audit of 2013–2014 GHG emissions in compliance with ISO 14064-1.

The methodologies and calculation tools used in the inventory and for reporting are in accordance with the following:

(i) Revised Edition of GHG Protocol: A Corporate Accounting and Reporting Standard developed by the WRI/WBCSD,

(ii) 2006 IPCC Guidelines for National GHG Inventories, (iii) Defra 2013 Environmental Reporting Guidelines, and (iv) ICAO Guidelines related to CO2 emissions from air travel.

The methodologies and calculations tools conform to the requirements of ISO 14064-1:2006 Standard for GHG Inventory of Organizations. Calculations include the UNFCCC and Kyoto Protocol GHGs: CO2 and HFCs. GHG emissions are consolidated based on an “Operational Control Approach” as defined in the ISO 14064-1:2006 Standard.

Table 305-3: Scope 3: Indirect Greenhouse Gas Emissions for ADB Headquarters, 2013–2016

(tons CO2-equivalent)Source 2013 2014 2015 2016 2017a

Air travel of ADB staff on official business

7,279.26 7,047.20 6,741.49 7,227.91b 7,405.94

Hotel stays of ADB staff on official business

2,188.39 1,994.83 2,006.09 2,099.69 2,024.32

Total 9,467.65 9,042.03 8,747.58 9,327.60c 9,430.26

CO2 = carbon dioxide.a Indicative, subject to third-party verification. b There is an increase in the number of flights from 2015 to 2016 by 1,298. c Fully offset with the purchase of 12,000 Certified Emission Reductions from a 50.4-megawatt

wind farm. Source: Office of Administrative Services, Asian Development Bank.

continued on next page

Table continued

GRI 300—Environmental Topics 103

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

305-4 GHG emissions intensity

13, 14, 15 Based on the GHG emissions presented in Disclosures 305-1, 305-2, and 305-3 ADB’s GHG emissions per capita based on building occupancy (estimate of staff, consultants, and contractors at headquarters) were 1.82 tons of CO2-equivalent in 2016 and 1.76 tons of CO2-equivalent in 2017 (Table 305-4a). Based on the GHG emissions presented in Disclosures 305-1, 305-2, and 305-3 ADB’s GHG emissions per square meter of floor area were 0.07 tons of CO2-equivalent in 2016 and in 2017 (Table 305-4b).

The calculations include the UNFCCC and Kyoto Protocol GHGs: CO2 and HFCs. Table 305-4a: Greenhouse Gas Emissions Intensity per Capita for

ADB Headquarters, 2015–20162015 2016 2017a

Total GHG emissions scopes 1, 2, and 3 (tons CO2-equivalent)

10,227.17 10,913.53 10,792.12

Building occupancyb (persons) 5,930 5,995 6,144

GHG emissions intensity per capita 1.72 1.82c 1.76

CO2 = carbon dioxide, GHG = greenhouse gas.a Indicative, subject to third-party verification. b Building occupancy is based on an estimate by ADB’s Office of Administrative Services of staff, consultants, contractors, service providers, and non-ADB personnel who are based at the ADB headquarters (Disclosure 102-48). c Fully offset with the purchase of 12,000 Certified Emission Reductions from a 50.4-megawatt wind farm.Source: Office of Administrative Services, Asian Development Bank.

Table 305-4b: Greenhouse Gas Emissions Intensity by Floor Area for ADB Headquarters, 2015–2016

Source 2015 2016 2017a

Total GHG emissionsScopes 1, 2, and 3(tons CO2-equivalent)

10,227.17 10,913.53 10,792.12

Floor areab (m2) 144,024.50 144,024.50 144,024.50GHG intensity (per m2) 0.071 0.076c 0.075

CO2 = carbon dioxide, GHG = greenhouse gas, m2 = square meter.a Indicative, subject to third-party verification.b  Floor area is based on computations undertaken for Leadership in Energy and Environmental

Design (LEED) certification. (As noted in Disclosure 102-48, in previous Sustainability Reports the floor area was reported as 160,210 m2, which included covered parking areas and unoccupied areas of the headquarters extension.) As of 2016, ADB has revised the methodology for measuring its gross floor area, resulting in a floor area of 144,025 m2.

c  Fully offset with the purchase of 12,000 Certified Emission Reductions from a 50.4-megawatt wind farm.

Source: Office of Administrative Services, Asian Development Bank.

continued on next page

Table continued

104 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

305-5 Reduction of GHG emissions

13, 14, 15 Based on the GHG emissions presented in Disclosures 305-1, 305-2, and 305-3, ADB’s GHG emissions in 2016 were 6.71% higher than in 2015 (Table 305-5a) due to an increase in electricity purchased and air travel, but 46.84% lower than the baseline year for GHG monitoring (Table 305-5b). Scope 1 emissions decreased by 13% between 2013 and 2016; Scope 2 emissions decreased by 90% because in 2014 ADB switched from nonrenewable grid power to a geothermal source, which is considered carbon neutral; and Scope 3 emissions decreased by 1.48%.

Based on the GHG emissions presented in Disclosures 305-1, 305-2, and 305-3, ADB’s GHG emissions in 2017 were 1.11% lower than in 2016 (Table 305-5c) but 47.43% lower than the baseline year for GHG monitoring (Table 305-5d). Scope 1 emissions decreased by 3.72% between 2013 and 2017; Scope 2 emissions decreased by 91.89% because in 2014 ADB switched from nonrenewable grid power to a geothermal source, which is considered carbon neutral; and Scope 3 emissions decreased by 0.39%.

The calculations include the UNFCCC and Kyoto Protocol GHGs: CO2 and HFCs.

For details of GHG emission reduction initiatives, refer to the section on “Resource Use and Conservation” in the Asian Development Bank Sustainability Report 2018.

Table 305-5a: Change in Greenhouse Gas Emissions from 2015 to 2016

(tons CO2-equivalent)Source 2015 2016 Change Change (%)Scope 1 464.36 459.99 (4.37) (0.94)Scope 2 1,015.23 1,125.94 110.71 10.90Scope 3 8,747.58 9,327.60 580.02 6.63Total 10,227.17 10,913.53 686.36 6.71

( ) = negative, CO2 = carbon dioxide.Source: Office of Administrative Services, Asian Development Bank.

Table 305-5b: Change in Greenhouse Gas Emissions from Base Year 2013 to 2016

(tons CO2-equivalent)Source 2013 2016 Change Change (%)Scope 1 527.25 459.99 (67.26) (12.76)Scope 2 10,532.78 1,125.94 (9406.84) (89.31)Scope 3 9,467.65 9,327.60 (140.05) (1.48)Total 20,527.68 10,913.53 (9614.15) (46.84)

( ) = negative, CO2 = carbon dioxide.Source: Office of Administrative Services, Asian Development Bank.

continued on next page

GRI 300—Environmental Topics 105

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 305-5c: Change in Greenhouse Gas Emissions from 2016 to 2017

(tons CO2-equivalent)Source 2016 2017 Change Change (%)

Scope 1 459.99 507.65 47.66 10.36

Scope 2 1,125.94 854.20 (271.74) (24.13)

Scope 3 9,327.60 9,430.26 102.66 1.10

Total 10,913.53 10,792.12 (121.41) (1.11)

( ) = negative, CO2 = carbon dioxide.Source: Office of Administrative Services, Asian Development Bank.

Table 305-5d: Change in Greenhouse Gas Emissions from Base Year 2013 to 2017

(tons CO2-equivalent)Source 2013 2017 Change Change (%)

Scope 1 527.25 507.65 (19.6) (3.72)

Scope 2 10,532.78 854.2 (9,678.58) (91.89)

Scope 3 9,467.65 9,430.26 (37.39) (0.39)

Total 20,527.68 10,792.12 (9,735.56) (47.43)

( ) = negative, CO2 = carbon dioxide.Source: Office of Administrative Services, Asian Development Bank.

GRI = Global Reporting Initiative, SDG = Sustainable Development Goal.Source: Asian Development Bank.

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

401 Employment, 2016 Edition401 Employment –

management approach

Refer to the section on “Engaging the Workforce” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Employment is (internally) material to ADB because a highly skilled and motivated workforce is needed to prepare and administer the projects, and disseminate knowledge and information, which are key to ADB providing the support needed and expected by its developing member countries (DMCs).

The management approach for employment covers all of ADB’s operations for staff, consultants, contractors and service providers, including those based in ADB headquarters and all field offices.

MANAGEMENT APPROACH

The following policies and procedures are applied in managing employment so that ADB can fully leverage its diverse staff and other members of its workforce (consultants, and contractors or service providers) to provide the support needed and expected by its DMCs.

Commitment, Goals, and Targets. The Midterm Review (MTR) of Strategy 2020 identifies 10 strategic priorities to achieve ADB’s vision of an Asia and Pacific region free of poverty. One of these is the need to organize to meet new challenges. Key actions include aligning and strengthening staff skills to deliver strategic priorities; nurturing and retaining technical talent to build sector expertise; and providing more staff incentives for results, innovation, and partnerships (MTR Action Plan, Appendix 1).

ADB’s Our People Strategy (2011) notes that “ADB seeks and develops people who are technically excellent, passionate about our mission, and pragmatic in delivering effective, innovative development solutions, in a collegial work environment characterized by integrity, creativity, and empathy with our clients.” The strategy’s three goals are to achieve and maintain (i) a strong mix of high caliber, motivated, client-responsive staff working in partnership internally and externally; (ii) inspiring leadership with proactive and effective people management; and (iii) a supportive and enabling workplace environment and culture. To this end, ADB seeks to recruit highly qualified people and provide a working environment conducive to top performance while also achieving an adequate work–life balance and providing advice and training for career development.

GRI 400: Social Topics

continued on next page

GRI 400—Social Topics 107

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Levels 4 of ADB’s Corporate Results Framework approved by the BOD under its structured program of Managing for Development Results encompass ADB’s overall targets directly related to staff management.

Policies, Principles, and Responsibilities. The Budget, Personnel, and Management System Department (BPMSD) provides advice and services regarding budget, staff position management, human resources, staff development, benefits, and compensation for employment. ADB recruits staff from among its members. It has three categories of staff—international, national, and administrative. Staff employment and compensation are guided by personnel policies set out in the Administrative Orders to be followed in the management of all staff.

In 2016–2017, the following Administrative Orders were revised:

• Administrative Orders 2.01 (Recruitment and Appointment) (2018) and 2.03 (Selection, Talent and Position Management) (2018) to provide for (i) recruitment reforms and in changes in selection processes; and (ii) position management and talent management reforms, including performance management.

• Administrative Order 2.02 (Code of Conduct) (2017) to provide for (i) changes in bullying and harassment policy, (ii) higher expectations of managerial conduct, (iii) staff values, (iv) staff’s duty to report, (v) delegation of approval authority, and (vi) strengthened provisions on conflict of interests.

• Administrative Order 2.04 (Disciplinary Measures and Procedures) (2017) to conform to the changes resulting from the establishment of the Respectful Workplace Unit (RWU) (Disclosure 406) and the approval of the new staff Code of Conduct.

Compensation for all staff is market-driven, with reference to the appropriate global or local market from which the position is recruited. Starting salaries are determined within salary bands based on various factors such as the level of responsibility, skills, and experience, and are reviewed annually to ensure that they remain competitive. Compensation is linked to individual performance. Staff salaries are approved by Management within the salary budget approved annually by the Board of Directors (BOD).

Members of the Board of Governors are paid by their respective governments.

continued on next page

Table continued

108 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The BOD members (directors and alternates) and the President are paid by ADB. Their remuneration is determined by the Board of Governors, as prescribed by the ADB Charter. The Board of Governors has established a Committee on Remuneration that normally meets every year to review the remuneration of ADB’s BOD based on developments since the last review, and to consider whether sufficient grounds exist to recommend an adjustment in such remuneration. Once every 2 years, the Remuneration Committee also reviews the adequacy of the President’s remuneration. If the Remuneration Committee considers that an adjustment is necessary, it submits a report, together with a draft resolution recommending the adjustment, to the Board or Governors for consideration. The President and the BOD do not see the report of the Remuneration Committee and they do not have any input into the salary proposals, which are sent directly to the Board of Governors. The Remuneration Committee comprises three members of the Board of Governors. Membership of the Remuneration Committee is approved by the Chair of the Board of Governors and takes into account geographical balance.

The base salaries of the BOD (directors and alternates), the President, and vice-presidents are disclosed in the Annual Report. All directors, alternates, and vice-presidents receive the same base salary. Effective from 2016, every director receives $243,942, every alternate receives $208,570 and every vice-president receives $295,841 as a base salary. The President receives a base salary of $459,579 plus a special representation allowance of $38,836. In 2017, the President’s salary was adjusted to $465,554 as base salary plus a special representation allowance of $39,341. There is no linkage between compensation and organizational performance. No bonuses are paid to the directors, alternatives, vice-presidents, or President. Benefits provided to the BOD directors and alternates, the President, and vice-presidents are generally like those of international staff (Disclosure 401-2).

ADB’s supply chain includes staff consultants, contractors, and service providers; refer to Disclosure 102-9 for an understanding of ADB’s supply chain.

The Procurement, Portfolio and Financial Management Department (PPFD) is responsible for staff consultant recruitment in accordance with the policies set out in Disclosure 204 with employing departments or offices responsible for their management.

ADB’s Administrative Order 4.07 on Institutional Procurement and Contract Administration (2016) requires contractors in its institutional supply chain to comply with applicable local and international social standards and requirements that provide for humane work conditions, protection of occupational safety and health, reasonable wages and benefits, respect for diversity, and other core labor standards. The Office of Administrative Services (OAS) is responsible for institutional procurement for headquarters. Field offices are responsible for their own procurement and for following local laws and regulations with contracts are reviewed and approved by the country director.

continued on next page

Table continued

GRI 400—Social Topics 109

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

OAS seeks to ensure that its contractors and service providers observe good social management practices, complying with relevant Philippine labor and social welfare laws and regulations (including minimum wage legislation) and occupational health and safety requirements in accordance with ADB’s Energy, Environment, Health, and Safety Management System (E2HSMS). Contractors and service providers serving ADB headquarters must submit an annual Good Social Management Certificate as part of their contractual obligations within 15 calendar days of the effective date of their contract and must remain valid during the contract duration. If contractors fail to comply, then ADB has the right to deduct from any or all invoices payable to contractors a 30% sum of the invoice value or contract price. Contractors working at the ADB headquarters must ensure that that their employment contracts have been drafted and executed in accordance with Philippine labor legislation and comply with all other relevant employment laws and regulations, including those concerning their employees.

The general conditions of contract for services (2010) enable contract termination due to contractor’s default, any allegation or cause that may constitute grounds for contract termination would be investigated. However, contractors should resolve any disputes with their own personnel. The general conditions of contract for goods (2010) require that suppliers of goods to ADB certify that the goods were not manufactured in violation of local and international labor and occupational safety standards. ADB’s Administrative Order 4.07 on Institutional Procurement and Contract Administration (2016) (section 4.5) explicitly states that contractors’ failure to adhere to the Core Labor Standards of the International Labour Organization (ILO) can be grounds for their exclusion from servicing ADB. 

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201.

Grievances. Settlement of staff grievances about employment are handled by BPMSD with grievances related to contravention of a staff member’s contract of employment or terms of appointment guided by personnel policies set out in the Administrative Orders, which are to be followed by all staff.

continued on next page

Table continued

110 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

If informal resolution cannot be achieved, staff can submit a formal grievance to BPMSD requesting compulsory conciliation with an external conciliator. The external conciliator is one of two independent consultants engaged by ADB to mediate between staff members and Management, and to seek mutually acceptable solutions to grievances arising from administrative decisions before a request for administrative review is submitted. A staff member who is unsatisfied with the outcome of conciliation may request an administrative review of the decision by the director general of BPMSD within 15 days from notice that conciliation has failed. Staff members may appeal the decision of an administrative review or disciplinary measure imposed. The Appeals Committee comprises staff members from headquarters nominated by the President but required to act independently and impartially of Management. Ultimately, grievances may be heard by the independent Administrative Tribunal established by the BOD. The Administrative Tribunal’s decisions are binding on ADB and the staff member. Details of how the ADB Administrative Tribunal operates are available on the ADB website. Decisions of the tribunal are also available. Staff shall not resort to national courts or other tribunals outside ADB to assert or resolve claims against ADB.

Staff members are informed about the formal grievance process during their induction training. Prior to entering a formal grievance process, staff members may choose to consult with the Office of the Ombudsperson to explore informal resolution. Working with the ombudsperson is not required and does not preclude a staff member from availing of the formal resolution system. The ombudsperson is a confidential, neutral conflict resolution resource that is not part of any formal process.

ADB’s Staff Association advocates for its members and works to safeguard their rights, interests, and welfare with respect to their employment, compensation, and benefits as discussed in Disclosure 102-41.

Consultants’ grievances regarding employment practices that contravene a consultant’s terms of contract, harassment, bullying, and other misconduct are dealt with by the employing department or office.

OAS videos shown during the mandatory E2HSMS briefing for all contractors and services providers’ personnel deployed to ADB headquarters deal with norms of conduct and ethical standards and compliance with ADB’s Anticorruption Policy. Some highlights of the videos include a contractors’ and service providers’ compliance with stipulations in its Good Social Management Certificate and prompt reporting to OAS of any complaint regarding the violation of the certificate (from the latter’s personnel or other third parties), such as not remitting social security premiums, paying below-minimum wage salaries, and engaging in illicit relationships that compromise objective evaluation of their performance. OAS has established a Contractor’s Complaints Mechanism Framework. This sets forth the procedures for resolving conflicts and handling complaints, such as unsatisfactory service or performance, fraud, and harassment. The framework provides contractors and service providers an avenue to report any conflicts and complaints to OAS’ management.

continued on next page

Table continued

GRI 400—Social Topics 111

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The Office of the Ombudsperson provides the ADB community with a confidential, neutral, off-the-record, and independent setting to discuss and resolve any work-related concerns and issues as set out in the section on “Workforce Integrity” in the Asian Development Bank Sustainability Report 2018. The ombudsperson must remain neutral and does not serve as an advocate for individual staff members or Management. Staff members are informed about the ombudsperson’s function during their induction training.

Evaluation. ADB’s structured program of Managing for Development Results (Level 4 section of the review, ADB’s Organizational Management) encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). The 2016–2017 Development Effectiveness Review (DEfR) report on employment-related targets, such as

(i) the percentage budgeted international and national staff in operations departments (2016–2017 actual of 56% against an annual target of 55% for 2016 and 56% for 2017);

(ii) the percentage of women in the international staff category (34.0% in 2016 and 35.2% in 2017 against a target of 40.0% by 2022).

The BOD’s Human Resources Committee reviews, monitors, and makes recommendations in its annual reports to the BOD on ADB’s human resources strategy and policies that pertain to staffing, compensation, benefits, and related issues of strategic importance that directly affect ADB’s ability to recruit, develop, and retain the highly qualified staff needed for it to achieve its mandate.

While maintaining staff confidentiality, the ombudsperson alerts Management to trends and concerns about the workplace that should be addressed, providing them with information and feedback on immediate and systemic issues. Thus, the ombudsperson function serves as an early warning system and as a catalyst for transformational change in ADB’s working environment.

Staff perceptions of employment-related issues are also partly measured through the ADB staff engagement survey as discussed in the section on “Engaging the Workforce” in the Asian Development Bank Sustainability Report 2018. The staff engagement survey lists over 100 questions, grouped into 20 different categories such as “Learning” and “Stress/balance/workload”.

continued on next page

Table continued

112 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

401-1 New employee hires and employee turnover

5, 8 Tables 401-1a and 401-1b provide the total number of new staff and hire rates, and the number of departing staff and turnover rates.

Table 401-1a: Rates of New Hires, 2013–2017Item 2013 2014 2015 2016 2017Total Staff Hires (number) 178 202 262 217 279New Hire Rate (%) 5.8 6.8 8.7 7.0 9.0Category           Management 50.0 0.0 28.6 28.6 0.0 International Staff 7.7 6.9 9.7 8.4 13.4 National and Administrative Staff

4.7 6.7 8.1 6.1 6.6

Location (%)          Headquarters           Management 50.0 0.0 28.6 28.6 0.0 International Staff 8.3 7.6 10.2 9.2 14.9 National and Administrative Staff

3.9 6.5 8.5 4.4 5.5

Field Offices           International Staff 3.8 2.3 5.8 3.5 4.5 National and Administrative Staff

6.8 7.3 7.4 10.4 9.2

Gender (%)           Women 5.2 6.4 7.5 6.6 7.6 Men 6.8 7.3 10.4 7.5 10.9Nationality (by region) (%)           Asia and the Pacific 5.3 6.7 8.5 6.5 7.9 Nonregional 9.4 7.2 10.5 10.3 16.2Age (years) (%)           <30 23.6 50.0 46.7 26.2 52.2 30–39.9 8.6 9.6 14.1 13.3 14.3 40–49.9 4.7 4.3 5.3 4.4 6.7 >50 1.7 2.2 3.3 1.6 2.6

Note: Rate of new hires is the number of staff who joined ADB within the year over the number of staff at the start of that year.Source: Budget, Personnel, and Management System Department, Asian Development Bank.

continued on next page

Table continued

GRI 400—Social Topics 113

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 401-1b: Rates of Departures (Including Retirements), 2013–2017

Item 2013 2014 2015 2016 2017

Total Staff Departures 253 181 154 228 247

Departure Rate (%) 8.3 6.1 5.1 7.3 8.0

Category (%)          

Management 33.3 14.3 28.6 28.6 0.0

International Staff 7.7 7.8 7.3 8.5 11.5

National and Administrative Staff

8.5 5.0 3.9 6.6 6.1

Location (%)          

Headquarters          

Management 33.3 14.3 28.6 28.6 0.0

International Staff 7.9 8.2 7.4 8.1 12.0

National and Administrative Staff

10.0 5.5 3.3 6.6 5.4

Field Offices          

International Staff 6.1 5.4 6.6 11.2 8.4

National and Administrative Staff

4.8 4.0 5.1 6.6 7.7

Gender (%)          

Women 9.0 5.4 4.7 6.4 6.1

Men 7.2 7.1 5.8 8.7 10.6

Nationality (by region) (%)          

Asia and the Pacific 8.2 5.7 4.9 6.9 7.1

Nonregional 8.9 8.4 6.6 10.1 13.3

Age (years) (%)          

<30 2.8 3.5 3.3 4.8 7.5

30-39.9 4.2 5.2 3.4 3.9 5.3

40-49.9 2.7 2.6 2.4 3.6 4.9

>50 21.6 12.7 11.5 17.2 16.0

Note: Rate of departure is the number of staff who ended their ADB employment within the year over the number of staff at the start of that year. Movements between staff categories and/or changes in locations that occur during the year are not considered in the ratio.Source: Budget, Personnel, and Management System Department, Asian Development Bank.

There have been no large-scale (defined as those affecting more than 1,000 staff or more than 5% of the total workforce) redundancies during the reporting period.

continued on next page

Table continued

114 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees

8 Benefits provided to all staff members in ADB headquarters and field offices are as follows with all (100%) of ADB employees working full-time.

All staff members receive worldwide medical, life, and disability insurance, except those who opt out of the medical plan for reasons such as preferring their own insurance. Benefits for contingent events include a multipurpose loan facility. Staff may also receive reimbursement for the cost of medical (medical emergency and medical evacuation services) and emergency travel outside the duty station country for the staff member or his/her spouse or recognized domestic partner in the event of death of the staff member’s spouse or domestic partner, child, parent, parent-in-law, or staff member’s sibling (although limited to two siblings for the duration of the staff member’s career). Medical, life, disability, and travel accident insurance are also available to eligible dependents.

All eligible staff members are part of the defined benefit plan providing for lump-sum and/or annuity payments on retirement as discussed in Disclosure 201-3. Staff members who leave service and meet the eligibility conditions are entitled to a basic lifetime pension in the event of normal, early, or incapacity retirement, and to survivor benefits (for eligible dependents or beneficiaries) in the event of the participant’s death. A withdrawal benefit is payable to staff with less than the minimum service requirement, and to those who opt for it in lieu of pension. To augment their basic lifetime pension, staff members appointed before 1 October 2017 may also contribute voluntarily to discretionary benefits that earn a guaranteed rate of return. Staff members appointed since 1 October 2017 automatically are enrolled in the Defined Contribution Plan, which includes an option for voluntary contributions, instead of the option for voluntary contributions into the discretionary benefits.

ADB promotes work–life balance among its staff members. It strives to achieve greater productivity and staff effectiveness through observing 10 regular holidays each calendar year; annual leave (26–30 days, depending on duration of service); maternity leave; paternity leave; adoption leave; sick leave; family leave to care for ill relatives; emergency leave for funerals; occasional absence or nonsecular floating holiday; special leave with or without pay, which is available for study purposes, to work for other international organizations, or other compelling reasons subject to appropriate process and approval (special leave is granted for a maximum of 3 years); flextime (the regular work week consists of 40 hours from Monday to Friday, but staff members have the flexibility to start work from 7:00 a.m. to 9:00 a.m. daily, provided they render 8 hours of work daily and are present during 9:00 a.m. to 3:30 p.m.); provision for work-from-home arrangements; dedicated private space for female staff members to express breastmilk; enhanced discretionary time off for holidays missed and spent at work and for prolonged work periods; increased rest time to address the physical fatigue caused by lengthy business travel; and provision of a corporate-sponsored volunteer day. Staff members pursuing further studies or attending learning programs and training that contribute to their role in ADB are entitled to 10 days of development leave with pay.

continued on next page

Table continued

GRI 400—Social Topics 115

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB has three staff categories: international, national, and administrative. In addition to the benefits listed above, international staff who meet the eligibility criteria may also receive relocation assistance, annual home country travel allowance, dependency allowance, rental allowance, and education assistance. Benefits for BOD directors and alternates, the President, and vice-presidents are generally like those of international staff.

401-3 Parental leave 5, 8 Parental leave benefits are provided to all staff members (1,228 male and 1,804 female in 2016; 1,300 male and 1,834 female in 2017) in ADB headquarters and field offices.

For their first three deliveries, female staff are given a maximum of 12 consecutive calendar weeks paid maternity leave commencing on the delivery date (maternity leave may also start as early as six consecutive calendar weeks before the expected due date at the staff member’s option, or if certified by a doctor); following which staff members have the option to take annual leave or request extended maternity leave of not more than 12 calendar weeks without pay. Adoption leave is also provided for the primary caregiver of an adopted or surrogate child.

Male staff (or female staff if they are not the primary caregiver) are given 5 days parental leave on a maximum of three occasions.

In 2016, 70 female staff took maternity leave (excluding 10 staff whose maternity leave started in 2015 but including 18 staff whose maternity leave in 2016 ended in 2017). The return-to-work rate for female staff was 100%. One female staff resigned within 12 months of return from extended maternity leave in 2017, thus, 69 female staff were still employed 12 months following return to work, making the retention rate 98.6%. In 2016, 43 male staff took parental leave. None resigned after taking parental leave; hence, among male staff the retention rate was 100%. From 1 January 2016, 5 days parental leave was allocated as a separate leave type (it was previously considered a part of family leave).   In 2017, 55 female staff took maternity leave (excluding 18 staff whose maternity leave started in 2016) and 26 male staff took parental leave. No one left ADB within 12 months from returning from maternity or parental leave. Thus, the overall return-to-work and retention rate for male and female staff members was 100%.

continued on next page

Table continued

116 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

403 Occupational Health and Safety, 2016 Edition403 Occupational

health and safety – management approach

Refer to the sections on “Environment and Social Safeguards” and “Safety and Security” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Occupational health and safety is (externally and internally) material to ADB because (i) occupational health and safety issues are associated with infrastructure projects funded by ADB, and (ii) ensuring the health, safety, security, and general well-being of its own staff members is important for maintaining the creativity and productivity of the workforce that is key to ADB providing the support needed and expected by its DMCs.

The management approach for investments covers all of ADB’s operations. For institutional occupational health and safety, it covers headquarters and all field offices. Reporting for subsequent occupational health and safety disclosures only covers ADB headquarters (75% of 3,134 staff as of end of 2017) as data is not available for field offices.

MANAGEMENT APPROACH

The following policies and procedures are applied in considering investments especially in infrastructure, and in managing ADB’s institutional occupational health and safety to protect from harm those employed on ADB-funded projects and working in ADB headquarters. Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments. Key actions of the MTR Action Plan, Appendix 1, include ensuring effective implementation of the Safeguard Policy Statement (SPS).

As a multilateral development bank, ADB’s legal status differs significantly from that of a commercial bank. ADB’s Charter contains provisions that accord to ADB legal status and certain immunities and privileges in the territories of its members. For this reason, ADB is not subject to any occupational health and safety legislation. However, through the E2HSMS for its headquarters, ADB has committed to employ best practices, safe operating procedures, and appropriate technologies to eliminate health and safety risks to ADB personnel and visitors.

continued on next page

Table continued

GRI 400—Social Topics 117

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Safeguard Policies, Principles, and Responsibilities. ADB aims to promote the sustainability of its project outcomes by protecting the environment and people through its environment and social safeguards as discussed in Disclosure 413. For occupational health and safety, ADB’s environment safeguards, as detailed in the SPS, require that borrowers (clients) provide workers with a safe and healthy working environment. SPS refers to the World Bank–IFC Environment, Health and Safety (EHS) Guidelines for preventative and protective measures. The EHS Guidelines include general guidance on occupational health and safety, and sector-specific guidance. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. ADB categorizes all investments according to their environmental impact, including consideration of potential health and safety impacts and risks, as detailed in the SPS. Direct, indirect, cumulative, and induced impacts or risks on occupational health and safety are assessed in environmental impact assessments for category A environment projects; or initial environmental examinations for category B environment projects prior to approval of the project. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

Institutional Policies, Principles, and Responsibilities. ADB has an integrated E2HSMS for operating and maintaining its headquarters, whose health and safety management system complies with the requirements of the international Occupational Health and Safety Assessment Series (OHSAS) 18001 standard for occupational health and safety management systems. In 2017, ADB sustained its certification under the E2HSMS by complying with the OHSAS 18001 requirements. The Health and Safety Committee’s mandate is to “strive to eliminate health and safety risks to ADB staff, business partners, and surrounding communities by using appropriate technologies, by developing disaster response and recovery plans for building operations and facilities, and by being constantly prepared for emergencies.” ADB’s President has overall responsibility for the E2HSMS and for reporting performance to the BOD and Board of Governors. The Management representative from OAS ensures systematic and effective execution of the E2HSMS. Staff members are made aware of occupational health and safety management through their induction training and by intranet articles.

continued on next page

Table continued

118 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB’s staff safety and security are guided by policies set out in the Administrative Orders in conjunction with the policies and guidelines of the United Nations Security Management System. ADB signed a memorandum of understanding pertaining to the Security Management System with the United Nations in 2002. ADB’s Medical Center provides medical kits for staff members who are traveling on official business. OAS has a contract with International SOS to utilize their Travel Tracker system, allowing oversight of all official travel booked through ADB’s in-house travel agents. This allows ADB to quickly locate traveling staff members in the event of an incident. BPMSD also maintains a contract with International SOS for medical and security evacuations. All ADB staff members, including travelers, have 24/7 access to the ADB Incident Coordinator’s contracted security staff. ADB’s safety and security risk management also includes access control, vehicle movement, air safety, closed-circuit television coverage, disaster preparedness, and security force management. Staff members are made aware of safety and security issues during their induction training and by intranet articles. Borrowers (clients) are responsible for the occupational health and safety of ADB staff members visiting project sites and providing them appropriate personnel protective equipment. In case of accident or sickness during mission travel, the following benefits are available to staff members:

(i) access to the ADB Incident Coordinator and the Immediate Response Team;

(ii) ambulance service, both in headquarters and field offices;(iii) evacuation and other emergency services provided by

International SOS;(iv) 100% coverage of medical and hospitalization expenses through

the Group Medical Insurance Plan; and(v) accidental death and disability insurance equal to four times the

staff’s annual salary.

Country directors of field offices are responsible for health and safety management in their field office and for following local laws and regulations. Both the India Resident Mission and Bangladesh Resident Mission have health and safety management systems that comply with the requirements of OHSAS 18001. ADB does not have set safety and security procedures for field offices. Contracted security staff brief staff members being posted to field offices. Briefings cover the general security situation at the duty station, the security responsibilities of the staff, and the minimum operational and residential security standards put in place by the United Nations and that must be complied with.

ADB’s Medical Center provides staff members with information on serious diseases by posting alerts and announcements on the myADB portal (intranet site). Subjects covered include polio, measles, tuberculosis, dengue, skin cancer, and musculoskeletal disorders due to workstation arrangement. Through International SOS, ADB staff members also receive updated medical information.

continued on next page

Table continued

GRI 400—Social Topics 119

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

A 24/7 employee assistance helpline provided for all staff offers professional counselling, resources, referrals, and information including advice on dealing with stress and workplace incidents. BPMSD provides an external counselor to offer counselling support, including for workplace stress, to all ADB staff members, including those in the field offices. Consultations are by appointment, and at the option or convenience of the staff can be face-to face, by phone, through video calls or by e-mail.

ADB’s Administrative Order 3.04 (2016) on Leave provides a staff member’s supervisor the option to “require the staff member to provide a certificate by the licensed doctor or by ADB’s Medical Doctor or medical referee stating fitness to work when a staff member has taken sick leave in excess of 5 consecutive working days, or if the staff member’s presence at work may jeopardize the health and/or safety of others.” The ADB medical referee is retained by ADB to provide, as needed, an independent assessment of documentary medical evidence of illness or injury, required medical examination, or treatment that has been submitted by a staff member.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards as discussed in Disclosure 413.

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016–2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018. No grievances were received in relation to occupational health and safety impacts.

Grievances related to institutional occupational health and safety are handled by BPMSD in relation to staff, OAS in relation to the E2HSMS, and Country Directors in relation to their resident mission.

The Office of the Ombudsperson provides the ADB community with a confidential, neutral, off-the-record, and independent setting to discuss and resolve any work-related concerns and issues as set out in the section on “Workforce Integrity” in the Asian Development Bank Sustainability Report 2018. The ombudsperson must remain neutral and does not serve as an advocate for individual staff members or Management. Staff members are informed about the ombudsperson’s function during their induction training.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). No indicators in the DEfR specifically relate to occupational health and safety.

continued on next page

Table continued

120 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by the Independent Evaluation Department (IED). No IED evaluations specific to health and safety impacts were undertaken in 2016–2017 but IED evaluated ADB’s safeguards as discussed in Disclosure 413 (no recommendations specifically related to health and safety).

In accordance with E2HSMS requirements, occupational health and safety initiatives at the ADB headquarters are evaluated quarterly by the Health and Safety Committee and presented annually to Management. The E2HSMS is both internally and externally audited by a third-party certification body. In 2016, external auditors noted two opportunities for improvement and one positive finding with no major or minor nonconformities. In 2017, no major nonconformities, two minor nonconformities, and two opportunities for improvement were noted.

Safety and security profiles are evaluated through a risk analysis process that is cyclical and ongoing throughout the year. The BOD’s Audit Committee is required to ensure that ADB has established and maintains appropriate, efficient, and consistent procedures for the receipt, retention, and treatment of complaints and anonymous submissions from internal and external complainants (including protection for “whistleblowers”) regarding fraud and corruption, or questionable accounting or auditing matters. The Audit Committee produces an annual report to the Board. The annual reports review progress on the implementation of previous recommendations and provide recommendations for improvement.

The BOD’s Human Resources Committee reviews, monitors, and makes recommendations in its annual reports to the BOD on ADB’s human resources strategy and policies that pertain to staffing.

While maintaining staff confidentiality, the ombudsperson alerts ADB’s Management to trends and concerns about the workplace that require attention, providing information and feedback on immediate and systemic issues, and thus serving as an early warning system and as a catalyst for change in ADB’s working environment.

403-2 Types of injury and rates of injury, occupational diseases,lost days, and absenteeism, and number of work-related fatalities

3, 8 Data regarding occupational health and safety are only available for incidents that occur within ADB headquarters (Table 403-2). Workplace incidents to staff, consultants, contractors or service providers, and visitors that result in injury, ill health, or fatality are recorded as part of E2HSMS in accordance with the Philippine Department of Labor and Employment’s Rule 1050, Notification of Accidents and Occupational Illness. Data for workplace incidents recorded under the E2HSMS include minor injuries that require first aid but no additional medical assistance outside of ADB.

continued on next page

Table continued

GRI 400—Social Topics 121

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 403-2: Number of Recorded Health and Safety Incidents, 2015–2017

Year 2015 2016 2017Number of Incidents 6 4 1 lost time

5 no lost time Source: Office of Administrative Services, Asian Development Bank.

In 2016, four nonmajor (three slips and one cut) work-related incidents (defined as not requiring more than first aid that could negatively impact the well-being of staff) were recorded. In 2017, the safety target was revised to reflect good international industry practice by aiming for zero lost time incidents (defined as an injury with disability where an employee will not be able to report for work for a day or more). One lost time incident and five incidents (of which, four were slips and one was a burn) without lost time were subsequently recorded in 2017.

There were no fatalities in 2016–2017.

The E2HSMS does not capture the number of lost days or absences, the gender of those involved in incidents, or the incidence of occupational disease.

404 Training and Education, 2016 Edition404 Training and

education – management approach

Refer to ADB the sections on “Developing Careers” and “Talent Management” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Training and education are (internally) material to ADB because a highly skilled and motivated workforce is needed to prepare and administer the projects, and disseminate knowledge and information, which are key to ADB providing the support needed and expected by its DMCs.

The management approach for investments covers all of ADB’s operations.

MANAGEMENT APPROACH

The following policies and procedures are applied in providing training and education to ADB’s staff. Supporting the skills and developing the competencies of its staff members places ADB in a better position to fully leverage its diverse workforce to provide the support needed and expected by its DMCs.

Commitment, Goals, and Targets. Refer to Disclosure 401. Key actions set out in the MTR Action Plan (Appendix 1) include aligning and strengthening staff skills to deliver strategic priorities, nurturing and retaining technical talent to build sector expertise, strengthening the leadership skills of staff to assume management roles, and promoting skills sharing across departments and offices.

continued on next page

Table continued

122 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Policies, Principles, and Responsibilities. The Budget, Personnel, and Management System Department (BPMSD) provides advice and services regarding staff development. Training needs are analyzed annually, and staff performance is monitored by supervisors and discussed with individual staff members through yearly performance and development reviews. More frequent discussions regarding career development and matters pertaining to the staff member’s work program (constructed annually and cascaded down from departmental work programs) may also be held.

In line with the Our People Strategy, ADB seeks to recruit highly qualified people, provide a working environment conducive to top performance, and provide advice and training for career development. The latter is achieved through (i) strategic offerings of internal staff development programs (including orientation and induction), which support operational needs and leadership capabilities; and (ii) policies to support external learning and further education via the allocation of staff development funds to headquarters and the field offices to ensure targeted skills development that meets staff needs. ADB’s career development and talent management programs are discussed in the sections on “Developing Careers” and “Talent Management” in the Asian Development Bank Sustainability Report 2018.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. Details of the budget spent on staff development are available in the appendices to the ADB Annual Reports 2016–2017.

Grievances. As discussed in Disclosure 401, settlement of staff grievances about training and employment are handled by BPMSD, with staff members also having the option to consult with the ombudsperson.

Evaluation. Refer to Disclosure 401. No DEfR targets relate specifically to training and education. In addition, ADB regularly reviews the effectiveness of its staff development practices. Training needs are analyzed annually to ascertain the relevance of the management of training and education.

404-1 Average hours of training per year per employee

4, 5, 8 Table 404-1 shows the average hours of training for employees, including participation in in-house programs, external learning events, exams, and other learning opportunities undertaken by staff.

Table 404-1: Average Hours of Training, 2016–20172016 2017

Administrative Staff

National Staff

International Staff

Administrative Staff

National Staff

International Staff

Men 18.75 32.45 23.35 25.95 30.57 24.51Women 20.10 25.52 29.97 24.56 29.19 31.84Total 19.80 28.18 25.60 24.86 29.72 27.05

Source: Budget, Personnel, and Management System Department, Asian Development Bank.

continued on next page

Table continued

GRI 400—Social Topics 123

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

404-2 Programs for upgrading employee skills and transition assistance programs

8 Staff development programs offered to promote lifelong learning include in-house programs on

(i) communication skills;(ii) behavioral skills;(iii) personal impact (e.g., estate planning and settlement, first aid,

personal investment planning);(iv) presentation skills (e.g., media training and presenting in

meetings);(v) problem solving;(vi) communicating in a multicultural environment;(vii) supervisory skills;(viii) managing teams;(ix) conflict management;(x) leadership skills; and(xi) technical learning (e.g., procurement and financial

management).

In-house programs are available to all staff members in headquarters and field offices and logged 8,443 participants in 2016 and 9,848 in 2017. In addition, including staff from headquarters and resident missions, 124 staff members in 2016 and 54 staff members in 2017 participated in ADB-funded external learning events (seminars, training programs, workshops, and online courses) organized by entities that aimed to enhance participants’ specific skills and knowledge. In 2016–2017, 28 and 29 staff, respectively, were on Development Assignments. In 2016, the leadership development program and learning solutions for leadership and managerial development were launched, as discussed in the section on “Developing Careers” in the Asian Development Bank Sustainability Report 2018.

Retirement planning workshops are available to staff as they plan for their future post-ADB.

ADB’s termination policy (including redundancy, reduction in workforce, or redeployment) is formally set out in its Administrative Orders, which state that ADB will observe due process in initiating and deciding on the involuntary or premature termination of staff. Specific reasons and the rationale for selection of a position for elimination or redeployment must be provided to each affected staff member. Determination should not be made based on the work performance or mobility of the occupant of a position. Subject to certain conditions, terminated staff members will be granted a termination payment equal to 1 month’s salary for each year of continuous service up to a maximum of 12 month’s salary. Terminated staff are not offered retraining, severance pay, or counseling.

404-3 Percentage of employees receiving regular performanceand career development reviews

5, 8 All (100%) staff members of both genders and all employee categories receive performance reviews. Managers are also required to conduct midyear reviews of staff performance and staff development needs.

Managerial staff (international staff grade 7 and above) receive annual 360-degree feedback for all including feedback from their supervisors, peers, and direct reports.

continued on next page

Table continued

124 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

405 Diversity and Equal Opportunity 405 Diversity and equal

opportunity – management approach

Refer to the sections on “Gender Equity” and “Diversity and Inclusion” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Diversity and equal opportunities are (externally and internally) material to ADB because (i) ADB supports investment projects that contribute to gender equity and gender can be mainstreamed in other investment projects funded by ADB to help achieve inclusive economic growth; and (ii) a diverse and inclusive workforce makes ADB a more considerate, collegial, and productive workplace, enabling it to provide the support needed and expected by its DMCs.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

The following policies and procedures are applied in managing diversity and equal opportunities so that ADB can improve gender outcomes in its investment projects, and fully leverage its diverse staff to provide the support needed and expected by its DMCs.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments, including those related to gender. Key actions of the MTR Action Plan, Appendix 1, under the poverty reduction and inclusive economic growth priority include addressing gender gaps through, for example, investment in girls’ education, employment, and income-earning opportunities. Refer to Disclosure 401 for ADB’s commitment goals and targets in relation to employment. In organizing to meet new challenges, the MTR notes that ADB will continue to promote diversity and inclusion in its own workforce.

Investment Policies, Procedures, and Responsibilities. ADB’s investment projects in gender are guided by the Gender Equality and Women’s Empowerment Operational Plan, 2013–2020 approved by the President as discussed in the section on “Gender Equity” in the Asian Development Bank Sustainability Report 2018. ADB’s Policy on Gender and Development (2003) approved by the BOD adopts gender mainstreaming as a key strategy for promoting gender equity. ADB’s Operations Manual (section C2) sets out the policy and procedures for operations departments to consider gender at all stages of the project cycle. A detailed gender analysis and preparation of a project gender action plan are required for projects that have the potential to correct gender disparities, could significantly mainstream gender equity concerns, or are likely to have substantial gender impact. Project loan agreements contain the borrowers’ and/or clients’ agreement to comply with the gender action plan. Operations departments are specifically

continued on next page

Table continued

GRI 400—Social Topics 125

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

required to monitor gender concerns and components during project implementation. In the early stages of project preparation, all ADB investment projects are categorized into one of four gender categories: gender equity theme, effective gender mainstreaming, some gender elements, and no gender elements, as defined in the Guidelines for Gender Mainstreaming Categories of ADB Projects. The Gender Thematic Group provides operations departments with technical advice and peer review of projects related to gender. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD.

Employment Policies, Procedures, and Responsibilities. ADB recruits both male and female staff from among its members and has three categories of staff—international, national, and administrative (Disclosure 401). The Administrative Orders state that the recruitment, appointment, and promotion of staff will be made without discrimination based on sex, race, or creed. ADB is committed to a policy of equal employment opportunity for women. It takes affirmative action to increase the representation of women among the international staff at all levels. To further progress gender equality, a 17-point action plan was approved in 2016 to support attraction, recruitment, development and retention of female international staff in ADB, and create a more inclusive work environment for all staff as discussed in the sections on “Diversity and Inclusion” and “Workforce Integrity” in the Asian Development Bank Sustainability Report 2018. In 2016, the RWU (Disclosure 406) was established and, in 2017, a program on Mitigating Unconscious Bias at Work was implemented, in which over 600 staff members, including over 100 managers have participated to date. Measures to support flexible work were strengthened with revisions to work from home policy guidelines and tools, and better communication of the policy to improve uptake.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. Gender specialists are required to have specific competencies in their technical field.

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016–2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018. No complaints in the reporting period related to gender equity. Refer to Disclosure 401 for the grievance procedure in relation to employment.

continued on next page

Table continued

126 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). The 2016–2017 DEfR report on diversity and equal opportunities-related targets, such as

(i) completed operations delivering intended gender equity results (74% in 2014–2016, and 77% in 2014–2017 against a target of 70% by 2020);

(ii) operations supporting gender mainstreaming (48% in 2014–2016 and 2015–2017 against a target of 50% by 2020); and

(iii) the percentage of women in the international staff category (34.0% in 2016 and 35.2% in 2017 against a target of 40.0% by 2022).

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. In 2017, a Thematic Evaluation on ADB Support for Gender and Development was completed as discussed in the section on “Gender Equity” in the Asian Development Bank Sustainability Report 2018.

The evaluation synthesis on Lessons from Country Partnership Evaluation: A Retrospective concluded that gender equality needs to be prominent in country partnership strategies (CPSs) and ADB must (i) focus on strong gender action plans based on informed diagnostic analysis, and specific indicators and targets; and (ii) follow up on gender actions during implementation. Government capacity for mainstreaming gender in projects needs strong support. At the same time, ADB can benefit from close collaboration with civil society organizations and nongovernment organizations and integrate them in its work.

Refer to Disclosure 401 for evaluation in relation to employment.

continued on next page

Table continued

GRI 400—Social Topics 127

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

405-1 Diversity of governance bodies and employees

5, 8 Tables 405-1a and 405-1b provide the profile of the Board of Governors and BOD at the end of 2016–2017. ADB does not monitor the governing bodies’ composition or staff members (who come from the member countries) by minority group. ADB does not have data on the age of members of the Board of Governors, who are employed by and reside in their member countries.

Table 405-1a: Profile of the ADB Board of Governors, 2016–2017

2016 2017Gender Number % Number %Men 113 84.3 109 81.3Women 19 14.2 23 17.2Vacant 2 1.5 2 1.5Total 134 100.0 134 100.0

Source: Office of the Secretary, Asian Development Bank.

Table 405-1b: Profile of the ADB Board of Directors, 2016–20172016 2017

Gender Number % Number % Men 20 83.3 22 91.7 Women 3 12.5 0 0.0 Vacant 1 4.2 2 8.3Total 24 100.0 24 100.0Age (years) <30 0 0 0 0 30-39.9 2 8.3 3 12.5 40-49.9 8 33.3 7 29.1 50+ 13 54.2 13 54.2 Vacant 1 4.2 1 4.2Total 24 100.0 24 100.0

Source: Office of the Secretary, Asian Development Bank.

Table 405-1c provides the profile of ADB staff in 2013–2017 while Tables 405-1d and 405-1e provide the profile of the staff by gender and age broken down by employment category at the end of 2016–2017.

continued on next page

Table continued

128 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 405-1c: Profile of ADB Staff, 2013–2017 (%)

2013 2014 2015 2016 2017Category Management 0.2 0.2 0.2 0.2 0.2 International Staff 36.4 35.8 35.6 35.7 36.2 National and Administrative Staff

63.4 63.9 64.2 64.1 63.5

LocationHeadquarters  Management 0.2 0.2 0.2 0.2 0.2 International Staff 32.0 31.3 31.0 30.7 30.6 National and Administrative

Staff44.9 45.0 45.6 44.7 44.1

Field Offices International Staff 4.4 4.6 4.6 5.0 5.6 National and Administrative

Staff18.5 18.9 18.6 19.4 19.4

Gender Women 58.2 58.4 58.0 58.3 58.5 Men 41.8 41.6 42.0 41.7 41.5Employment Contract Regular 75.6 79.2 79.0 76.7 76.5 Fixed Term 24.4 20.8 21.0 23.3 23.5Nationality (by region) Asia and the Pacific 86.0 86.3 86.2 86.2 85.8 Nonregional 14.0 13.7 13.8 13.8 14.2Age (years)

<30 2.9 3.0 2.7 2.2 2.130–39.9 32.5 31.0 31.0 31.5 30.840–49.9 38.6 39.5 39.6 40.3 41.450+ 25.9 26.5 26.8 26.1 25.8

Service (years)<2.9 23.3 19.5 19.3 20.5 22.03–5.9 23.1 23.8 22.9 18.3 15.46–10.9 22.6 25.2 25.8 28.6 29.811–15.9 14.6 15.2 16.3 17.2 16.516+ 16.4 16.2 15.8 15.4 16.2

ADB Members Represented 61 60 59 60 60Source: Budget, Personnel, and Management System Department, Asian Development Bank.

continued on next page

Table continued

GRI 400—Social Topics 129

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Table 405-1d: Profile of Staff by Employment Category and Gender, 2016–2017

(number and %)National and Administrative Staff

International Staff Management

Gender 2016 2017 2016 2017 2016 2017

Women 1,427 (72%)

1,432 (72%)

375 (34%) 400 (35%) 2 (29%) 2 (29%)

Men 555 (28%) 559 (28%) 728 (66%) 736 (65%) 5 (71%) 5 (71%)

Total 1,982 (100%)

1,991 (100%)

1,103 (100%)

1,136 (100%)

7 (100%)

7 (100%)

Source: Budget, Personnel, and Management System Department, Asian Development Bank.

Table 405-1e: Profile of Staff by Employment Category and Age, 2016–2017

(number and %)National and

Administrative Staff International Staff ManagementAge 2016 2017 2016 2017 2016 2017

<30 64 (3%) 51 (3%) 3 (0%) 14 (1%) 0 (0%) 0 (0%)

30–39.9 788 (40%) 766 (38%) 185 (17%) 198 (17%) 0 (0%) 0 (0%)

40–49.9 767 (39%) 808 (41%) 479 (43%) 489 (43%) 0 (0%) 0 (0%)

50+ 363 (18%) 366 (18%) 436 (40%) 435 (38%) 7 (100%) 7 (100%)

Total 1,982 (100%)

1,991 (100%)

1,103 (100%)

1,136 (100%)

7 (100%)

7 (100%)

Source: Budget, Personnel, and Management System Department, Asian Development Bank.

406 Nondiscrimination, 2016 Edition 406 Nondiscrimination –

management approach

Refer to the sections on “Diversity and Inclusion” and “Workforce Integrity” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Consideration of nondiscrimination is (internally and externally) material to ADB because (i) ADB supports investment projects that contribute to inclusive economic growth, but disadvantaged and vulnerable groups may be differentially or disproportionately affected by the adverse impacts of ADB projects; and (ii) nondiscrimination in the workforce makes ADB a more considerate, collegial, and productive workplace, enabling it to provide the support needed and expected by its DMCs

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

The following policies and procedures are applied in managing nondiscrimination so that ADB can avoid disadvantaged and vulnerable groups being differentially or disproportionately affected, and fully leverage its diverse staff to provide the support needed and expected by its DMCs.

continued on next page

Table continued

130 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments, including those related to gender. Key actions of the MTR, Appendix 1, include ensuring effective implementation of the SPS. Refer to Disclosure 401 for ADB’s commitment goals and targets in relation to employment. In organizing to meet new challenges, the MTR notes that ADB will continue to promote diversity and inclusion in its own workforce.

Safeguard Policies, Procedures, and Responsibilities. ADB aims to promote the sustainability of its project outcomes by protecting the environment and people through its environment and social safeguards as discussed in Disclosure 413. Borrowers (clients) are required by the Safeguard Policy Statement (SPS) to examine whether individuals or groups may be differentially or disproportionally affected because of their disadvantaged status e.g. women or indigenous peoples. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD.

Employment Policies, Procedures, and Responsibilities. ADB recruits both male and female staff from among its members and has three categories of staff—international, national, and administrative (Disclosure 401). The Administrative Orders state that the recruitment, appointment, and promotion of staff will be made without discrimination based on sex, race, or creed. ADB is committed to a policy of equal employment opportunity for women. It takes affirmative action to increase the representation of women among the international staff at all levels (Disclosure 405).

The Administrative Orders also clearly state that ADB will not tolerate any action by any staff member that constitutes harassment (including based on sex, age, race, or creed). All ADB staff, particularly those with managerial or supervisory responsibilities, must take prompt action to deal with any incident of harassment. Any form of harassment is detrimental to staff morale and productivity and to the interests of ADB. ADB will ensure that complaints regarding harassment are taken seriously and handled impartially; that action is taken promptly to ensure the harassment stops; and that staff making complaints and those acting as witnesses are not retaliated against.

In 2016, the RWU was established to ensure a respectful environment within ADB. The RWU regularly provides advice and guidance on issues related to professional conduct and respect at work. It reinforces and promotes a clear understanding among Management and staff of the staff rules and regulations, procedures, and practices, clarifying the ethical standards that ADB requires its Management and staff to adhere to.

The general conditions of contract for contractors providing services to ADB require that they too shall not unlawfully discriminate against ADB personnel either directly or indirectly based on race, color, ethnic or national origin, disability, sex or sexual orientation, religion or belief, or age (Disclosure 401). Consultants’ contracts also define the consultant’s responsibility to observe the highest ethical standards.

continued on next page

Table continued

GRI 400—Social Topics 131

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of the end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards, as discussed in Disclosure 413.

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016–2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018.

Refer to Disclosure 401 for the grievance procedure in relation to employment. In addition, staff can submit advisories and complaints related to harassment, bullying, and other misconduct (including discrimination) by other staff to the RWU for investigation. Following investigation, the RWU will determine to close the complaint or to initiate formal disciplinary procedures in accordance with the Administrative Orders. Any staff on whom disciplinary action has been taken may file an appeal on the decision to the Appeals Committee (Disclosure 401). The Appeals Committee shall determine whether the finding of misconduct was proper and whether the measure of discipline was proportionate to the misconduct.

Evaluation. Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. No IED evaluations specific to nondiscrimination were undertaken in 2016–2017 but IED evaluated ADB’s safeguards as discussed in Disclosure 413.

Refer to Disclosure 401 for evaluation in relation to employment. The RWU reports directly to the President and monitors and assesses the effectiveness of existing policies and systems for enforcing accountability and mitigating risks in professional conduct, and for promoting integrity and respect at work. Based on its monitoring and assessment activities, RWU identifies gaps and proposes improvements as needed.

406-1 Incidents of discrimination and corrective actions taken

5, 8, 16 No grievances relating to discrimination in relation to ADB’s investments were filed with the Accountability Mechanism during 2016–2017.

In 2017, the RWU provided 47 advisories and received 20 complaints related to harassment, bullying, and other misconduct.

For cases decided by the Administrative Tribunal (decisions are available on the ADB website) during in 2016–2017, no instances of discrimination were found.

continued on next page

Table continued

132 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

407 Freedom of Association and Collective Bargaining, 2016 Edition407 Freedom of

association and collective bargaining – management approach

Refer to the section on “Social Development” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Freedom of association and collective bargaining are (externally) material to ADB because ADB supports investment projects that contribute to inclusive economic growth, and workers’ right to freedom of association and collective bargaining should be supported.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

In promoting good labor relations, ADB is guided by the internationally recognized core labor standards, and most of ADB’s DMCs as members of the International Labour Organization (ILO), are held to respect these standards. The following policies and procedures are applied in considering the application of the ILO Core Labor Standards (including freedom of association and collective bargaining) to ADB investments to promote an atmosphere that is conducive to their achievement.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments, including those related to social development. ADB has a memorandum of understanding with the ILO to address issues that concern workers and labor markets in its DMCs.

Investment Policies, Procedures, and Responsibilities. ADB’s Social Protection Strategy (2001) states that, when designing and formulating its investment projects, ADB will comply with the core labor standards and take all necessary and appropriate steps to ensure that, for ADB-financed procurement of goods and services, contractors, subcontractors, and consultants will comply with the country’s labor legislation (e.g., minimum wages, safe working conditions, and social security contributions) as well as with the core labor standards. ADB works with its DMCs to ensure that the Core Labor Standards are adhered to as usually stated in the DMCs labor laws and their signatories to the ILO’s labor standards.

continued on next page

Table continued

GRI 400—Social Topics 133

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

ADB analyzes application of the Core Labor Standards in developing CPSs. This often requires a subtler approach than with child and forced labor. Freedom of association and collective bargaining are contentious issues for many DMCs and employers’ organizations. In seeking the requisite data, it is essential that ADB promote the positive aspects of freedom of association and collective bargaining (which include economic and social development linked to poverty reduction) in the spirit of social dialogue. Insofar as the DMC in question considers that there is a political dimension to recognition of these rights, then ADB ensures that it does not promote any actions that are contrary to the core labor standards.

The Operations Manual (section C3) provides procedures for integrating social dimensions into programs and projects. Operations departments conduct an initial poverty and social assessment (IPSA) for all programs and projects, to identify the expected poverty and social impacts of the intervention and key social issues (including labor issues) that need to be addressed during implementation. Based on the issues identified, social analysis should be carried out in a participatory manner to identify and formulate design measures and implementation arrangements to maximize the social benefits and avoid or minimize the social risks of the project, and to do so in a participatory manner. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD.

ADB’s Core Labor Standards Handbook states that “loan agreements for ADB projects involving works contain assurances that the contractors will comply with the borrowing country’s labor laws and related international treaty obligations, will not employ child or forced labor, will provide men and women equal wages for equal work, and will apply other provisions as appropriate.” Thus, where necessary, loan agreements carry requirements for borrowers (clients) to implement social obligations, including compliance with the core labor standards. For example, during the predesign phase of a project, if one or more national or core labor standards may be an issue, stand-alone projects may be designed to address the issue. Further guidance is provided in the Handbook on Poverty and Social Analysis and Labor Issues in Public Enterprise Restructuring.

ADB makes use of the Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer, Multilateral Development Bank Harmonized Edition 2010, prepared by the Fédération Internationale des Ingénieurs-Conseil (FIDIC) (Disclosure 204). These include measures to ensure contractors comply with the Core Labor Standards including the avoidance of child and forced labor, and that workers are ensured of their right to freedom of association and collective bargaining.  In DMCs where relevant labor laws recognize worker’s rights to form and join workers organizations of their choosing, freedom of association and collective bargaining are to be respected and employers shall not discriminate or retaliate against contractor’s personnel who participate, or seek to participate in, such organizations and bargain collectively. 

continued on next page

Table continued

134 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

In addition, ADB carries out active dialogue with international trade unions (such as the International Confederation of Free Trade Unions and the ILO. Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. Social development specialists are required to have specific competencies in their technical field.

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016–2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018. No complaints during the reporting period related to core labor standards.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). No indicators in the DEfR specifically relate to core labor standards.

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. No IED evaluations specific to core labor standards were undertaken in 2016-2017.

407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

8 ADB has operations in 40 DMCs in the Asia and Pacific region, including those in which freedom of association and collective bargaining may be at risk. Therefore, compliance with Core Labor Standards was appropriately addressed for all (100%) projects in 2016–2017 through the IPSAs, summary poverty reduction and social strategies (SPRSSs), and loan agreements. For example, loan agreements may include a covenant stating that core labor standards and national labor laws and regulations are to be complied with by the borrower (client) during project implementation and/or that bidding documents and contracts are to require the contractor to also comply with these requirements. Copies of loan agreements for sovereign projects are available on the ADB website.

continued on next page

Table continued

GRI 400—Social Topics 135

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

408–409 Child Labor and Forced or Compulsory Labor, 2016 Edition408–409 Child labor

and forced or compulsory labor – management approach

Refer to the sections on “Social Development” and “Environment and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Child Labor and Forced or Compulsory Labor are (externally) material to ADB because ADB supports investment projects that contribute to inclusive economic growth, but because ADB has operations in 40 DMCs in the Asia and Pacific region, there is a risk that child and forced or compulsory labor could be utilized in the investment projects it supports.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

When it comes to child labor and forced or compulsory labor such as trafficking in persons, imprisonment in sweatshops, and the slavery-like conditions on some plantations and even in private homes, abuse is known to occur in the Asia and Pacific region including several DMCs in which ADB has operations. Its eradication per se has become a priority concern for international cooperation by the organizations in the United Nations system and international agencies, such as ADB, concerned with economic and social development or with the promotion and protection of human rights. In promoting good labor relations, ADB is guided by the internationally recognized core labor standards, and most of ADB’s DMCs as members of the ILO, are held to respect these standards. The following policies and procedures are applied in considering the application of the ILO Core Labor Standards (including child and forced labor) to ADB investments to promote an atmosphere that is conducive to their achievement.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments, including those related to social development. ADB has a memorandum of understanding with the ILO to address issues that concern workers and labor markets in its DMCs.

Policies, Procedures, and Responsibilities. In accordance with the policies and procedures set out in Disclosure 407, ADB assesses which groups of the population, by gender, age, and ethnic origin, are most at risk of child or forced or compulsory labor.

The higher vulnerability of children to forced or compulsory labor is well known. There is reason to believe that women and men differ in their risks of new and differing forms of coercion. There is also evidence that indigenous peoples and other racial or ethnic minorities are especially vulnerable. Furthermore, there are indications that forced and compulsory labor can easily affect migrant workers, especially if they fall into a trafficking situation. ADB analyzes application of the Core Labor Standards in developing CPSs, programs, and projects.

continued on next page

Table continued

136 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

In addition, SPS (Appendix 5) prohibits investment in production or activities involving harmful or exploitative forms of forced labor or child labor. Management considers the results of safeguards due diligence in approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

Resources. Refer to Disclosure 407.

Grievances. Refer to Disclosure 407 (no complaints related to core labor standards).

Evaluation. Refer to Disclosure 407.

408-1 and 409-1

Operations and suppliers at significant risk for incidents of child labor and forced or compulsory labor

8, 16 ADB has operations in 40 DMCs in the Asia and Pacific region, including those in which child labor and forced labor may be a risk.

In addition, projects involving agriculture or manufacturing pose a risk of child or forced labor, and infrastructure construction poses the risk to exposing young workers to hazardous work. Therefore, compliance with Core Labor Standards was appropriately addressed for all (100%) projects in 2016–2017 through the IPSAs, SPRSSs, and loan agreements. For example, loan agreements may include a covenant stating that core labor standards and national labor laws and regulations are to be complied with by the borrower (client) during project implementation and/or that bidding documents and contracts are to require the contractor to also comply with these requirements. Copies of loan agreements for sovereign projects are available on the ADB website.

In the past there have been concerns raised regarding the application of the Core Labor Standards in agricultural projects in Uzbekistan. Although the ADB projects finance irrigation infrastructure, and the use of child or forced labor in these projects is prohibited, ADB recognizes the risks and continues to stay abreast of the issue in coordination with the ILO. The ILO has been monitoring the cotton harvest for child labor since 2013 and in 2017 began monitoring the harvest for forced labor and child labor as part of an agreement with the World Bank who also invest in similar agricultural projects in Uzbekistan. A World Bank–ILO Third-Party Monitoring Project is focused on the remaining challenges, particularly the need for further raising awareness and capacity building, which varies between provinces and districts. It will ensure that all those involved in recruitment will have the information and tools needed to ensure that cotton pickers are engaged in conformity with international labor standards.  

continued on next page

Table continued

GRI 400—Social Topics 137

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

411 Rights of Indigenous Peoples, 2016 Edition411 Rights of

indigenous peoples – management approach

Refer to the section on “Environment and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Indigenous rights are (externally) material to ADB because it supports investment projects that contribute to inclusive economic growth, but indigenous peoples could be adversely impacted by such projects, particularly infrastructure projects during construction and operation.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

The following policies and procedures are applied in managing indigenous rights so that ADB can avoid, minimize, mitigate, and/or compensate adverse impacts on indigenous peoples.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments, including those related to social development. Key actions of the MTR Action Plan, Appendix 1, include ensuring effective implementation of the SPS.

Safeguard Policies, Procedures, and Responsibilities. ADB’s Operations Manual (section C3), the Incorporation of Social Dimensions into ADB Operations, requires that an IPSA is conducted and disclosed on the ADB website for all investment projects to identify the expected poverty and social impacts of the intervention and identify key social issues (including pertaining to indigenous peoples) that need to be addressed during project implementation. Based on the issues identified, social analysis should be carried out in a participatory manner to identify and formulate design measures and implementation arrangements to maximize the social benefits and avoid or minimize the social risks of the project, and to do so in a participatory manner. During the formation of CPS and throughout ADB’s project cycle, from preparation through evaluation, risks to indigenous peoples attendant to each investment project are considered and discussed with borrowers (clients), who must comply with the SPS requirements.

ADB aims to promote the sustainability of its project outcomes by protecting the environment and people through its environment and social safeguards as discussed in Disclosure 413. Many aspects of the indigenous peoples safeguards principles and requirements are consistent with international standards for ensuring full respect for indigenous peoples’ identity, dignity, human rights, livelihood systems, and cultural uniqueness as defined by indigenous peoples themselves. ADB’s SPS specifically recognizes that indigenous peoples are closely tied to land, forests, water, wildlife, and other natural resources, and special considerations need to be applied in projects that affect such ties. The requirements for seeking the consent of affected indigenous

continued on next page

Table continued

138 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

peoples’ communities apply when specific project activities affect indigenous peoples’ customary and traditional lands, and cultural and natural resources within such lands. SPS requirements safeguard indigenous peoples’ rights to maintain, sustain, and preserve their cultural identities, practices, and habitats, and ensure that projects affecting them will take the necessary measures to protect these rights.

ADB’s SPS requires the conduct of “meaningful consultations” with affected indigenous peoples’ communities at every stage of the project. The provision and procedural requirements for meaningful consultation are detailed in the SPS Appendix 3. “Meaningful consultation” is defined as a process that

(i) begins early in the project preparation stage and is carried out on an ongoing basis throughout the project cycle;

(ii) provides timely disclosure of relevant and adequate information that is understandable and readily accessible to affected people;

(iii) is undertaken in an atmosphere free of intimidation or coercion; (iv) is gender inclusive and responsive, and tailored to the needs of

disadvantaged and vulnerable groups; and (v) enables the incorporation of all relevant views of affected people

and other stakeholders into decision making, such as during project design, for mitigation measures, for sharing development benefits and opportunities, and pertaining to implementation issues.

Consultation will be carried out in a manner commensurate with the impacts on affected communities. The consultation process and its results will be documented and reflected in the indigenous peoples’ plan. This plan will be prepared by the borrower (client) and will include the proposed mitigation measures, monitoring and reporting requirements, etc.

The SPS specifically stipulates that, in certain project circumstances, indigenous peoples may be particularly vulnerable, and their consent to the project must be ascertained (paragraph 55). SPS further elaborates that the consent of affected indigenous peoples’ communities must be ascertained for the following project activities (i) commercial development of the cultural resources and knowledge of indigenous peoples; (ii) physical displacement from traditional or customary lands; and (iii) commercial development of natural resources within customary lands under use that would impact the livelihoods or the cultural, ceremonial, or spiritual uses that define the identity and community of indigenous peoples. For the purposes of policy application, the consent of affected indigenous peoples’ communities refers to a collective expression by the affected indigenous peoples’ communities, through individuals and/or their recognized representatives, of broad community support for such project activities. Broad community support may exist even if some individuals or groups object to the project activities. Where broad community support has been ascertained, the borrower (client) will provide documentation that details the process and outcomes of consultations with indigenous peoples and indigenous peoples’ organizations, including

(i) the findings of the social impact assessment; (ii) the process of meaningful consultation with the affected

indigenous peoples’ communities;

continued on next page

Table continued

GRI 400—Social Topics 139

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

(iii) the additional measures, including project design modification, that may be required to address adverse impacts on the indigenous peoples and to provide them with culturally appropriate project benefits;

(iv) the recommendations for meaningful consultation with and participation by indigenous peoples’ communities during project implementation, monitoring, and evaluation; and

(v) the content of any formal agreements reached with indigenous peoples’ communities and/or indigenous peoples’ organizations.

The borrower (client) will submit documentation of the engagement process to ADB for review and for ADB’s own investigation to assure itself of broad community support for the project activities. ADB will not finance an investment project without such support.

The Operations Manual (section F1) sets out the policy and procedures to be followed by operations departments in undertaking due diligence for indigenous peoples safeguards. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of end 2017, ADB had 117 staff positions dedicated to environment and social safeguards. This represents an 80% increase from the 65 positions in 2009 when the BOD approved SPS.

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016-2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018 (Disclosure 411-1).

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosure 201). No indicators in the DEfR specifically relate to indigenous peoples.

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. IED evaluated ADB’s safeguards as discussed in Disclosure 413 (no recommendations specifically related to indigenous peoples).

continued on next page

Table continued

140 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

411-1 Incidents of violations involving rights of indigenous peoples

2 Two grievances about indigenous peoples were filed with the Office of the Compliance Review Panel of the Accountability Mechanism during the reporting period: in 2016, for the Promoting Economic Use of Customary Land, and Samoa Agribusiness Support Project in Samoa; and in 2017, for the proposed Nenskra Hydropower Project in Georgia.

In the Samoa case, the complainants consider themselves indigenous peoples and allege that proposed revisions to their land law will take away their ownership of customary land. The complaint was considered eligible, but the Board adopted its Compliance Review Committee’s view that a compliance review should not proceed at that time as the Government of Samoa was proposing legislative changes that would substantially remove likely material harm to the complainants.

Complainants in the Georgia case belong to the Svan people and consider themselves as indigenous peoples. They claim that the proposed hydropower project will negatively impact their physical and sociocultural environment, including their livelihoods. As the project was proposed but not approved, the BOD did not authorize a compliance review but upheld the Board Compliance Review Committee’s recommendation for Management to consider findings of the Compliance Review Panel as set out in the Eligibility Report, among which is a reconsideration of the impacts on the Svam people.

412 Human Rights Assessment, 2016 Edition 412 Human rights

assessment - management approach

Refer to the sections on “Gender Equity”, “Social Development” and “Environment and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Human rights are (externally) material to ADB because ADB supports investment projects that contribute to inclusive economic growth, and human rights should be supported.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

While ADB does not have a policy on human rights per se, the following policies and procedures (including safeguards) that are related to elements that comprise human rights are applied in considering ADB investments to avoid, minimize, mitigate, or compensate for adverse impacts on affected persons.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals and targets in relation to investments, including those related to gender and social development. Key actions of the MTR Action Plan, Appendix 1, include ensuring effective implementation of the SPS.

continued on next page

Table continued

GRI 400—Social Topics 141

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Investment Policies, Procedures, and Responsibilities. Refer to Disclosures 405, 406, 407 and 408/409. ADB’s Operations Manual does not have a specific section on human rights and ADB does not conduct human rights reviews or assessments as such. However, section C3 of the Operations Manual provides procedures for integrating social dimensions into programs and projects. Operations departments conduct an IPSA for all programs and projects, to identify the expected poverty and social impacts of the intervention and key social issues (such as participation, gender, involuntary resettlement, indigenous peoples, labor, affordability, and other risks and/or vulnerabilities) that need to be addressed during implementation. Based on the issues identified, social analysis should be carried out to identify and formulate design measures and implementation arrangements to maximize the social benefits and avoid or minimize the social risks of the project, and to do so in a participatory manner.

Safeguard Policies, Procedures, and Responsibilities. ADB’s SPS aims to promote the sustainability of project outcomes by protecting the environment and people, by applying safeguard requirements—including for impacts on livelihoods through impacts on environmental media, involuntary resettlement, and indigenous peoples as discussed in Disclosure 413. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental and social safeguards. Management considers the results of safeguards due diligence in approving an investment project for submission to the BOD.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards.

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016–2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018. While the Accountability Mechanism does not specifically deal with complaints on human rights per se, it entertains complaints on ADB’s operational policies and procedures such as SPS; the PCP; Operations Manual C2 on Gender and Development in ADB Operations; Operations Manual C3 on Incorporation of Social Dimensions into ADB Operations; and Operations Manual C4 on Governance, which may relate to human rights. The Accountability Mechanism is generally consistent with the United Nation’s Guiding Principles on Business and Human Rights and ADB implements these principles within the bounds of the Accountability Mechanism Policy 2012, and in consistency with ADB’s mandate, as defined in the ADB Charter.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the processes and tools to evaluate the effectiveness of the management approach (Disclosure 201). No indicators in the DEfR specifically relate to human rights.

continued on next page

Table continued

142 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. Project completion reports produced by ADB’s operations departments include an evaluation of the implementation of safeguards plans and the degree of compliance with safeguard-related covenants and lessons learned.

412-2 Employee training on human rights policies or procedures

Table 412-2 sets out staff participation in human rights-related trainings related to investments and the workplace. In 2016, 654 staff participated in 114 hours of trainings. In 2017, 919 staff participated in 93 hours of trainings. Staff may have participated in more than one course during the year.

Table 412-2: Human Rights-Related Trainings2016 2017

Program Title

Duration of

Session (hours

and number

of sessions)

No. ofParticipants

% of Total Staff

(3,092)

Duration of

Session (hours

and number

of sessions)

No. ofParticipants

% of Total Staff

(3,134)Prevention of Harassment Briefing (e-learning)

1 (n/a) 248 8.02 1 (n/a) 242 7.72

Staff Conduct (e-learning)

1 (n/a) 233 7.56 1 (n/a) 279 8.90

Poverty, Gender, and Social Analysisfor ADB Projects

7 (1) 36 1.16 7 (1) 25 0.80

Environment and Social Safeguards in ADB Operations (Introductory Course)

7 (1) 32 0.97 7 (3) 105 3.35

Environment Safeguard Requirements

14 (1) 27 0.89 14 (2) 66 2.11

Social Safeguards in Projects

14 (1) 16 0.53 14 (2) 64 2.04

Environment Safeguards e-Learning

7 (n/a) 62 2.04 7 (n/a) 138 4.40

n/a = not applicable.Source: Asian Development Bank.

continued on next page

Table continued

GRI 400—Social Topics 143

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

412-3 Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

All 140 (in 2016) and 121 (in 2017) (100%) investment commitments were assessed through an IPSA and screened and categorized for environment, involuntary resettlement and indigenous peoples safeguards, as discussed in the sections on “Social Development” and “Environmental and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.

Projects are categorized as A, B, C, or FI and separately for environment, involuntary resettlement, and indigenous people’s impacts. Environment category A indicates significant irreversible, diverse, or unprecedented adverse impacts; category B indicates less adverse impacts; and category C indicates minimal or no impacts. For involuntary resettlement and indigenous peoples, category A indicates significant adverse impacts; category B indicates less adverse impacts; and category C indicates no impacts. Category FI is for projects that utilize the financial intermediary modality.

Core Labor Standards compliance is appropriately addressed for all projects through the IPSA, SPRSS, and/or loan agreements.

All loan agreements for categories A and B environment projects include environment safeguard specific provisions to implement their environment management plans and/or environment assessment and review frameworks; and/or provisions to specifically exclude subprojects that will entail more than minimal environmental impact.

All loan agreements for categories A and B involuntary resettlement projects include involuntary resettlement specific provisions to implement their respective resettlement plans and/or frameworks, and/or provisions to specifically exclude subprojects that will entail involuntary resettlement. All categories A and B indigenous peoples projects include indigenous peoples-specific provisions to implement their respective indigenous peoples plans and/or frameworks, and/or provisions to specifically exclude subprojects that will entail impacts on indigenous peoples. In 2016–2017, there were 23 (9%) approved projects that were category A for environment, 32 (12%) that were category A for involuntary resettlement, and 1 (0.4%) that was category A for indigenous peoples.

continued on next page

Table continued

144 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

413 Local Communities, 2016 Edition413 Local communities –

management approach

MATERIALITY AND BOUNDARY

Impacts on local communities are (externally) material to ADB because (i) ADB invests in projects to help its DMCs reduce poverty among their populations and improve their living conditions and quality of life; and (ii) adverse impacts on local communities, including involuntary resettlement, are associated with infrastructure projects that are funded by ADB.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

Projects can have unintended adverse effects on affected people if potential environmental and social impacts and risks are not dealt with. Such impacts can occur during the process of involuntary resettlement, especially when measures to avoid or mitigate risks are not well designed or not properly implemented. Other examples include adverse impacts on indigenous peoples, impacts on the physical or biological environment that in turn may affect livelihoods; harm to project works because labor standards were not appropriately applied during project implementation; and community health and safety issues, such as increases in the incidence of HIV/AIDS or sexually transmitted infections. If well executed, projects can lead to net benefits; for instance, they can improve the livelihoods of affected people or improve the environment. The following policies and procedures are applied in approving investments (especially in infrastructure) to deliver inclusive economic growth; pursue environmentally sustainable growth and regional integration; and avoid, minimize, mitigate, and/or compensate for adverse impacts on local communities.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals, and targets in relation to investments supporting inclusive economic growth, environmentally sustainable growth, and regional integration. Key actions of the MTR Action Plan, Appendix 1, include ensuring effective implementation of the SPS.

continued on next page

Table continued

GRI 400—Social Topics 145

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Social and Environment Policies, Procedures, and Responsibilities. ADB supports investments, including those related to climate change and disaster risk management; education; environment; finance; gender; governance; health; social development; and infrastructure (agriculture and food security, energy, transport, information and communication technology, urban development, and water) to help its DMCs reduce poverty among their populations and improve their living conditions and quality of life, in line with the sector and thematic policies and plans detailed in the section on “Ensuring Inclusive, Environmentally Sustainable Operations” in the Asian Development Bank Sustainability Report 2018. In relation to impacts on local communities, the following policies, strategies and plans to note are as follows:

Social

(i) Social Protection Strategy (2001, approved by the BOD)—Spells out the scope of ADB’s commitment to develop priority interventions in supporting social assistance and welfare service programs.

(ii) Social Protection Operational Plan 2014–2020 (approved by the President)—Provides strategic directions for ADB’s support to strengthen social protection systems.

(iii) Policy on Gender and Development (1998, approved by the BOD)—Adopts gender mainstreaming as a key strategy for promoting gender equity.

(iv) Gender Equality and Women’s Empowerment Operational Plan, 2013–2020 (approved by the President)—Sets out the strategic directions and guiding framework for advancing gender equality agenda and outcomes by 2020.

(v) Operational Plan for Enhancing ADB’s Effectiveness in Fragile and Conflict-Affected Situations (2013, approved by the President)—Provides details on actions that ADB will take to improve the development impact of its support to such DMCs.

ADB’s Operations Manual (section C, as approved by the President) brings together ADB’s social policies:

(i) Poverty Reduction (section C1/BP); (ii) Gender and Development (section C2/BP); and (iii) Social Dimensions (section C3/BP).

The Operations Manual (section C2) provides procedures for gender to be considered by operations departments at all stages of the project cycle from preparation to evaluation. A detailed gender analysis and preparation of a project gender action plan are required for projects that have potential to correct gender disparities, could significantly mainstream gender equity concerns, or are likely to have substantial gender impact. At an early stage in project preparation, all ADB loans and grants are assigned to one of the four gender categories: gender equity theme, effective gender mainstreaming, some gender elements, or no gender elements.

continued on next page

Table continued

146 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The Operations Manual (section C3) provides procedures for integrating social dimensions into programs and projects. Operations departments conduct an IPSA for all programs and projects to identify the expected poverty and social impacts of the intervention and key social issues (such as participation, gender, involuntary resettlement, indigenous peoples, labor, affordability, and other risks and/or vulnerabilities) that need to be addressed during implementation. Based on the issues identified, social analysis should be carried out to identify and formulate design measures and implementation arrangements to maximize the social benefits and avoid or minimize the social risks of the project, and to do so in a participatory manner.

Environment

(i) Environment Operational Directions 2013–2020 (approved by the President)—Articulates how ADB will step up efforts to help the region transition to environmentally sustainable growth.

(ii) The Bank’s Policy on Forestry (1995, approved by the BOD)—Provides the strategic basis and policy for ADB operations in forestry (ADB has not invested in forestry in recent years).

(iii) Climate Change Operational Framework 2017–2030 (CCOF2030) (approved by the President)—Adopted to help strengthen support to DMCs for meeting their climate commitments and building their resilience to climate change.

(iv) Climate Risk Management in ADB Projects (2014, approved at the department level)—Sets out ADB’s management approach aiming to reduce risks that climate change poses to investment projects.

(v) Disaster and Emergency Assistance Policy (2004, approved by the BOD)—Provides the policy framework for ADB assistance for disasters and for resulting emergencies.

(vi) Operational Plan for Integrated Disaster Risk Management 2014–2020 (approved by the President)—Seeks to strengthen disaster resilience in ADB’s DMCs.

Projects classified under the project classification system as “environmentally sustainable growth” support natural resource conservation, urban environmental improvement, eco-efficiency, global and regional transboundary environmental concerns including climate change mitigation and adaptation, and/or environmental policy and legislation, as explained in the Environment Operational Directions, Appendix 1.

ADB’s climate risk management framework guides climate risk screening, assessment, adaptation, monitoring, reporting of risk, and climate-proofing measures. ADB has developed tools, including the online tool “AWARE for Projects,” for consistent and systematic screening of climate risks. ADB’s climate risk management framework requires (i) context-sensitive climate risk screening at the concept development stage to identify projects that may be at medium or high risk; (ii) climate change risk and vulnerability assessment during preparation of projects at risk; (iii) technical and economic evaluation of adaptation options; (iv) identification of adaptation options in project design; and (v) monitoring and reporting of the level of risk and climate-proofing measures (Disclosure 201-2).

continued on next page

Table continued

GRI 400—Social Topics 147

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Details of ADB’s project cycle are available on the ADB website. Projects are processed in accordance with the Operations Manual. Sector and thematic groups support ADB’s operations by providing technical advice and peer review of projects. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD. Sovereign projects are approved by the BOD per the Operations Manual (section D11, paragraph 5). Nonsovereign projects are also approved by the BOD, per the Operations Manual (section D10, paragraph 8). Each project has a design and monitoring framework that provides a logical structure for results focused project design.

The design and monitoring framework provides project managers with a framework illustrating how development results will be achieved. Progress reports from borrowers (clients) and operational missions are mechanisms for monitoring a project’s performance toward achievement of development results. ADB’s e-Operations—an online system for processing and implementing sovereign operations, launched in 2010—enables the systematic capture and recording of ADB’s outputs and outcomes by sector. Results by sector are summarized on the ADB website.

In monitoring the integration of social dimensions into ADB operations in accordance with the Operations Manual (section C3), project reviews should assess (i) the progress of social actions and delivery of benefits to intended beneficiaries, (ii) achievement of results at the sector level, (iii) inclusion of vulnerable and marginalized groups, (iv) participation of stakeholders (including beneficiaries and adversely affected people), and (v) mitigation of adverse effects. During project implementation, operations departments are specifically required to monitor gender concerns and components in accordance with the Operations Manual (section C2).

ADB engages in social and environmental policy dialogue with its DMCs and regularly uses regional and national conferences and other events to share its social and environmental knowledge products and to exchange views with government officials and other key audiences.

Safeguard Policies, Procedures, and Responsibilities. ADB’s SPS (approved by the BOD) applies to all of ADB’s investment projects. The SPS aims to promote the sustainability of project outcomes by protecting the environment and people by (i) avoiding, where possible, the adverse impacts of projects on the environment and affected people; (ii) minimizing, mitigating, and/or compensating for adverse project impacts on the environment and affected people when avoidance is not possible; and (iii) helping borrowers (clients) strengthen their safeguard systems and develop the capacity to manage environmental and social risks.

The three key safeguard areas are environment, involuntary resettlement, and indigenous peoples. Environmental policy principles include biodiversity protection and sustainable natural resource management, pollution prevention and abatement, health and safety, and physical cultural resources. The SPS notes that ADB will not finance (i) projects that do not comply with the SPS; (ii) projects that do not comply with the host country’s social and environmental laws and regulations, including those laws implementing host country obligations under international law; and (iii) project activities on the prohibited investments list contained in Appendix 5 of the SPS.

continued on next page

Table continued

148 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

The SPS also provides a platform for affected people and other interested stakeholders to participate in project design and implementation. “Meaningful consultation” and information disclosure must be undertaken in accordance with the SPS requirements, and in line with ADB’s PCP. This states ADB’s commitment to openness, transparency, and communications with stakeholders, including affected persons. The policy requires all projects to develop a stakeholder communication strategy to support two-way communication with stakeholders. ADB must also disclose project information unless there is a compelling reason for nondisclosure, subject to a set of limited policy exceptions. Strengthening Participation for Development Results: An Asian Development Bank Guide to Consultation and Participation provides information and tools that ADB staff and stakeholders can use to implement participatory approaches effectively.

The SPS (paragraphs 48-52) and the Operations Manual (section F1, paragraphs 4-13) set out the requirements for ADB’s operations departments to screen and categorize all investment projects as A, B, C, or FI (financial intermediary) at the project identification stage to (i) determine the significance of potential impacts or risks of the project with respect to the environment, involuntary resettlement, and indigenous peoples; (ii) identify the level of assessment and resources required to address any safeguard issues; and (iii) determine the information disclosure and consultation requirements.

For categories A and B projects, borrowers (clients) are responsible for assessing the environmental and/or social impacts of their program or project and implementing safeguards requirements 1–3 of the SPS, as relevant. Borrowers (clients) prepare, as required, an environmental assessment and review framework, environmental impact assessment, or initial environmental examination incorporating an environmental management plan; a resettlement framework or resettlement plan; and/or an indigenous peoples’ planning framework or indigenous peoples plan. These safeguard documents will include the proposed mitigation measures, monitoring, and reporting requirements to be adopted. ADB’s operations departments are responsible for undertaking due diligence and reviewing the borrower’s/client’s safeguard documents to ensure safeguard measures accord with the SPS and are in place, as per the Operations Manual (section F1, paragraphs 14-24). Legal agreements must include adequate covenants to address implementation of the SPS and specifically the environmental management plan or environmental assessment and review framework; the resettlement plan or resettlement framework; the indigenous peoples plan or indigenous peoples planning framework; or other instruments, where applicable, including the submission of monitoring reports. For category C projects, ADB’s operations departments are responsible for undertaking due diligence, but no safeguards documents are required because minimal or no environmental impacts and/or no involuntary resettlement or indigenous peoples’ impacts are expected. For category FI projects, financial intermediaries (FIs) are required to maintain an appropriate environmental and social management system as part of their overall management system unless their investments have minimal or no adverse environmental or social risk. ADB’s operations departments are

continued on next page

Table continued

GRI 400—Social Topics 149

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

responsible for conducting due diligence of FI projects in line with the SPS (paragraphs 65-67) and the Operations Manual (section F1, paragraphs 54-59). Due diligence includes reviewing the FIs’ commitment and capacity to address environmental and social risk. Projects that are determined to be highly risky or involve serious, multidimensional, and generally interrelated potential social and/or environmental impacts are classified as highly complex and sensitive by the chief compliance officer. Such projects require the engagement of an independent advisory panel during project preparation and implementation and stringent supervision and monitoring if taken forward.

Management considers adherence to safeguard policy requirements in approving an investment project for submission to the BOD. If not fully compliant, cancellation of the project will be considered. Sovereign projects are approved by the BOD per the Operations Manual (section D11, paragraph 5). Nonsovereign projects are also approved by the BOD, per the Operations Manual (section D10, paragraph 8). The chief compliance officer is responsible for monitoring ADB-wide compliance with safeguard policy requirements and reporting to the President, as well as advising and assisting operations departments in safeguard policy matters and advising Management on safeguard policy issues and project compliance status, as per the Operations Manual (section F1, paragraph 78).

The SPS (paragraphs 57–58) and the Operations Manual (section F1, paragraphs 25–30) set out the monitoring requirements for projects. Project-specific monitoring requirements are set out in the environmental management plan, the resettlement plan, and/or the indigenous peoples plan. Borrowers are required to submit to ADB for review and disclosure the following monitoring reports: (i) semiannual reports during project construction, and annual reports during project operation for environment category A projects; and periodic monitoring reports (as deemed appropriate by ADB) for environment category B projects; (ii) semiannual reports for involuntary resettlement categories A and B projects; (iii) semiannual monitoring reports for indigenous peoples categories A and B projects; and (iv) quarterly monitoring reports for highly complex and sensitive projects. If noncompliance is identified, corrective action will be agreed for the borrower to implement. Borrowers (clients) are also required to submit to ADB for review and disclosure any updated safeguards documentation or corrective action plan produced, including in response to any unanticipated impacts or noncompliance identified.

During project implementation, ADB staff members or consultants visit the project site to ascertain progress and compliance with the safeguard requirements, in line with the SPS (paragraph 57) and the Operations Manual (section F1, paragraphs 25–30). On behalf of the chief compliance officer, the Environment and Social Safeguards Division conducts safeguard review missions for selected ongoing projects. These involve visiting the project to determine whether safeguard plans are being properly implemented, specifically by inspecting project records and sites to ascertain the status of implementation of safeguard plans. If any safeguard noncompliance is identified, corrective action will be agreed for the borrower (client) to implement and disclosed on the ADB website.

continued on next page

Table continued

150 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

If a borrower (client) fails to comply with legal agreements for safeguards and corrective action fails to reestablish compliance, then ADB may exercise legal remedies, including suspension, cancellation, or acceleration of loan maturity when all other available means to rectify the situation have been taken.

ADB’s operations departments engage public and private sector borrowers (clients) (including FIs) and other interested stakeholders in DMCs to increase general awareness and capacity for safeguards implementation through meetings and training sessions, including on safeguards orientation. ADB also engages with DMC governments for strengthening and using country safeguard systems by providing technical assistance projects.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201.

Gender, social development, environment, climate change and safeguard specialists are required to have specific competencies in their technical field. Management and operations department staff members involved in project processing through to evaluation must also be aware of and understand the social, environment and safeguard policies and procedures to be followed. The training needs of individual staff members are identified through performance and career reviews and discussions with supervisors.

Staff awareness of gender and social development issues is raised through the activities of the Gender Equity and Social Development Thematic Groups. The Environment Thematic Group and Climate Change and Disaster Risk Management Thematic Group raise awareness among staff on environment and climate change issues. The training needs of sector and thematic groups (including the Gender Equity, Social Development, Environment and Climate Change, and Disaster Risk Management Thematic Groups) are analyzed, and appropriate workshops and seminars as well as formal training in poverty, gender, and social analysis provided. Technical guidance materials available on the ADB website help operations departments manage the social development aspects of projects, and climate and disaster risks throughout the project cycle, including climate-proofing and disaster management guidance.

As of end 2017, ADB had 117 staff positions dedicated to environment and social safeguards to meet the resource implications discussed in paragraph 79 of the SPS (there are 60 social safeguard staff positions and 57 environment safeguard positions). This is an 80% increase from the 65 staff positions when the SPS was approved in 2009. Given that SPS recommends that priority should be given to resident missions in increasing staff capacity, the number of resident mission-based safeguard staff has increased by 246% (from 13 in 2009 to 45 by the end of 2017). There are safeguards staff in 16 of ADB’s 27 resident missions. Through the Environment Thematic Group and the Social Safeguards Network, safeguard specialists share ideas, solutions to concerns, experiences, and best practices, as well as useful references.

continued on next page

Table continued

GRI 400—Social Topics 151

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Staff awareness of SPS implementation, operational procedures, and safeguard issues is raised through training programs and the activities of the Environment Thematic Group and Social Safeguards Network. ADB’s sourcebooks on environment, involuntary resettlement, and indigenous peoples’ safeguards are available to all staff and updated regularly to incorporate lessons learned. Training programs offered include orientation on ADB safeguards, environment and social safeguard modules during quarterly Project Development and Management Workshops, dedicated environment and social safeguards trainings, and an e-learning module for environment safeguards. Further details are provided in the section on “Environment and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.

Grievances. Under SPS the borrower (client) must establish and maintain a project-level Grievance Redress Mechanism to receive and facilitate resolution of affected peoples’ concerns and grievances about the environmental and social safeguards performance at the project level. If project-affected people feel a project does not comply with ADB’s environmental, involuntary resettlement, or indigenous people’s safeguards, they can bring this to the attention of the project’s Grievance Redress Mechanism. After exhausting complaint avenues at the project, resident mission or operations department levels, project-affected people can submit complaints directly to ADB’s Accountability Mechanism (Disclosure 203).

Evaluation. ADB’s structured program of Managing for Development Results encompasses the process and tools to evaluate the effectiveness of the management approach (Disclosures 201 and 203).

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. Project completion reports produced by ADB’s operations departments include self-evaluation of the implementation of gender action plans and safeguards plans as well as the degree of compliance with gender, social development and safeguard related covenants and lessons learned. Project performance evaluations by IED also consider the results of gender action plans and the implementation of safeguards plans to the extent that specific interventions were identified, especially if negative. This is the case even if gender or safeguard outcomes were not identified in the project design and monitoring framework. Effectiveness is influenced by whether (i) safeguard plans and monitoring reports, if any, were adequate, disclosed in time, and executed in time; (ii) safeguard monitoring was adequate and timely; (iii) any changes in safeguard measures were well justified and were made in reaction to a change in scope; (iv) potentially negative environmental and social impacts of the project were avoided, minimized, or mitigated, and affected people were properly compensated and not made worse off; (v) there are remaining or unresolved safeguard-related issues and complaints; and (vi) opportunities materialized for affected or displaced people to benefit from the project, if the outcomes are negative.

continued on next page

Table continued

152 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

In specific cases, evaluations assess (i) the potential for affected people to have continuous access to project benefits; (ii) for projects involving involuntary resettlement, the likelihood that resettled persons continue to have access to services in their resettlement sites; and (iii) opportunities for participation, particularly of disadvantaged and vulnerable groups, in the operation and maintenance of projects.

The effectiveness of the SPS at achieving ADB’s safeguard objectives was to be assessed by ADB’s IED 5 years after it became effective in 2010, with an interim review after 3 years. Previously in 2014, IED evaluated ADB’s SPS in the Safeguards Operational Review: ADB Processes, Portfolio, Country Systems, and Financial Intermediaries. This was the first of a planned two-step evaluation. IED had five main recommendations: (i) improve quality control of categories B and FI projects, (ii) enhance the supervision of safeguards implementation, (iii) improve the reporting of safeguards outcomes, (iv) promote the use of country safeguard systems, and (v) develop more guidance notes for safeguards. None of the recommendations specifically related to health and safety. The second step, a Real-Time Evaluation of ADB’s Safeguard Implementation Experience Based on Selected Case Studies, was completed in 2016 (it was deemed too early to undertake the full effectiveness review). It found ADB’s safeguard framework is seen as a benchmark but with areas that need strengthening in terms of project design and implementation.

The management responses to the evaluations outline the measures that operations departments and the Sustainable Development and Climate Change Department (as the department with safeguards oversight) will undertake with respect to reviewing safeguard plans, conducting project supervision, disclosing borrower’s and client’s monitoring reports, strengthening and using country safeguard systems, and building the capacity of staff and implementing agencies to manage safeguards. Following the 2014 and 2016 evaluations, IED will assess ADB’s effectiveness in achieving its safeguard objectives, and the extent to which the policy principles aspired to by the SPS have been achieved. This will involve evaluating safeguard outcomes in projects that are sufficiently mature to be able to observe outcomes on the ground and assessing the extent to which the policy principles aspired to by the SPS have been achieved. It will also review the relevance of ADB’s safeguard policy, its architecture to the evolving needs of clients, and the changes in external content of development financing and the internal context of ADB’s diversifying portfolio by 2019.

The following evaluations related to impacts on local communities were also undertaken by IED:

(i) ADB’s Support for Inclusive Growth (2014)(ii) ADB Private Sector Operations: Contributions to Inclusive and

Environmentally Sustainable Growth (2013)(iii) ADB’s Support for Achieving the Millennium Development Goals (2013) (iv) ADB’s Social Protection Strategy (2012)(v) ADB Support for Gender and Development (2017)(vi) Environmentally Sustainable Growth: A Strategic Review (2016,

Disclosure 302)

continued on next page

Table continued

GRI 400—Social Topics 153

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

(vii) Development Effectiveness, Natural Disasters, and Climate Change (2016, Disclosure 202-1)

(viii) Mitigating the Impacts of Climate Change and Natural Disasters for Better Quality Growth (2016, Disclosure 202-1)

(ix) Climate Change and Natural Disasters: Transforming Economies and Policies for a Sustainable Future (2016, Disclosure 202-1)

(x) Real-Time Evaluation of ADB’s Initiatives to Support Access to Climate Finance (2014)

(xi) ADB’s Response to Natural Disasters and Disaster Risks (2012)413-1 Operations with

local community engagement, impact assessments, and development programs

All 140 (in 2016) and 121 (in 2017) (100%) investment commitments were assessed through an IPSA as discussed in the section on “Social Development” in the Asian Development Bank Sustainability Report 2018. The IPSA must be disclosed on the ADB website. Based on the issues identified, social analysis should be carried out in a participatory manner to identify and formulate design measures and implementation arrangements to maximize the social benefits and avoid or minimize the social risks of the project, and to do so in a participatory manner.

All projects that are categorized as effective gender mainstreaming (EGM) or with gender equality as a theme (GEN) are also required to have a Gender Action Plan. In 2016–2017, 98 (38%) approved projects produced Gender Action Plans (Table 413-2), which are disclosed on the ADB website as part of the project’s report and recommendation of the President.

Table 413-2: Number of Projects Containing Gender Action Plans, 2016–2017

Gender Category 2016 2017Effective Gender Mainstreaming 41 42Gender Equality as a Theme 10 5Total 51 47

Source: Sustainable Development and Climate Change Department, Asian Development Bank.

All 140 (in 2016) and 121 (in 2017) (100%) investment commitments were also screened and categorized for environment, involuntary resettlement and indigenous peoples safeguards, as discussed in the section on “Environmental and Social Safeguards” in the Asian Development Bank Sustainability Report 2018. In accordance with the SPS requirements, all categories A and B projects must include meaningful consultation, provide a Grievance Redress Mechanism to affected persons, and ensure environment safeguard documentation, including monitoring reports as required, are disclosed on the ADB website.

In 2016–2017, there were 23 (9%) approved projects that were category A for environment, 32 (12%) that were category A for involuntary resettlement, and 1 (0.4%) that was category A for indigenous peoples. There were 145 (56%) approved projects that were category B for environment, 78 (30%) that were category B for involuntary resettlement, and 38 (15%) that were category B for indigenous peoples. 30 (11%) approved projects were category FI.

continued on next page

Table continued

154 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Categorization helps determine the level of assessment and resources required to address any safeguard issues and the information disclosure and consultation requirements. Projects are categorized as A, B, C, or FI and separately for environment, involuntary resettlement, and indigenous people’s impacts. Environment category A indicates significant irreversible, diverse or unprecedented adverse impacts; category B indicates less adverse impacts; and category C indicates minimal or no impacts. For involuntary resettlement and indigenous peoples, category A indicates significant adverse impacts, category B indicates less adverse impacts, and category C indicates no impacts. Category FI is for projects that utilize the financial intermediary modality.

413-2 Operations with significant actual and potential negative impacts on local communities

1, 2 In 2016–2017, there were 23 (9%) approved projects that were category A for environment (ENV), 32 (12%) that were category A for involuntary resettlement (IR), and 1 (0.4%) that was category A for indigenous peoples (IP). Details of these projects’ significant adverse environment and/or social impacts and management measures to be implemented are available in the environmental impact assessments, resettlement plans, and indigenous peoples plans (or equivalent) disclosed on the ADB website for these projects.

The projects that were category A for one or more safeguards are as follows:

(i) 2016 (21 projects, 14.5% of 145 projects)

• Azerbaijan: Shah Deniz Gas Field Expansion (ENV)• Azerbaijan: Shah Deniz Gas Field Expansion Project (ENV)• Bangladesh: Natural Gas Infrastructure and Efficiency Improvement

Project (IR)• Bangladesh: SASEC Chittagong-Cox’s Bazar Railway Project,

Phase 1 (ENV, IR)• People’s Republic of China: Chongqing Integrated Logistics

Demonstration Project (IR)• People’s Republic of China: Henan Hebi Qihe River Environmental

Improvement and Ecological Conservation Project (IR)• People’s Republic of China: Jiangxi Xinyu Kongmu River Watershed

Flood Control and Environmental Improvement Project (IR)• People’s Republic of China: Qinghai Haidong Urban-Rural Eco

Development Project (IR)• People’s Republic of China: Shandong Groundwater Protection

Project (ENV, IR)• India: Bihar New Ganga Bridge Project (ENV, IR)• India: Climate Adaptation in Vennar Subbasin in Cauvery Delta

Project (IR)• India: Uttar Pradesh Major District Roads Improvement Project (IR)• India: Visakhapatnam-Chennai Industrial Corridor Development

Program (Tranche 1) (IR)• Indonesia: Flood Management in Selected River Basins Sector

Project (IR)• Indonesia: Muara Laboh Geothermal Power (ENV)• Indonesia: Tangguh Liquified Natural Gas Expansion (ENV, IP)• Nepal: South Asia Subregional Economic Cooperation Roads

Improvement Project (ENV)

continued on next page

Table continued

GRI 400—Social Topics 155

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

• Pakistan: National Motorway M-4 Gojra–Shorkot-Khanewal Section Project – Additional Financing (ENV, IR)

• Pakistan: Pehur High Level Canal Extension (ENV, IR)• Sri Lanka: Green Power Development and Energy Efficiency

Improvement Investment Program (Tranche 2) (ENV)• Viet Nam: Greater Mekong Subregion Ben Luc–Long Thanh

Expressway Project ( Tranche 2) (ENV, IR)

(ii) 2017 (23 projects, 19.0% of 121 projects)

• Bangladesh: Reliance Bangladesh Liquefied Natural Gas and Power Project (ENV)

• Bangladesh: South Asia Subregional Economic Cooperation Dhaka-Northwest Corridor Road Project, Phase 2 (Tranche 1) (IR)

• People’s Republic of China: Guizhou Rocky Desertification Area Water Management Project (ENV, IR)

• People’s Republic of China: Heilongjiang Green Urban and Economic Revitalization Project (ENV, IR)

• People’s Republic of China: Shanxi Urban-Rural Water Source Protection and Environmental Demonstration Project (IR)

• People’s Republic of China: Xinjiang Changji Integrated Urban-Rural Infrastructure Demonstration Project (IR)

• Georgia: Batumi Bypass Road Project (ENV, IR)• India: Karnataka State Highways Improvement III Project (IR)• India: Railway Sector Investment Program (Tranche 3) (IR)• India: Rajasthan State Highway Investment Program (Tranche 1) (IR)• Mongolia: Ulaanbaatar Urban Services and Ger Areas Development

Investment Program (Tranche 2) (IR)• Nepal: Power Transmission and Distribution Efficiency Enhancement

Project (IR)• Pakistan: Central Asia Regional Economic Cooperation Corridor

Development Investment Program (Tranche 1) (IR)• Pakistan: Jalalpur Irrigation Project (ENV, IR)• Pakistan: Peshawar Sustainable Bus Rapid Transit Corridor Project

(ENV, IR)• Pakistan: Punjab Intermediate Cities Improvement Investment

Project (IR)• Philippines: Improving Growth Corridors in Mindanao Road Sector

Project (IR)• Sri Lanka: Jaffna and Kilinochchi Water Supply Project – Additional

Financing (ENV)• Sri Lanka: Mahaweli Water Security Investment Program (Tranche 2)

(ENV)• Sri Lanka: Wind Power Generation Project (ENV)• Thailand: Cornerstone Investment in Leading Independent Power

Producer Project (ENV)• Uzbekistan: Power Generation Efficiency Improvement Project

(ENV)• Viet Nam: Secondary Green Cities Development Project (IR)

continued on next page

Table continued

156 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Projects are categorized as A, B, C, or FI and separately for environment, involuntary resettlement, and indigenous people’s impacts. Environment category A indicates significant irreversible, diverse or unprecedented adverse impacts; category B indicates less adverse impacts; and category C indicates minimal or no impacts. For involuntary resettlement and indigenous peoples, category A indicates significant adverse impacts, category B indicates less adverse impacts, and category C indicates no impacts. Category FI is for projects that utilize the financial intermediary modality.

416 Customer Health and Safety, 2016 Edition416 Customer health

and safety – management approach

Refer to the sections on “Health” and “Environment and Social Safeguards” in the Asian Development Bank Sustainability Report 2018.

MATERIALITY AND BOUNDARY

Customer health and safety is (externally) material to ADB because (i) ADB invests in projects in the health sector, and that support inclusive economic growth, and (ii) health and safety impacts are associated with infrastructure projects that are funded by ADB.

The management approach covers all of ADB’s operations.

MANAGEMENT APPROACH

The following policies and procedures are applied in considering investments in health, and in approving investments in other sectors (especially infrastructure) to improve health outcomes and avoid or minimize adverse health and safety impacts on affected people.

Commitment, Goals, and Targets. Refer to Disclosure 203 for ADB’s commitment, goals, and targets in relation to investments, including those in the health sector. Key actions of the MTR Action Plan, Appendix 1, include increasing the share of investments in health to 3%–5% of total financing by 2020 and ensuring effective implementation of the SPS.

Investment Policies, Procedures, and Responsibilities. ADB’s investment projects in health are guided by the Operational Plan for Health, 2015–2020 (approved by the President in 2015) as discussed in the section on “Health” in the Asian Development Bank Sustainability Report 2018. The Health Sector Group provide operations departments with technical advice and peer review of projects related to health. Management considers adherence to ADB’s policies when approving an investment project for submission to the BOD.

continued on next page

Table continued

GRI 400—Social Topics 157

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Safeguard Policies, Procedures, and Responsibilities. ADB aims to promote the sustainability of its project outcomes by protecting the environment and people through its environment and social safeguards as discussed in Disclosure 413. For occupational health and safety ADB’s environment safeguards, as detailed in the SPS, require that borrowers (clients) provide workers with a safe and healthy working environment. For community health and safety, they require that borrowers (clients) identify and assess the risk to, and potential impacts on, the safety of affected communities during the design, construction, operation, and decommissioning of the project, and establish preventative measures and plans to address the risks in a manner commensurate with the identified risks and impacts. These measures will favor avoidance of risks and impacts over minimization and reduction. Consideration is given to potential exposure to both accidental and natural hazards, especially those associated with structural elements of a project. Affected communities must be informed of significant potential hazards in a culturally appropriate manner. For structural elements, including dams, in high-risks locations or where failure or malfunction may threaten the safety of communities, a review by qualitied and experienced experts, separate from those responsible for design and construction, must be undertaken.

The SPS refers to the World Bank–IFC Environment, Health and Safety (EHS) Guidelines for preventative and protective measures to be applied. The EHS Guidelines include general guidance on occupational health and safety and community health and safety and sector specific guidance.

ADB categorizes all investments according to their environmental impact, including consideration of potential health and safety impacts and risks, as detailed in the SPS. Direct, indirect, cumulative, and induced impacts or risks on occupational health and safety are assessed in environmental impact assessments for category A environment projects or initial environmental examinations for category B environment projects prior to approval of the project. The Operations Manual (section F1) sets out the policy and procedures for operations departments undertaking due diligence for environmental safeguards. Management considers the results of safeguards due diligence when approving an investment project for submission to the BOD. ADB’s chief compliance officer is responsible for monitoring compliance with the SPS.

Resources. ADB’s 3-year Work Program and Budget Framework sets out the budget and staff requirements for implementing its 3-year operational and organizational work program, as discussed in Disclosure 201. As of end of 2017, ADB had 117 staff positions dedicated to environment and social safeguards as discussed in Disclosure 413.

continued on next page

Table continued

158 Asian Development Bank 2018 Sustainability Report

GRI Standards Code

GRI Standards Disclosure Name SDG Tag ADB Response (2016–2017)

Grievances. Refer to Disclosure 203 for the grievance procedure in relation to investments. Grievances received during 2016-2017 are discussed in the section on “Being Accountable” in the Asian Development Bank Sustainability Report 2018. In relation to community health and safety one complaint received by the Office of the Compliance Review Panel from Georgia related to the Sustainable Urban Transport Investment Program (noise impacts from road traffic) was found eligible and went through a full compliance review. OSPF received one eligible complaint related to community health and safety for the Sustainable Urban Development Investment Program in Armenia, which was deemed eligible as efforts to resolve the concerns/problems had not been successful.

Evaluation. ADB’s structured program of Managing for Development Results encompasses the processes and tools to evaluate the effectiveness of the management approach (Disclosure 201). No indicators in the DEfR specifically relate to health and safety impacts, but the 2016–2017 DEfR reported health sector targets as follows: financing for health was 1.4% in 2014–2016, and 1.0% in 2014–2017, against a target of 3%–5% by 2020.

Refer to Disclosure 203 on self-evaluation, conducted by those responsible for the design and implementation of operations, and independent evaluation conducted by IED. No IED evaluations specific to health and safety impacts were undertaken in 2016–2017. Disclosure 203 discusses evaluations in relation to inclusive economic growth, and Disclosure 413 addresses evaluation of ADB’s safeguards (no recommendations specifically related to health and safety).

416-1 Assessment of the health and safety impacts of product and service categories

All 140 (in 2016) and 121 (in 2017) (100%) investment commitments were screened and categorized for environment safeguards, including consideration of potential occupational and community health and safety impacts and risks, as discussed in the section on “Environmental and Social Safeguards” in the Asian Development Bank Sustainability Report 2018. In 2016–2017, there were 23 (9%) approved projects that were category A for environment, and 145 (56%) approved projects that were category B for environment.

Details of actual occupational and community health and safety impacts and risks, and management measures to be implemented, are available in environmental impact assessments for category A projects; or initial environmental examinations for category B projects, disclosed on the ADB website.

Categorization helps determine the level of assessment and resources required to address any safeguard issues and the information disclosure and consultation requirements. Environment category A indicates significant irreversible, diverse, or unprecedented adverse impacts; category B indicates less adverse impacts; and category C indicates minimal or no impacts. Category FI is for projects that utilize the financial intermediary modality.

GRI = Global Reporting Initiative, SDG = Sustainable Development Goal.Source: Asian Development Bank.

Table continued

Table A203-1a: Investment Financing Approved and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2016

(Monetary value $ million and number of investments)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 4,539.2 5,567.8 10,107.0 38 35 21Transport 3,870.7 1,618.2 5,488.9 21 40 24Water and Other Urban Infrastructure and Services

1,520.7 609.2 2,130.0 8 21 13

Agriculture, Natural Resources, and Rural Development

1,121.1 242.8 1,363.9 5 21 13

Information and Communication Technology

50.0 0.0 50.0 0 1 1

0.0 = value is less than half of unit employed.Note: Component percentages may not total 100% because non-infrastructure-related investments are excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-1b: Investment Financing Approved and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2017

(Monetary value $ million and number of investments)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 4,852.6 3,176.7 8,029.3 32 35 27Transport 4,431.9 996.3 5,428.2 22 29 22Water and Other Urban Infrastructure and Services

1,816.4 85.8 1,902.1 8 14 11

Agriculture, Natural Resources, and Rural Development

2,217.0 536.8 2,753.8 11 17 13

Information and Communication Technology

15.0 10.0 25.0 0 1 1

Note: Component percentages may not total 100% because non-infrastructure-related investments are excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

APPENDIX 1Financing Tables for Disclosure 203-1 (Infrastructure Investments and Services Supported)

Appendix 1160

Table A203-1c: Technical Assistance Financing Approved and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2016

(Monetary value $ million and number of technical assistance)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 18.3 24.1 42.4 13 45 15Transport 26.9 12.3 39.2 12 34 11Water and Other Urban Infrastructure and Services

19.1 26.2 45.3 14 35 11

Agriculture, Natural Resources, and Rural Development

14.2 22.8 37.0 12 40 13

Information and Communication Technology

0.6 0.0 0.6 0 1 0

0.0 = value is less than half of unit employed.Note: Component percentages may not total 100% because non-infrastructure-related technical assistance is excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-1d: Technical Assistance Financing Approved and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2017

(Monetary value $ million and number of technical assistance)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 22.3 24.6 46.9 14 44 14Transport 31.1 9.5 40.6 12 33 11Water and Other Urban Infrastructure and Services

23.9 27.3 51.2 16 37 12

Agriculture, Natural Resources, and Rural Development

25.1 12.9 38.1 12 39 12

Information and Communication Technology

2.3 1.0 3.3 1 3 1

Note: Component percentages may not total 100% because non-infrastructure-related technical assistance is excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 1 161

Table A203-1e: Investment Financing Commitments and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2016

(Monetary value $ million and number of investments)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 2,604.7 4,767.2 7,371.9 36 27 18Transport 2,755.7 1,700.8 4,456.4 22 38 25Water and Other Urban Infrastructure and Services

1,719.7 441.2 2,160.9 11 23 15

Agriculture, Natural Resources, and Rural Development

981.0 101.8 1,082.9 5 20 13

Information and Communication Technology

24.8 22.5 47.3 0 1 1

Note: Component percentages may not total 100% because non-infrastructure-related investments are excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-1f: Investment Financing Commitments and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2017

(Monetary value $ million and number of investments)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 5,541.5 4,084.7 9,626.2 35 35 24Transport 4,982.2 1,572.1 6,554.2 24 33 23Water and Other Urban Infrastructure and Services

1,631.4 189.0 1,820.4 7 17 12

Agriculture, Natural Resources, and Rural Development

1,431.9 320.6 1,752.5 6 17 12

Information and Communication Technology

42.5 0.0 42.5 0 1 1

0.0 = value is less than half of unit employed.Note: Component percentages may not total 100% because non-infrastructure-related investments are excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 1162

Table A203-1g: Technical Assistance Financing Commitments and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2016

(Monetary value $ million and number of technical assistance)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 21.3 27.6 48.9 15 49 16Transport 25.7 27.6 53.3 16 34 11Water and Other Urban Infrastructure and Services

16.4 19.5 35.9 11 31 10

Agriculture, Natural Resources, and Rural Development

16.4 15.5 31.9 10 40 13

Information and Communication Technology

0.6 0.0 0.6 0 1 0.3

0.0 = value is less than half of unit employed.Note: Component percentages may not total 100% because non-infrastructure-related technical assistance is excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-1h: Technical Assistance Financing Commitments and Cofinanced Funds Mobilized for Infrastructure-Related Sectors, 2017

(Monetary value $ million and number of technical assistance)

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of Projects

Share (%)

Energy 20.1 19.6 39.7 13 40 13Transport 30.9 7.9 38.8 13 31 10Water and Other Urban Infrastructure and Services

26.9 17.7 44.6 14 38 13

Agriculture, Natural Resources, and Rural Development

20.7 18.4 39.1 13 35 12

Information and Communication Technology

1.6 1.0 2.6 1 2 1

Note: Component percentages may not total 100% because non-infrastructure-related technical assistance is excluded. Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-2a: Sovereign Financing Approved and Cofinanced Funds Mobilized by Region (Investments), 2016–2017

Monetary value ($ million) and number of sovereign investments (and as share of total sovereign investments)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 1,863.0 315.8 2,178.8 12 17 13 2,120.4 444.6 2,565.0 16 14 15Pacific 552.6 196.1 748.7 4 18 13 410.3 62.4 472.7 3 15 16Central and West Asia

3,605.7 1,113.8 4,719.5 26 28 21 3,345.7 1,158.6 4,504.3 29 20 22

South Asia 4,027.8 2,361.9 6,389.7 36 39 29 4,525.8 848.9 5,374.7 34 30 32Southeast Asia

1,750.6 2,179.2 3,929.8 22 31 23 2,364.0 402.6 2,766.6 18 14 15

Regional 15.4 1.5 16.9 0 1 1 0.0 0.0 0.0 0 0 0Asia and the Pacific (total)

11,815.1 6,168.2 17,983.4 100 134 100 12,766.1 2,917.2 15,683.3 100 93 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-2b: Sovereign Financing Approved and Cofinanced Funds Mobilized by Region (Technical Assistance), 2016–2017

Monetary value ($ million) and number of sovereign technical assistance (and as share of total sovereign technical assistance)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 17.2 7.4 24.6 8 40 13 23.3 5.8 29.0 9 42 14Pacific 8.8 5.6 14.3 5 17 6 6.9 5.1 12.1 4 13 4Central and West Asia

26.4 19.8 46.2 15 46 15 28.1 17.1 45.2 14 51 17

South Asia 18.9 22.9 41.8 14 54 18 24.4 9.8 34.1 11 45 15Southeast Asia

20.8 34.6 55.3 18 48 16 29.1 46.0 75.1 24 49 16

Regional 70.2 56.1 126.3 41 92 31 85.2 34.2 119.3 38 102 34Asia and the Pacific (total)

162.2 146.2 308.5 100 297 100 196.9 117.9 314.8 100 302 100

Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

APPENDIX 2 Financing Tables for Disclosure 203-2 (Significant Indirect Economic Impacts)

Appendix 2164

Table A203-2c: Nonsovereign Financing Approved and Cofinanced Funds Mobilized by Region (Investments), 2016–2017

Monetary value ($ million) and number of nonsovereign investments (and as share of total nonsovereign investments)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 325.0 336.1 661.1 8 5 16 740.0 707.0 1,447.0 16 6 16Pacific 0.0 0.0 0.0 0 0 0 2.0 1.0 3.0 0 1 3Central and West Asia

601.0 593.0 1,194.0 14 6 19 280.0 1,327.3 1,607.3 18 7 19

South Asia 865.0 595.0 1,460.0 18 9 28 1,047.0 1,168.0 2,215.0 24 10 27Southeast Asia

664.2 4,310.3 4,974.4 60 8 25 460.8 2,254.8 2,715.6 30 7 19

Regional 46.5 0.0 46.5 1 4 13 620.0 488.2 1,108.2 12 6 16Asia and the Pacific (total)

2,501.7 5,834.3 8,336.0 100 32 100 3,149.8 5,946.4 9,096.2 100 37 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-2d: Nonsovereign Financing Approved and Cofinanced Funds Mobilized by Region (Technical Assistance), 2016–2017

Monetary value ($ million) and number of nonsovereign technical assistance (and as share of total nonsovereign technical assistance)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Pacific 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Central and West Asia

0.0 0.0 0.0 0 0 0 0.5 0.0 0.5 5 1 9

South Asia 0.8 1.3 2.1 24 2 25 3.8 0.0 3.8 37 3 27

Southeast Asia

0.3 0.5 0.8 9 3 38 0.2 0.0 0.2 2 1 9

Regional 5.7 0.0 5.7 67 3 38 5.0 0.8 5.8 56 6 55

Asia and the Pacific (total)

6.8 1.8 8.6 100 8 100 9.5 0.8 10.3 100 11 100

0.0 = value is less than half of unit employedSource: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2 165

Table A203-2e: Sovereign Financing Approved and Cofinanced Funds Mobilized by Sector (Investments), 2016–2017

Monetary value ($ million) and number of sovereign investments (and as share of total sovereign investments)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)

Energy 3,025.1 2,075.2 5,100.2 28 24 18 3,112.7 746.0 3,858.7 25 17 18

Transport 3,870.7 1,618.2 5,488.9 31 40 30 4,427.9 996.3 5,424.2 35 28 30

Water and Other Urban Infrastructure and Services

1,320.7 504.2 1,825.0 10 19 14 1,616.4 85.8 1,702.1 11 13 14

Agriculture, Natural Resources, and Rural Development

976.1 147.8 1,123.9 6 18 13 2,037.0 461.8 2,498.8 16 15 16

Finance 954.0 751.3 1,705.3 9 7 5 860.0 319.9 1,179.9 8 4 4

Education 878.8 997.3 1,876.1 10 13 10 513.0 277.8 790.8 5 7 8

Health 175.0 0.0 175.0 1 2 1 170.2 19.7 189.9 1 5 5

Public Sector Management

212.7 69.2 281.9 2 8 6 4.0 0.0 4.0 0 2 2

Information and Communication Technology

0.0 0.0 0.0 0 0 0 15.0 10.0 25.0 0 1 1

Industry and Trade 402.0 5.0 407.0 2 3 2 10.0 0.0 10.0 0 1 1

Total 11,815.1 6,168.2 17,983.4 100 134 100 12,766.1 2,917.2 15,683.3 100 93 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2166

Table A203-2f: Sovereign Financing Approved and Cofinanced Funds Mobilized by Sector (Technical Assistance), 2016–2017

Monetary value ($ million) and number of sovereign technical assistance (and as share of total sovereign technical assistance)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)

Energy 18.2 23.6 41.8 14 43 14 19.3 24.6 43.9 14 42 14

Transport 26.9 12.3 39.2 13 34 11 31.1 9.5 40.6 13 33 11

Multisector 11.5 23.1 34.5 11 14 5 11.7 0.2 11.9 4 9 3

Water and Other Urban Infrastructure and Services

19.1 26.2 45.3 15 35 12 23.9 27.3 51.2 16 37 12

Agriculture, Natural Resources, and Rural Development

14.2 21.5 35.7 12 39 13 24.7 12.8 37.6 12 38 13

Finance 10.8 12.5 23.3 8 23 8 14.8 20.8 35.6 11 32 11

Education 8.1 5.0 13.1 4 21 7 11.3 3.1 14.4 5 18 6

Health 2.6 7.0 9.6 3 9 3 6.1 1.5 7.6 2 11 4

Public Sector Management

37.1 15.0 52.1 17 64 22 45.3 12.2 57.6 18 69 23

Information and Communication Technology

0.6 0.0 0.6 0 1 0 2.3 1.0 3.3 1 3 1

Industry and Trade 13.1 0.2 13.3 4 14 5 6.3 4.8 11.1 4 10 3

Total 162.2 146.2 308.5 100 297 100 196.9 117.9 314.8 100 302 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2 167

Table A203-2g: Nonsovereign Financing Approved and Cofinanced Funds Mobilized by Sector (Investments), 2016–2017

Monetary value ($ million) and number of nonsovereign investments (and as % of total nonsovereign investments)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)

Energy 1,514.2 3,492.6 5,006.8 60 11 34 1,740.0 2,430.7 4,170.6 46 18 49

Transport 0.0 0.0 0.0 0 0 0 4.0 0.0 4.0 0 1 3

Water and Other Urban Infrastructure and Services

200.0 105.0 305.0 4 2 6 200.0 0.0 200.0 2 1 3

Agriculture, Natural Resources, and Rural Development

145.0 95.0 240.0 3 3 9 180.0 75.0 255.0 3 2 5

Finance 592.5 2,141.7 2,734.2 33 15 47 1,025.9 3,440.7 4,466.6 49 15 41

Education 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Health 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Public Sector Management

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Information and Communication Technology

50.0 0.0 50.0 1 1 3 0.0 0.0 0.0 0 0 0

Industry and Trade 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Total 2,501.7 5,834.3 8,336.0 100 32 100 3,149.8 5,946.4 9,096.2 100 37 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2168

Table A203-2h: Nonsovereign Financing Approved and Cofinanced Funds Mobilized by Sector (Technical Assistance), 2016–2017

Monetary value ($ million) and number of nonsovereign technical assistance (and as share of total nonsovereign technical assistance)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)Energy 0.1 0.5 0.6 7 2 25 3.0 0.0 3.0 29 2 18

Transport 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Multisector 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Water and Other Urban Infrastructure and Services

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Agriculture, Natural Resources, and Rural Development

0.0 1.3 1.3 15 1 13 0.4 0.1 0.5 5 1 9

Finance 3.0 0.0 3.0 35 2 25 2.1 0.0 2.1 21 4 36

Education 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Health 0.2 0.0 0.2 3 1 13 0.2 0.0 0.2 2 1 9

Public Sector Management

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Information and Communication Technology

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Industry and Trade 3.5 0.0 3.5 41 2 25 3.8 0.7 4.5 44 3 27

Total 6.8 1.8 8.6 100 8 100 9.5 0.8 10.3 100 11 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-2i: Sovereign Financing Commitments and Cofinanced Funds Mobilized by Region (Investments), 2016–2017

Monetary value ($ million) and number of sovereign investments (and as % of total sovereign investments)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 1,187.7 93.5 1,281.2 10 18 14 2,202.4 532.6 2,735.0 14 15 14

Pacific 360.2 259.5 619.7 5 17 14 704.6 131.2 835.8 4 20 18

Central and West Asia

2,616.6 965.9 3,582.4 28 22 18 4,070.2 744.3 4,814.5 25 25 23

South Asia 2,671.3 794.5 3,465.8 27 33 26 5,423.1 2,638.8 8,061.9 41 34 31

Southeast Asia

1,734.7 2,197.7 3,932.4 30 34 27 2,059.6 1,108.0 3,167.6 16 15 14

Regional 15.1 1.5 16.6 0.1 1 1 0.0 0.0 0.0 0 0 0

Asia and the Pacific (total)

8,585.5 4,312.5 12,898.0 100 125 100 14,459.8 5,155.0 19,614.8 100 109 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2 169

Table A203-2j: Sovereign Financing Commitments and Cofinanced Funds Mobilized by Region (Technical Assistance), 2016–2017

Monetary value ($ million) and number of sovereign technical assistance (and as share of total sovereign technical assistance)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 24.7 7.9 32.6 10 51 17 20.5 4.6 25.1 8 37 13

Pacific 12.7 5.6 18.2 6 22 7 3.8 3.1 6.9 2 10 3

Central and West Asia

25.2 30.3 55.5 18 43 14 26.5 8.8 35.3 12 45 15

South Asia 19.1 19.7 38.8 12 52 17 20.8 16.8 37.6 13 43 15

Southeast Asia

20.3 26.5 46.7 15 44 15 32.7 40.6 73.2 24 54 18

Regional 67.6 55.0 122.6 39 89 30 87.8 34.2 121.9 41 104 35

Asia and the Pacific (total)

169.5 144.9 314.4 100 301 100 191.9 108.1 300.0 100 293 100

Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-2k: Nonsovereign Financing Commitments and Cofinanced Funds Mobilized by Region (Investments), 2016–2017

Monetary value ($ million) and number of nonsovereign investments (and as share of total nonsovereign investments)

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 387.6 341.1 728.7 10 7 28 218.1 643.9 862.0 10 6 18

Pacific 0.0 0.0 0.0 0 0 0 2.0 1.0 3.0 0.04 1 3

Central and West Asia

107.0 593.0 700.0 9 3 12 672.0 1,307.3 1,979.3 24 6 18

South Asia 584.1 457.7 1,041.8 14 10 40 893.6 1,202.7 2,096.3 25 9 26

Southeast Asia

605.9 4,259.8 4,865.6 66 2 8 329.8 2,377.8 2,707.6 33 7 21

Regional 65.9 0.0 65.9 1 3 12 171.2 413.2 584.5 7 5 15

Asia and the Pacific (total)

1,750.5 5,651.5 7,402.0 100 25 100 2,286.7 5,946.0 8,232.7 100 34 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2170

Table A203-2l: Nonsovereign Financing Commitments and Cofinanced Funds Mobilized by Region (Technical Assistance), 2016–2017

Monetary value ($ million) and number of nonsovereign technical assistance (and as share of total nonsovereign technical assistance

2016 2017

RegionADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)East Asia 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0Pacific 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0Central and West Asia

2.1 0.2 2.3 18 3 25 0.0 0.0 0.0 0 0 0

South Asia 2.8 1.3 4.1 31 3 25 3.8 0.0 3.8 41 3 33Southeast Asia

0.3 0.5 0.8 6 3 25 0.2 0.0 0.2 2 1 11

Regional 5.7 0.0 5.7 45 3 25 4.6 0.7 5.3 57 5 56Asia and the Pacific (total)

10.9 2.0 12.9 100 12 100 8.6 0.7 9.3 100.0 9 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Table A203-2m: Sovereign Financing Commitments and Cofinanced Funds Mobilized by Sector (Investments), 2016–2017

Monetary value ($ million) and number of sovereign investments (and as share of total sovereign investments)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)Energy 2,089.5 1,496.4 3,585.8 28 21 17 4,053.8 1,516.3 5,570.1 28 22 20

Transport 2,755.7 1,700.8 4,456.4 35 38 30 4,978.2 1,572.1 6,550.2 33 32 29

Water and Other Urban Infrastructure and Services

1,519.7 241.2 1,760.9 14 20 16 1,431.4 89.0 1,520.4 8 14 13

Agriculture, Natural Resources, and Rural Development

888.4 101.8 990.3 8 18 14 1,353.8 283.8 1,637.6 8 14 13

Finance 356.9 3.4 360.3 3 3 2 1,424.7 1,048.2 2,472.9 13 8 7

Education 775.5 669.8 1,445.3 11 12 10 527.8 603.8 1,131.6 6 9 8

Health 20.3 2.5 22.8 0.2 2 2 201.2 17.7 218.8 1 4 4

Public Sector Management

112.7 74.3 186.9 1 8 6 104.0 19.2 123.2 1 3 3

Information and Communication Technology

24.8 22.5 47.3 0.4 1 1 0.0 0.0 0.0 0 0 0

Industry and Trade 42.0 0.0 42.0 0.3 2 2 385.0 5.0 390.0 2 3 3

Total 8,585.5 4,312.5 12,898.0 100 125 100 14,459.8 5,155.0 19,614.8 100 109 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2 171

Table A203-2n: Sovereign Financing Commitments and Cofinanced Funds Mobilized by Sector (Technical Assistance), 2016–2017

Monetary value ($ million) and number of sovereign technical assistance (and as share of total sovereign technical assistance)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)Energy 21.2 27.1 48.3 15 47 16 17.1 19.6 36.7 12 38 13

Transport 25.7 27.6 53.3 17 34 11 30.9 7.9 38.8 13 31 11

Multisector 11.5 23.1 34.5 11 14 5 11.7 0.2 11.9 4 9 3

Water and Other Urban Infrastructure and Services

16.4 19.5 35.9 11 31 10 26.9 17.7 44.6 15 38 13

Agriculture, Natural Resources, and Rural Development

16.4 14.2 30.6 10 39 13 20.7 18.4 39.1 13 35 12

Finance 10.8 7.1 17.8 6 21 7 16.3 21.4 37.7 13 34 12

Education 10.1 4.8 14.9 5 21 7 8.3 2.8 11.1 4 16 5

Health 3.0 5.0 8.0 3 8 3 5.5 3.5 8.9 3 12 4

Public Sector Management

40.6 15.5 56.0 18 69 23 46.1 13.3 59.3 20 69 24

Information and Communication Technology

0.6 0.0 0.6 0.2 1 0.3 1.6 1.0 2.6 1 2 1

Industry and Trade 13.3 1.2 14.5 5 16 5 6.9 2.4 9.3 3 9 3

Total 169.5 144.9 314.4 100 301 100 191.9 108.1 300.0 100 293 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2172

Table A203-2o: Nonsovereign Financing Commitments and Cofinanced Funds Mobilized by Sector (Investments), 2016–2017

Monetary value ($ million) and number of nonsovereign investments (and as share of total nonsovereign investments)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)Energy 515.3 3,270.8 3,786.1 51 6 24 1,487.7 2,568.4 4,056.1 49 13 38

Transport 0.0 0.0 0.0 0 0 0 4.0 0.0 4.0 0 1 3

Water and Other Urban Infrastructure and Services

200.0 200.0 400.0 5 3 12 200.0 100.0 300.0 4 3 9

Agriculture, Natural Resources, and Rural Development

92.6 0.0 92.6 1 2 8 78.1 36.8 115.0 1 3 9

Finance 942.6 2,180.7 3,123.3 42 14 56 474.4 3,240.7 3,715.1 45 13 38

Education 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Health 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Public Sector Management

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Information and Communication Technology

0.0 0.0 0.0 0 0 0 42.5 0.0 42.5 1 1 3

Industry and Trade 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Total 1,750.5 5,651.5 7,402.0 100 25 100 2,286.7 5,946.0 8,232.7 100 34 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Appendix 2 173

Table A203-2p: Nonsovereign Financing Commitments and Cofinanced Funds Mobilized by Sector (Technical Assistance), 2016–2017

Monetary value ($ million) and number of nonsovereign technical assistance (and as share of total nonsovereign technical assistance)

2016 2017

SectorADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)ADB ($)

Cofinance ($)

Total ($)

Share (%)

Number of

Projects Share

(%)Energy 0.1 0.5 0.6 4 2 17 3.0 0.0 3.0 32 2 22

Transport 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Multisector 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Water and Other Urban Infrastructure and Services

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Agriculture, Natural Resources, and Rural Development

0.0 1.3 1.3 10 1 8 0.0 0.0 0.0 0 0 0

Finance 7.1 0.2 7.3 57 6 50 1.6 0.0 1.6 17 3 33

Education 0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Health 0.2 0.0 0.2 2 1 8 0.2 0.0 0.2 2 1 11

Public Sector Management

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Information and Communication Technology

0.0 0.0 0.0 0 0 0 0.0 0.0 0.0 0 0 0

Industry and Trade 3.5 0.0 3.5 27 2 17 3.8 0.7 4.5 48 3 33

Total 10.9 2.0 12.9 100 12 100 8.6 0.7 9.3 100 9 100

0.0 = value is less than half of unit employed.Source: Procurement, Portfolio and Financial Management Department, Asian Development Bank.

Asian Development Bank Sustainability Report 2018Detailed Global Reporting Initiative Content Index

The Asian Development Bank (ADB) has been issuing its Sustainability Report since 2007. The Sustainability Report allows stakeholders to assess ADB’s operational and organizational sustainability performance, providing them with a single point of reference to understand ADB’s commitment to sustainable development. For 2018, this biennial Sustainability Report highlights the integration of sustainability into ADB’s operations and organizational activities during 2016–2017. A separate detailed Global Reporting Initiative (GRI) Content Index sets out ADB’s management approaches to material topics and responses to general and specific disclosures in the GRI Sustainability Reporting Standards. The Sustainability Report and detailed GRI Content Index are prepared in accordance with the core option of the GRI Sustainability Reporting Standards and are available online at www.adb.org/documents/asian-development-bank-sustainability-report-2018.

About the Asian Development Bank

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

ASIAN DEVELOPMENT BANK6 ADB Avenue, Mandaluyong City1550 Metro Manila. Philippineswww.adb.org