Procedure for Environmental and Social Due Diligence in the Renewable Energy Industry
The process of environmental and social due diligence in the renewable energy industry is given
below. Follow the step-by-step structure required for ESDD in the renewable energy industry:
Step 1: Preliminary Screening & Scoping
The first step is to implement the ESDD in the renewable energy industry. It starts with the
classification of the project under the EIA Notification (Category A/B). Also, it identifies the
relevant regulations.
A site assessment clarifies whether the project’s location is favourable or not. It must not be
in sensitive areas, forests, coastal zones, or tribal regions that may affect proceedings for the
project. It takes 10 days to 20 days for completion, helping to define the Terms of Reference (ToR)
for the full study.
Step 2: Baseline Data Collection
The environmental data for the project covers the following:
- Air quality
- Water contamination levels
- Soil’s fertility or condition
- Weather information
- Biodiversity near the project’s area
It also covers social surveys of:
- Local communities
- Livelihoods
- Cultural heritage
- Vulnerable groups
It takes 3 to 6 months for standard projects and 24 months for migratory-species-based projects to
get completed.
Step 3: Environmental Impact Assessment Data
Experts collect the data that shows environmental impacts in the project's construction, operation,
and closure.
They also assess,
- The cumulative impacts from nearby or planned projects.
- The climate risks include performance under a 2-degree Celsius warming scenario.
Step 4: Social Impact Assessment
In this step, the project’s impact on individuals’ lives is assessed:
- Livelihood loss
- Indigenous rights
- Gender impacts
- Cultural heritage
- Land acquisition practices
- Displacement (10,000 to 15000 families affected annually) in the renewable sector)
Step 5: Stakeholder Engagement & Public Consultation
Engagement with stakeholders includes:
- Public hearings with a mandatory 30-day consultation period
- At least 4 to 6 stakeholder meetings
- Gram panchayat consultations
- Written feedback collection
All concerns must be formally addressed and submitted to the SEIAA body.
Step 6: Gap Analysis & Risk Rating
The project is compared against key standards, including:
- Indian regulations
- Equator Principles
- RBI Guidelines
- ADB Safeguard Policy
- IFC Performance Standards
Gaps are classified as High, Medium, or Low risk, and then corrective action is taken.
Step 7: Plan to Manage Risks
Plans for risk mitigation are designed to cover:
- Environmental Management Plan (EMP)
- Resettlement & Rehabilitation Plan
- Biodiversity Offset Plan (if required)
- Environmental & Social Action Plan (ESAP)
Step 8: Regulatory Submission & Clearance
EIA, EMP, and SIA, all along with essential documents, are submitted to:
- MoEFCC for Category A projects
- SEIAA for Category B projects
The expert appraisal committee (EAC) reviews the proposal and asks for additional information or
revisions.
Step 9: Lender Review and Approval
Projects that secure international funding require an ESDD report review, especially for Category A
projects. The conditions are included in the ESAP. The project funding depends on ESDD approval for
financing from ADB, IFC, Equator Principles banks, or Green Bonds.
Step 10: Implementation and Monitoring
ESDD approval is obtained. Next, the EMP and ESAP are implemented during the operations and
construction procedures.
For monitoring, it includes:
- Third-party audits are conducted quarterly or annually
- RBI-mandated quarterly environmental stress tests for large green portfolios
- Increasing use of real-time monitoring tools like GPS tracking and drones in sensitive areas.
