What are the EBRD Performance Requirements, now called ESRs?
They are the ten environmental and social requirements an EBRD client commits to meet for the financed project. They sit under the Bank’s Environmental and Social Policy, one of its three good governance policies.
The vocabulary changed recently, and it is the first source of confusion among borrowers:
- the 2019 policy used the term Performance Requirements, abbreviated PR 1 to PR 10;
- the October 2024 policy renamed them Environmental and Social Requirements, or ESRs. The EBRD Board of Directors approved the policy and its ten ESRs in October 2024; they apply to projects started from 1 January 2025.
The numbering stayed the same: ESR 2 is the former PR 2 on labour and working conditions, and so on. The content did evolve. The ESR 2 guidance note explains that the new version, in force since 1 January 2025, gives more protection to self-employed project workers, allows the Bank to request an independent labour assessment where significant labour risks are identified, and strengthens workers’ data protection.
Why should a managing director in Morocco, Tunisia, Egypt or one of the EBRD’s newer sub-Saharan countries of operation care? Because these requirements do not stay in the credit file. They become contractual commitments, monitored throughout the financing, with reports to produce and dated actions. Companies that discover them when the first annual report falls due lose time and credibility with the Bank.
The reference texts are on the EBRD website: the ESR implementation page, with a guidance note for each requirement, and the text of ESR 1.
What does each of the ten ESRs require, in one sentence?
Each ESR covers one risk area. ESR 1 applies to every project; the others apply depending on the risks identified in the environmental and social assessment. The titles below are the official titles of the 2024 policy.
ESR | Official title | What it requires, in one sentence | Evidence an industrial borrower prepares |
|---|---|---|---|
ESR 1 | Assessment and management of environmental and social risks and impacts | Assess the project’s risks and impacts and manage them through an environmental and social management system | E&S policy, risk register, management plan, ESAP, reports |
ESR 2 | Labour and working conditions | Treat workers fairly, including contracted and self-employed workers, and manage labour risks among suppliers | HR policy, labour management procedures, worker grievance mechanism |
ESR 3 | Resource efficiency and pollution prevention and control | Use water, energy and materials efficiently and prevent pollution | Water and energy balances, monitoring of discharges and waste |
ESR 4 | Health, safety and security | Protect the health and safety of workers and neighbouring communities | Risk assessment, accident register, emergency plan |
ESR 5 | Land acquisition, restrictions on land use and involuntary resettlement | Avoid or manage land acquisition and displacement | If relevant: land acquisition or resettlement plan |
ESR 6 | Biodiversity conservation and sustainable management of living natural resources | Protect biodiversity and source living natural resources sustainably | Biodiversity assessment, control of relevant supply chains |
ESR 7 | Indigenous Peoples | Protect the rights and interests of Indigenous Peoples where the project affects them | If relevant: specific assessment and consultation |
ESR 8 | Cultural heritage | Protect cultural heritage affected by the project | If relevant: assessment and chance-find procedure |
ESR 9 | Financial intermediaries | Set the rules a bank or fund applies when on-lending EBRD money | Applies to the intermediary; the sub-borrower receives its requirements |
ESR 10 | Stakeholder engagement | Inform and consult stakeholders and handle their grievances | Engagement plan, external grievance mechanism, log |
If you borrow through a local bank that manages an EBRD credit line, ESR 9 first governs how that bank applies these requirements to its clients. The intermediary screens each sub-project against the EBRD Exclusion List, categorises its risk (low, medium, high or Category A), checks that it mitigates its impacts and meets national requirements on environment, climate, labour, health, safety and gender, agrees corrective action plans with the sub-borrower where needed, and monitors compliance. An ordinary sub-borrower is therefore answerable mainly for national law and for the commitments its bank asks it to sign. A Category A sub-project, however, must meet ESRs 1 to 8 and 10, with an environmental and social impact assessment under ESR 1, and is referred to the EBRD.
What are the E&S management system and the ESAP?
The environmental and social management system (ESMS) is the permanent set-up that keeps you compliant with the ESRs day to day; the ESAP is the dated list of actions needed to reach compliance. The first lasts, the second closes action by action.
The environmental and social management system
ESR 1 requires the client to establish and maintain an integrated ESMS, or equivalent management system, suited to the nature and scale of the project and proportionate to its risks. The system must:
- rest on a policy that sets environmental and social commitments and objectives;
- describe the processes for identifying, assessing, mitigating, monitoring and disclosing risks;
- have resources, a budget and an organisation that defines roles and responsibilities;
- consider third-party risks and collect the indicators and targets needed for reporting.
A company already certified to ISO 14001:2026 or ISO 45001:2018 does not have to start again. It has a policy, a risk analysis, objectives, internal audits and a management review. What is usually missing is the social side beyond health and safety, external stakeholder engagement, the supply chain and the reporting format the Bank expects. Our QHSE and ISO systems page explains how to integrate these elements into an existing system.
Project categories
The EBRD categorises each project by the scale of its potential impacts. A Category A project could have significant impacts that are new and cannot readily be identified or mitigated; it requires a formal, participatory environmental and social impact assessment. Category B projects have impacts that are typically site-specific and readily addressed through mitigation measures. Category C projects have limited impacts. Most plant modernisation projects fall into Category B, but the Bank makes the call.
The environmental and social action plan (ESAP)
An ESAP is required when a project does not meet the ESRs and involves modernising or upgrading existing facilities that do not meet them at the time of approval. The EBRD and the client agree on corrective and preventive actions, mitigation measures, resources and timeframes. The ESAP forms part of the financing agreements.
A well-written ESAP reads like a project plan:
Element | What the Bank expects | Common mistake |
|---|---|---|
Action | A verifiable action linked to a specific ESR | A vague intention (“improve safety”) |
Deliverable | Identifiable evidence (procedure, report, equipment) | No deliverable defined |
Owner | A named function in the company | “Management” |
Deadline | A date or project milestone | An unrealistic deadline accepted to sign quickly |
Resources | A budget or allocated resources | No budget, so no action |
What should environmental and social reporting to the EBRD contain?
It must show, with evidence, that the project complies with the ESRs and that the ESAP is progressing. ESR 1 sets the minimum content of the client’s regular reports to the Bank.
Under ESR 1, these reports cover:
- compliance with the ESRs and implementation of the ESMS, the management plan and the ESAP;
- significant environmental and social risks and impacts;
- relevant performance indicators and targets;
- grievances received from workers and external stakeholders, and how they were resolved;
- the internal or external assurance process used to prepare the report.
The monitoring behind these reports must cover identified risks, ESAP actions, indicators, grievances, regulatory requirements and requests from other parties such as off-takers, other financiers or certification bodies. Based on the results, the client proposes corrective actions for an amended ESAP, to be agreed with the EBRD. Where a company already publishes a sustainability report in line with good international practice, the Bank may, depending on its content, use it for this purpose.
Two obligations sit outside the reporting cycle:
- incidents: the client promptly notifies the EBRD of any incident or accident with, or likely to have, a significant adverse impact, investigates and reports on corrective actions;
- changes: any change in scope, design or operation likely to change the risks must be notified, with additional assessment and an updated ESAP.
For projects with significant risks, the Bank may also require periodic reviews by independent experts. As for frequency, the 2024 policy provides that the EBRD reviews annual environmental and social reports for as long as it has a financial interest in the project; the financing agreement sets the due date and the expected format.
Which mistakes do borrowers make most often?
Most difficulties come from a gap between what was signed and what the organisation can actually deliver. These are the ones we see most often in industrial companies in North Africa.
- Signing an ESAP without costing it. Actions are accepted to secure disbursement, then nobody has the budget or time to deliver them.
- Confusing local compliance with the ESRs. National law is a minimum; the ESRs also refer to good international practice and can go further.
- Writing a report without data. A narrative that asserts compliance, with no indicators, baseline or evidence, does not survive the Bank’s review.
- Forgetting contractors. Contractors’ workers and self-employed workers fall within ESR 2, and an accident at a contractor is still a project accident.
- Keeping no grievance log. Without a documented grievance mechanism for employees and neighbours, point 4 of the reporting and ESR 10 remain empty.
- Reporting a serious incident in the annual report. A serious accident must be notified promptly, not summarised six months later.
- Building a separate system. An E&S management system running alongside the QHSE system doubles the procedures and soon runs out of steam; integrate it into the existing ISO system instead.
How does ACG support EBRD borrowers?
ACG, an EBRD-accredited firm, works at each stage: before signing, to make the ESAP realistic; during the financing, to produce evidence and reports; and day to day, by building the ESRs into the QHSE system. The firm already prepares the environmental and social reporting of a Moroccan manufacturer financed by the Bank.
Our usual approach:
- Gap analysis between your practices and each applicable ESR, based on your documents and a site visit.
- Review or drafting of the ESAP: verifiable actions, owners, deadlines, budget.
- Integration into the existing management system (ISO 9001:2026, ISO 14001:2026, ISO 45001:2018) rather than a parallel one.
- Indicator and evidence dashboard, fed throughout the year.
- Drafting of the environmental and social report and preparation of exchanges with the Bank.
- Team training on labour, health and safety, environment and stakeholder engagement.
Before your next report to the EBRD, check these points:
Packaging makers and exporters financed by the EBRD often have a second regulatory file running in parallel: see our guide to the PPWR for non-EU exporters. For companies without a full-time QHSE manager, outsourcing the QHSE function helps keep these commitments over the life of the loan.