IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Management System
CCLA has an Environmental, Social and Governance (ESG) Policy and an ESG Strategy to manage its E&S risks and impacts in line with local and national regulatory requirements. As per ESAP item #1, CCLA will develop an integrated E&S management system (ESMS), commensurate to the scale and impacts of its activities, and consistent with the IFC PS. The ESMS will apply to site selection, design, construction, and operations and maintenance (O&M) of Project properties, including work executed by contractors.
For prospective sites and for new projects, the Company uses a checklist to identify E&S risks and impacts, then carries out a Phase I environmental site assessment, and prepares E&S permits as required by local regulations, including an environmental impact assessment. CCLA purchases plots of land on a willing buyer willing seller basis. The Company verifies that plots are unoccupied as part of the due diligence process and for the building purchased for renovation, works will only commence once the property is vacant.
Organizational Capacity and Competency
The ESG Strategy is led by the Chief Compliance Officer, with support from a specialist consultancy. The ESG Committee meets on a on a quarterly basis, led by the Managing Director and attended by the Development VP, Operations & Finance VP, Chief Compliance Officer, and HR Manager, among others. The Development VP leads the design and planning of each new property, with support from a specialist consultant for the permit and license process. For each new project, a Construction Management (CM) company is contracted to supervise the construction contractors. The Nomad Living Director of Operations is responsible for overseeing the O&M of tenanted buildings. Each building has its own property manager, maintenance supervisor, receptionist, and security guards. As per ESAP item #2, CCLA will designate an ESMS Coordinator, responsible for the development and maintenance of the integrated ESMS.
Emergency Response Planning
The Company’s civil protection program includes a section dedicated to emergency preparedness and response plans (EPRP) detailing the requirements for construction sites and tenanted properties. The EPRP is based on local civil protection requirements, including the approval of the respective documentation (such as emergency plan, emergency brigades), plus a review of conditions by the authority before a building is tenanted. Tenanted buildings conduct emergency drills once per year, managed by Nomad Living’s staff and contractors. The Company developed emergency scenarios based on a risk analysis, including fire and earthquake practices. Tenanted buildings are required to comply with national and local structural and fire safety codes, and voluntarily utilize international design codes (e.g., the United States of America International Building Code (US-IBC)). CCLA maintains active contracts with specialized companies to perform inspection, testing and maintenance (ITM) of L&FS systems, including emergency power generation systems, in accordance with Mexican regulatory requirements.
Monitoring and Review
At construction sites, the CM Company’s E&S team conducts continuous monitoring, supported by a specialist third party E&S consultancy that conducts weekly audits. Furthermore, CCLA regularly conducts verification visits, and an external project assurance lead visits each project once a month. At tenanted properties, the Nomad Living property manager conducts a twice daily inspection throughout the building and the maintenance team conducts daily checks and preventative maintenance. As part of ESAP item #1 CCLA will develop procedures to monitor compliance with the whole ESMS, including key performance indicators (KPIs) and performance targets for all aspects of E&S, as defined by IFC PS, as well as an audit program to verify compliance with applicable legal requirements and IFC PS.
PS2: Labor and Working Conditions
Human Resources (HR) Policies and Procedures
CCLA has approximately 73 members of staff in Mexico, of which approximately 52% are female. CCLA has HR policies, a model employment contract, a Code of Conduct and Ethics, (https://report.syntrio.com/showPolicyPDF.asp?ID=4020) a Whistleblowing Policy, a Drug and Alcohol Policy, and a Workplace Free of Discrimination and Harassment and Minimum Hiring Age Policy which includes a commitment to equal opportunities. The employment contract defines compensation, work hours, leave and medical benefits. Although there is no documented policy around freedom of association, CCLA recognizes its employees’ freedom of association in line with Mexican labor laws. As per ESAP#3, CCLA will include a clear commitment in its HR policies, referring to its employees’ right to freedom of association.
Gender-based Violence and Harassment (GBVH)
The Code of Conduct and Ethics states that there is zero tolerance for any form of workplace harassment and applies to third party workers. The Company provides periodic training addressing discrimination and harassment, and all new staff members undergo an induction which introduces the code.
Workers Grievance Mechanism
The Code of Conduct and Ethics allows any employee or third-party worker to submit a grievance via a whistleblower channel operated by an independent provider, (https://www.lighthouse-services.com/cclagroup). The channel allows for grievances to be submitted anonymously, as well as a free phone number and email address (reports@lighthouse-services.com) is provided. Complaints can also be submitted directly to the compliance department be email (compliance@cclagroup.com) or via the Company’s general contact page (https://cclagroup.com/contact/). Furthermore, the Workplace Free of Discrimination and Harassment Policy states that infringements may also be reported to the direct supervisor, the supervisor’s supervisor, the head of the department, the HR department, or the general management.
As part of ESAP item #3, the procedure for the management of grievances included in the Whistleblowing Policy will be updated in line with IFC PS 2 to define how grievances are addressed promptly, and that feedback to those concerned is provided in a timely manner. CCLA will share the updated Whistleblowing Policy with all workers, including construction site workers and Nomad Living contractors.
Supply Chain
The Company’s ESG strategy includes supply chain screening and a commitment to eliminate child labor. As part of ESAP item #1, CCLA will update the Code of Conduct and Ethics to explicitly prohibit the use of both child labor and forced labor in the supply chain. All suppliers will be required to comply with the updated code.
Occupational Health and Safety (OHS)
CCLA manages OHS in line with applicable legislation’s requirements. As part of ESAP item #1, the ESMS will include OHS management, with OHS practices that comply with the IFC PS, applicable to the Company’s construction and O&M activities.
Workers Engaged by Third Parties
CCLA contracts with several contractors for each construction project, all of which are managed and supervised by a CM company. Companies bidding for contracts are required to comply with CCLA’s Code of Ethics and Conduct and to have a social security “certificate of good standing”. Contractors are also required to comply with the OHS requirements established in the project’s Civil Protection Plan, (prepared by the CM company and authorized by the municipality).
As per ESAP item #4, CCLA will develop a Construction Contractor E&S Management Procedure, to be implemented by the CM company, detailing (i) the minimum environmental, OHS, labor, GBVH, grievance mechanism, and social requirements for construction contractors in alignment with the IFC PS and the WBG General EHS Guideline sections on “Occupational Health and Safety”, “Community Health and Safety” and “Construction and Decommissioning”; (ii) a contractor management and assurance plan codifying the controls to be implemented to verify compliance with the minimum requirements (e.g. inspections, audits, walk-downs, E&S meetings, and periodic labor law due diligence); (iii) a corrective and preventive actions management procedure to record and track the E&S performance of contractors, including monitoring KPIs.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency
Electricity is provided by the Federal Electricity Commission, supported in some cases by rooftop solar panels. Energy efficiency measures employed in some developments include reflective paint on windows to reduce air conditioning demand, as well as centralized hot water and air conditioning systems. Water is supplied by the municipal network. A guide is issued to tenants on how to be water and energy efficient and the Company carries out periodic awareness campaigns about resource efficiency.
Pollution Prevention
Upon project's completion, greenhouse gas emissions are expected to be less than 25,000 ton carbon dioxide gas equivalent per year. Domestic wastewater from construction works is collected and transported by an authorized third party. For tenanted buildings, wastewater is connected to the municipal sewage system, and in some cases an on-site pre-treatment unit is installed. In such cases, a qualified third party carries out periodic sampling of the wastewater treatment unit to verify compliance with the municipality’s maximum permissible limits. Solids are removed periodically by an authorized third party and the treated wastewater is reused for onsite irrigation. As part of ESAP item #1 CCLA will develop a procedure for land application of treated wastewater in line with the World Bank Group (WBG) Environmental, Health, and Safety (EHS) Guidelines for Water and Sanitation section on “Liquid Effluents”, and applicable legal requirements.
Wastes, Hazardous Materials Management
Construction sites also generate wood, metal, plastic, and general construction waste, as well as waste oil, oil filters, oily rag, used paint, spent personal protective equipment, and small amounts of medical waste from first aid etc. Waste management is carried out by the construction contractors in accordance with the site’s waste management plan, as per local and national legislation. Waste is collected and disposed of by authorized third parties. Similarly, each tenanted building has its own waste management plan. Construction sites and tenanted buildings manage and store hazardous materials as per their classification in accordance with applicable legislation and manufacturer recommendations. As part of ESAP item #1 CCLA will update its procedures for the handling and managing hazardous materials in line with the IFC PSs and the WBG General EHS Guidelines section on “Chemical Hazards”
PS4: Community Health, Safety and Security
Community Health and Safety Management
When planning a construction project, CCLA and the CM company discuss community health and safety risks and impacts, including traffic related matters. The CM company then develops a construction plan which is the basis of the authorized Constriction Permit. Signs and personnel are placed at the entrances and exits to control the flow of vehicles and protection is installed to prevent objects dropping onto neighboring properties / public spaces. As part of ESAP item #4 CCLA will develop a Construction Contractor E&S Management Procedure, to be implemented by the CM company, which will include measures to assess and manage GBVH risk.
For tenanted properties, the safety of tenants is managed in accordance with the buildings’ Civil Protection Plan. CCLA includes design features to facilitate tenant safety, including safety signage, adequate street lighting at entrances, secure internal spaces for exercising / dogs, key card only access to communal areas, and security at main entrances. As part of ESAP item #1 CCLA will include health, safety, environmental, security and GBVH risks as part of the pre-operations punch list, to systematically identify and resolve risks to tenants before tenanting each building.
Life and Fire Safety
CCLA’s buildings are generally accessible to the public in the lower commercial portion, while only Company personnel and tenants have access to the residential levels. The Company complies with national and local structural and fire safety codes for the design of all facilities, particularly the fire code of the respective location (e.g., the Construction Regulations for Mexico City) and the US-IBC code). When CCLA designs the buildings, it includes; (i) access to the fire department and first responders; (ii) the fire protection systems (i.e. water tanks and fire pump system, hose reel systems, and interconnection with each commercial tenants); and (iii) fire detection and alarm systems. Fire detection is provided in every apartment, commercial unit, and common areas. In addition, in Mexico City, each building’s earthquake alarm is connected to the national seismic alarm system, and carparks are equipped with carbon monoxide detectors which trigger ventilation systems if activated.
The Company contracts an independent L&FS specialist to carry out detailed reviews and audits of each property from the design stage onwards. In addition, every building is audited at least once a year by Nomad Living and local civil protection authorities, which includes a review of L&FS conditions and emergency preparation. As part of commissioning new buildings, the Company obtains a third-party certification of the building’s materials, structure, and L&FS systems.
Tenants are informed of the L&FS rules via the tenancy contract and welcome pack, including the no smoking policy and the requirement not to tamper with L&FS equipment. When Nomad Living is invited into an apartment to conduct maintenance, they also carry out inspections of the smoke detectors to identify any signs of damage or tampering. Each year, all tenants are invited to participate in a building evacuation exercise. Dedicated muster points inside and outside the building are designated for use in the event of an earthquake, in accordance with the building’s Civil Protection Plan.
As per ESAP item #5, CCLA will develop a standard L&FS Design Manual (Master Plan) that will include the accessibility features for the residential buildings. This L&FS Design Manual will include the minimum requirements for all residential buildings, regardless of the state/region of the country.
Security Management
CCLA contracts unarmed third-party security services to control access to the properties it owns. As per ESAP item #6 CCLA will develop a Security Policy applicable to plots of land, construction sites and tenanted buildings, aligned with PS4, requiring the assessment of risks posed by the security arrangements, and defining the minimum requirements in relation to hiring, rules of conduct, training, equipping, and monitoring of such workers.
