34026 - Lamoda Russia

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Environmental & Social Review Summary

Project Number

34026

Company Name

Lamoda GmbH

Date ESRS Disclosed

Jul 8, 2013

Country

Russian Federation

Region

Europe

Last Updated Date

Jul 28, 2017

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Sep 11, 2013
Signed : Dec 30, 2013
Invested : Jan 20, 2014

Sector

Content (B2C Companies)

Industry

Tourism, Retail and Property

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

BF has launched through subsidiaries online retailing ventures in South America, the Commonwealth of Independent States and Asia (India). BF was initiated by Rocket Internet GmbH (“RI”), a global online venture builder. IFC is considering investing in Lamoda, an online retailing venture incubated and supported by BF and operating in Russia and Kazakhstan, as well as possibly expanding into other CIS countries. The main products types offered by Lamoda are apparel and footwear.

Overview of IFC's Scope of Review

The project described under this environmental and social review summary (“ ESRS”) is related to project 33609 which was publically disclosed on June 17 2013 under its former name “Rocket Internet”. The previous ESRS for Rocket Internet described IFC’s proposed investment into two companies: Dafiti Latam GmbH & Co. Beteiligungs KG (“Dafiti”) operating in Latin America and Lamoda GmbH (“Lamoda”) operating in Russia and Kazakhstan. The following ESRS relates to IFC’s potential investment in Lamoda only. The proposed investment in Dafiti is now covered in an update to the ESRS for project 33609.

IFC’s review of this proposed investment consisted of appraising technical, environmental, health and safety (EHS) and social related information submitted by Bigfoot GmbH (“BF”) and Lamoda in Russia including: group business details and future plans, policies and procedures on environmental health and safety (EHS), human resources (HR), supplier sustainability assurance, and product safety standards; organizational charts; regulatory permits, environment monitoring reports, etc. The review also included visits to the operations of Lamoda and telephone interviews with senior staff of BF.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFC's investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards.

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key environmental and social (E&S) issues associated with this Project include: development and implementation of EHS management systems at corporate and company level, health and safety; assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and relevant Performance Standards; resource efficiency of the operations (mainly energy efficiency); and management of sustainability issues in the supply chain of products sold by the company.

Considering that the main activity of the company is internet retailing and delivery through its warehouse and offices, no significant impacts are expected related to the other Performance Standards.

Environmental and Social Mitigation Measures

Lamoda has around 1,200 employees, working in the warehouse, administrative support and in Lamoda Express, a next-day courier service used to deliver products sold.

Human Resource Policies and Procedures: Lamoda’s HR department has documented procedures including, hiring, selection, leave policy, disciplinary measures, transfer of employees, payment of benefits, among others. Lamoda is subject to regular inspection by Russian government officials.

Working conditions and terms of employment: Lamoda has standardized employment conditions, with written contracts of employment for each employee. These contracts describe the working conditions, terms of employment and benefits provided, including probation period, wage calculation, leaves etc. , meeting the legal requirements in the countries of operation.

Non-discrimination and Equal Opportunity: Lamoda has documented policies on non-discrimination and equal opportunity. No instances of discrimination were noted.

Freedom of Association: Lamoda is currently not engaged in any collective agreements, though it places no restriction on employees’ union membership.

Protection of workforce: The minimum age of any employee at Lamoda is 18.

Grievance mechanism: At Lamoda the HR team maintains a box where employees can drop-in suggestions, complaints, ideas which are then discussed in 1 on 1 meetings with senior HR personnel. Also there is an email address hrmailto:-line@lamoda.ru which serves the same purpose. The company published a guideline on the grievance process in its HR section in the intranet. On top of that there are regular staff surveys with feedback loop to senior management acting as grievance prevention mechanism.

Occupational Health and Safety (OHS): Lamoda operates in a modern Class A warehouse, and gives considerable attention to worker safety, providing protective clothing as needed.

Fire safety and emergency response: Lamoda has firefighting equipment in place; the company has trained fire response teams including at the logistics center. The facilities are designed in accordance with the recommendations of the local Fire Protection Regulations. All buildings also have fire prevention and fire fighting projects designs which are approved by the Fire Authority and have the required permits from the local office of the fire department. All buildings were noted to have emergency routes and exits, fire extinguishers, hydrants, smoke detectors, alarms and sprinklers, as appropriate. Sprinklers are designed according the building fire load, number of floors, number of people and existing emergency exits.

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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Environmental & Social Review Summary

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Environmental and Social Mitigation Measures

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PS 2: Labor and Working Conditions

PS 3: Resource Efficiency and Pollution Prevention

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