Perspectives · Impact & Governance
Project Funders Already Require Impact Management
On 1 January 2026, the Asian Development Bank's new Environmental and Social Framework took effect for new projects.1 It replaced the Safeguard Policy Statement that had governed ADB lending since 2009. The framework sets ten mandatory standards for the borrowers and clients who carry out ADB-financed projects, and those standards govern how they manage the environmental and social risks and impacts of their work.
ADB is one of ten development finance institutions whose requirements I reviewed for this article. All ten require impact assessment and management on the projects they finance. In nine of them, the requirement falls on the borrower or client, the organization that runs the project. That makes it project delivery work, done by project teams.
Whether the project profession is ready for impact management has already been decided by the institutions that pay for projects. They require it. What remains open is whether project professionals will do this work themselves or leave it to specialists outside the delivery team.
What the funders require
The requirements follow one pattern. The borrower assesses the project's environmental and social impacts before approval, prepares a plan to manage them, and monitors that plan through implementation. The table lists the instrument each institution uses.
| Institution | Instrument | What the project must do |
|---|---|---|
| African Development Bank | Integrated Safeguards System, Operational Safeguard 1 (updated 2023, in force May 2024) | Borrowers consider direct, indirect, contextual, and cumulative risks and impacts, including vulnerability to climate change |
| Asian Development Bank | Environmental and Social Framework (approved November 2024, effective January 2026) | Ten mandatory standards for borrowers and clients, applied through a risk-based, adaptive management approach |
| Asian Infrastructure Investment Bank | Environmental and Social Framework, ESS 1 | Clients identify and manage environmental and social risks and impacts, and bring them into project decisions |
| European Bank for Reconstruction and Development | Environmental and Social Policy, ESR 1 (October 2024) | Minimum requirements for managing environmental and social impacts and risks throughout the life of the project |
| European Investment Bank | Environmental and Social Standards, Standard 1 (2022) | Promoters assess environmental, climate, and social impacts and risks, then manage and monitor them through the project cycle |
| Inter-American Development Bank | Environmental and Social Policy Framework, ESPS 1 (effective November 2021) | Borrowers assess and manage risks and impacts through a plan, do, check, act management system |
| IDB Invest | Impact Management Framework | The bank scores expected impact before investing and runs a mandatory final evaluation of expected against actual impact |
| International Finance Corporation | Performance Standard 1 (2012) | Clients identify impacts, risks, and opportunities and manage environmental and social performance throughout the life of the project |
| New Development Bank | Environment and Social Framework, ESS 1 (2016) | Environmental and social assessment and management plans for financed projects |
| World Bank | Environmental and Social Framework, ESS 1 (approved 2016) | Borrowers assess, manage, and monitor environmental and social risks and impacts at each stage of the project |
Most of these frameworks apply a mitigation hierarchy. The World Bank's standards, for example, require borrowers to avoid, minimize, and mitigate adverse impacts, and to compensate for them where that is not possible.2
The same institutions build impact into how project money is spent. The African Development Bank's 2015 procurement policy names impact beside complexity and risk as a factor that decides how far a procurement approach is customized, and it judges value for money over the economic life of what is bought.3 The Asian Development Bank's procurement policy requires each procurement plan to show how it supports the project's economic, environmental, and social objectives under a risk-managed approach.4 The Inter-American Development Bank groups its sustainable procurement criteria into social, environmental, and economic categories.5
For investors, the IFC's Operating Principles for Impact Management set out the full cycle in nine principles: assess expected impact before investing, manage negative impacts, monitor against expectations, compare expected with actual impact, and verify the system independently.6
This is project work
In my own field, which is the governance of projects, risk and impact are two different things. A risk is an uncertain event that would affect the project's objectives. An impact is an effect the project has on people, the environment, or the economy, whether or not it is certain and whether or not it threatens those objectives. The IFC's principles define impact as positive or negative, primary and secondary effects, direct or indirect, intended or unintended.6
Project teams already manage risk. PMI's 2024 study Maximizing Project Success found that 81 percent of projects monitor risk.7 The funders now require the same discipline for impact, and every step they require sits inside delivery: the baseline at initiation; the impact assessment in the business case and design; mitigation in scope, contracts, and procurement criteria; monitoring in the reporting cycle; and handover, which decides whether the impact lasts after the team leaves.
When the people who control scope, schedule, and procurement cannot read an impact management plan, the plan depends on someone outside the delivery team to enforce it. Its commitments then compete with the schedule. When they lose, the cost falls on the people and places the plan was written to protect.
When the people who control scope, schedule, and procurement cannot read an impact management plan, the plan depends on someone outside the delivery team to enforce it.
What PMI's research shows
Maximizing Project Success asked what predicts whether a project delivered value worth its effort and expense, using nearly 10,000 survey responses.7 The report scores success with the Net Project Success Score (NPSS): the share of projects rated successful minus the share rated failures, which is 36 globally. Of 21 performance themes tested, sustainability and social impact ranked first, with an index of 257 against an average of 100.
Projects that delivered a social good benefit scored an NPSS between 45 and 61, depending on the benefit. Projects with no social benefit scored 23. When a project did not deliver on sustainability or social impact, its intended beneficiaries rated it 21; when it did, they rated it 55.
The same study shows how thin the practice is. Only 22 percent of projects were aligned with social impact. The study also measured reported alignment and perceived success, so it does not show how much impact those projects produced. Its strongest lever points to what is missing: projects with a well-established measurement system scored an NPSS of 43, against 6 for projects without one. The banks close the same gap with baselines, monitoring, and a comparison of expected and actual results.
The method exists
I am not a neutral observer here. I wrote the P5 Standard, and it is now published by PMI GPM Sustainability JV, LLC, the joint venture between PMI and GPM.
The P5 Standard has been in use for more than 15 years and is available in 12 languages. Version 4.0, The PMI® GPM® P5™ Standard for Sustainability in Project Management, was published in April 2026 and is aligned with the PMBOK® Guide, Eighth Edition.8
Its structure matches what the funders ask for. P5 organizes impacts into People, Planet, and Prosperity, the social, environmental, and economic dimensions the banks assess. It examines them from two perspectives: the product the project delivers, through lenses for lifespan and servicing, and the process used to deliver it, through lenses for efficiency, effectiveness, and fairness. The product lenses carry the assessment past handover, into the life cycle the funders require projects to consider.
P5 grounds every impact assessment in a documented baseline. The P5 Impact Analysis decides which impacts are significant, using magnitude, likelihood, and proximity to defined thresholds, and Version 4.0 adds a 1 to 5 impact scoring model with escalation triggers. The Sustainability Management Plan carries the responses into delivery. These are the instruments the banks require under other names: an impact assessment, a management plan, and monitoring against a baseline.
P5 also goes past the mitigation hierarchy. It places responses on a continuum from mitigation, to restoration of the documented baseline, to regeneration, which it defines as measurable enhancement of system capacity beyond baseline conditions.
P5 does not replace any funder's standards. A borrower still has to meet its funder's specific requirements, and P5 states that its mappings to external frameworks do not mean it satisfies reporting obligations under them. What P5 gives a project team is a structure for doing this work inside delivery, with the same discipline the team already applies to risk.
The funders require an assessment, a plan, and monitoring. They do not say who on the project team has the authority to act when monitoring shows that a threshold has been crossed. Each organization that accepts the financing has to decide that.
About the author
Dr. Joel Carboni is the founder and president of GPM and the architect of the standards, methods, and certifications behind Sustainable Project Management®, delivered through the PMI-GPM joint venture. He created the P5 Standard, the Sustainability Competence Standard, the Sustainable Project Management® Practice Guide, the Project Sustainability Reporting Guide and the PMI GPM Guide to Responsible Project Sponsorship. For over 30 years, his work has moved the profession in a different direction. A Forbes Business Council member and Global Reporting Initiative (GRI) contributor, he was shortlisted for Thinkers50's inaugural regenerative business award in 2025 for his book 'Becoming Regenerative'.
Sources
1 Asian Development Bank (2024). Environmental and Social Framework. adb.org
2 World Bank. Environmental and Social Framework, Environmental and Social Standards overview. worldbank.org
3 African Development Bank (2015). Procurement Policy for Bank Group Funded Operations. afdb.org
4 Asian Development Bank (2017). ADB Procurement Policy: Goods, Works, Nonconsulting and Consulting Services. adb.org
5 Inter-American Development Bank (2025). IDB Project Procurement (briefing presentation), summarizing policies GN-2349-15 and GN-2350-15.
6 International Finance Corporation (2019). Investing for Impact: Operating Principles for Impact Management. impactprinciples.org
7 Project Management Institute (2024). Maximizing Project Success. pmi.org
8 PMI GPM Sustainability JV, LLC (2026). The PMI® GPM® P5™ Standard for Sustainability in Project Management, Version 4.0.
Environmental and social frameworks of the ten institutions are linked in the table above.