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.
Performance Standard 1: Assessment and Management of Environmental & Social Risks
Environmental and Social Policy and Management Systems (ESMS): Arc Ride has established foundational ESMS elements such as policies on environment and social matters, Occupational Health and Safety (OHS) procedures, waste management, emergency response, a supplier code of conduct, worker grievance channels, and incident reporting. However, these remain standalone and do not fulfill IFC PS1 requirements for integrated risk management across sites and with contractors. Key processes including stakeholder engagement, contractor management, hazardous waste control, monitoring, and document control still need consolidation. To close this gap, Arc Ride expects to create a unified, group-level ESMS to define consistent policy, roles, procedures, and monitoring for all operations and contractors (ESAP #1).
Identification of Risks and Impacts: Arc Ride currently assesses E&S risks using site inspections, ESG audits, fire-safety checks, and incident reviews. This does not fully meet IFC PS1 standards for continuous and systematic risk management. Since operations are on leased premises, EIAs are not automatically required under Kenya’s Environmental Management and Coordination Act (EMCA); however, Arc Ride plans to conduct legal screening for expansion projects and carry out EIAs if needed, including public disclosure. To improve PS1 alignment, Arc Ride will develop standard E&S screening tools for new locations, sites, and higher-risk suppliers as part of its ESMS and in compliance with respective local regulations (ESAP #2).
Organizational Capacity: Arc Ride’s E&S responsibilities are led by an ESG Lead supported by two ESG Assistants, working with operations teams across sites. Roles and reporting lines are in place, but formal site level E&S focal points and contractor/supplier E&S oversight are still being strengthened. Staff currently receive targeted (not yet fully comprehensive) training in OHS, GBVH/SEAH, battery handling, and emergency response. To align with PS1 requirements, Arc Ride is required to formalize ESMS roles and competencies, establish structured corporate EHS training, and implement regular management review processes.
Emergency Preparedness and Response (EPRP): Arc Ride has basic safety measures at its sites, including battery-temperature sensors, automatic shutoffs, ventilation systems, firefighting equipment, and established procedures to manage power failures affecting charging or swapping equipment, including communication protocols that notify riders when sites go offline and when services resume. While these measures provide a foundation for emergency management, the company has not yet clearly assigned or trained specific emergency roles such as designated emergency leads or fire marshals, or defined expectations for visitors or third parties during an incident. Existing procedures also do not yet comprehensively cover all potential emergency scenarios that may occur at Arc Ride’s facilities, such as battery overheating or fires, hazardous waste handling incidents, or other technical failures beyond power outages. To align with IFC requirements, Arc Ride will prepare site-specific emergency plans, formally assign and train emergency roles, and maintain records of drills, equipment checks, and corrective actions as part of broader ESMS enhancements under ESAP?#1.
EHS Management Programs: Arc Ride currently implements basic EHS activities such as hazardous-waste handling, monitoring electricity usage, and tracking road-safety incidents. These are not yet standardized across all locations, and procedures for elements like hazardous-waste custody and resource-efficiency indicators remain unclear. Training for technical roles (such as battery laboratory work, cabinet maintenance, and hazardous-waste handling) also requires consolidation into a unified EHS plan with set objectives, schedules, and documentation. To resolve these issues, Arc Ride is required to formalize company-wide EHS programs and define consistent KPIs and targeted training requirements within ESMS.
E&S Monitoring and Review: Arc Ride already collects valuable operational data through its Internet of Things (IoT) system monitoring battery temperature alerts and technical performance. However, these different sources of information are not yet consolidated into a single, structured E&S monitoring system, and key indicators such as environmental performance, hazardous and e-waste data, audit findings, resource efficiency metrics, and contractor performance are not routinely compiled or reviewed together. To close this gap, Arc Ride is required to develop a monthly E&S dashboard that captures all relevant indicators from across its sites and operations. This dashboard can support regular management review and corrective actions as part of the ESMS (ESAP #1).
Supply Chain and Contractor Management: Arc Ride conducts installation and maintenance of its charging infrastructure in house and therefore does not currently contract external service providers for these activities. Nevertheless, the company does rely on a range of third party suppliers for batteries, electronic components and certain ancillary services, which present varying levels of environmental and social (E&S) risk. While Arc Ride has taken initial steps to screen suppliers and manage product quality, it does not yet have a fully formalized or consistent approach to assessing and managing E&S risks across its supplier base, nor are E&S expectations yet embedded in procurement processes or supported by systematic performance monitoring. To strengthen alignment with PS1, PS2 and PS3, Arc Ride will develop and implement a Contractor and Supplier E&S Management Framework that sets out risk based screening procedures, E&S requirements for suppliers, contractual provisions, and monitoring obligation (ESAP #1).
Performance Standard 2: Labor and Working Conditions
Arc Ride employs approximately 130 staff: 54 women and 76 men across its operations in Kenya.
Labour Contracting Practices: Arc Ride provides written contracts and an Employee Handbook covering key workplace policies for all employees. Most staff have 12-month renewable contracts, which comply with legal requirements but may cause uncertainty about long-term job security and benefits, potentially raising IFC PS2 concerns. Arc Ride is required to review its practices to identify roles needing longer-term or permanent contracts and to develop clear guidelines on contract renewals, benefit eligibility, and protection against unfair dismissal, following IFC PS 2. (ESAP #4).
Workers’ Organization: Arc Ride affirms workers’ rights to freedom of association and collective representation, as reflected in its HR policies. However, no worker committee or consultative body is currently active. To meet PS2 requirements, Arc Ride is required to publish a plain language Freedom of Association (FOA) statement, integrate it into HR policies and induction processes, facilitate the establishment of a worker committee with clear terms of reference, regular meetings, documentation procedures, and representative participation across job categories, and guarantee non retaliation for worker representatives (ESAP #5).
Occupational Health and Safety (OHS): Arc Ride currently implements basic OHS measures, such as safety inductions, Personal Protective Equipment (PPE) use, periodic training, and incident reporting. However, a formal company-wide OHS program is lacking, and practices like job-specific training, regular inspections, trend analysis, and updated procedures for high-risk tasks are applied inconsistently. To resolve these issues, Arc Ride is required to establish a structured OHS program with targeted training, enhanced incident and near-miss reporting, preventive maintenance, and regularly updated Standard Operating Procedures (SOPs) for high-risk activities.
Gender-Based Violence (GBV) and Sexual Exploitation, Abuse and Harassment (SEAH): Due to risks in Kenya’s urban mobility sector, particularly for women, Arc Ride enforces sexual harassment policies, offers awareness training, and provides anonymous reporting. The company is required to assess GBV/SEAH risks, update its policy to cover all stakeholders, and roll out an action plan with gender-balanced focal points, confidential survivor-centered reporting, disciplinary measures, safe-work protocols, targeted staff training, and case management (ESAP #6).
Worker Grievance Redress Mechanisms (GRM): Arc Ride has an established worker GRM with multiple internal and external reporting channels, including an anonymous digital platform accessible to staff and contractors. However, the current system does not yet include dedicated procedures and focal points for handling GBV/SEAH related complaints, which require confidential survivor sensitive pathways under PS2. To address this gap, Arc Ride is required to strengthen its GRM by introducing clear response timelines, grievance categorization, dedicated GBV/SEAH reporting channels with trained focal points, and regular sharing of anonymized grievance summaries to support transparency and trust.
Contractors and Third Party Labor: With anticipated increased reliance on contractors for installation, maintenance, logistics, transport, and landlord provided services, existing contractor OHS provisions are insufficient. Arc Ride is required to implement a Contractor and Supplier E&S Management Framework specifying minimum OHS requirements, GBV/SEAH codes of conduct, child labor, site induction processes, supervision expectations, incident reporting procedures, and performance monitoring supported by enforceable contractual clauses and corrective actions for non compliance.
Supply Chain and Human Rights: Arc Ride sources parts (batteries, electronics, and other components) from various suppliers and relies on local services for assembly. Although a Supplier Code of Conduct exists, due diligence and monitoring of suppliers are not yet formalized, and E&S standards like child labor and human rights are inconsistently applied in procurement. Arc Ride is required to create a risk-based supplier due diligence framework with clearer E&S requirements, screening, follow-up, and regular assessments for IFC PS 2 compliance.
Performance Standard 3: Resource Efficiency and Pollution Prevention
Energy and Resource Efficiency: Arc Ride already tracks electricity use and battery performance through digital systems, and some sites use or are assessing hybrid solar options. However, resource efficiency monitoring is not yet standardized across all facilities, and performance indicators such as electricity per swap or site level energy and water intensity are not consistently measured or reviewed. Arc Ride is required to develop uniform resource efficiency metrics and integrate them into the ESMS and E&S dashboard.
Water Management: Arc Ride relies on municipal water supply with limited consumption needs. But systematic monitoring of water use such as meter readings, consumption trends, and leak detection is not yet formalized. To address this, the company expects to maintain a water-use register and incorporate water-use checks into quarterly site inspections.
Packaging Waste and Recyclables: Routine packaging waste (e.g., cartons, paper, plastics) is generated during operations. Current waste segregation and tracking practices vary by site, resulting in inconsistent documentation. Arc Ride is required to apply standardized segregation procedures and maintain monthly waste logs at all sites.
E Waste Management: Arc Ride separates and stores electronic waste and uses licensed handlers for disposal. However, site-level tracking and consolidated reporting are not yet consistent, and documentation is not always integrated into corporate monitoring. Arc Ride expects to strengthen documentation and ensure e waste records are captured on the E&S dashboard.
Hazardous Waste and Chemicals: Damaged battery cells and laboratory chemicals are isolated and transferred to licensed hazardous waste handlers. However, a full chain of custody system including batch identification, storage logs, transport documentation, and disposal verification is not yet fully implemented. Arc Ride aims at establishing a complete chain of custody system and periodically verify contractor compliance (ESAP #7).
Pollution Prevention, Spill Control, and Fire Safety: Arc Ride’s hubs and cabinet sites already use engineering controls such as thermal monitoring, automated shut offs, ventilation, and localized fire suppression to manage operational risks. However, documentation of these systems and routine inspection protocols are not yet standardized across sites, including fire safety files and drill records. Arc Ride expects to implement a standard Life & Fire Safety evidence pack for all facilities, including inventories, maintenance and testing logs, evacuation plans, drill records, and corrective action tracking.
Performance Standard 4: Community Health, Safety and Security
Arc Ride interacts with the public through rider mobility, roadside maintenance, and battery-swapping cabinets in accessible locations.
Road Safety: Arc Ride’s operations involve both its own staff and riders who use electric two wheelers for transport and deliveries. The company tracks road safety incidents and provides some safe riding training. However, road safety management is not yet structured into a formal program covering both employees and rider clients, with clear indicators, standardized investigations, and routine training cycles, as required under PS4. Arc Ride is required to establish a Road Safety Management Program with measurable indicators, regular safe riding training for riders and staff, documented incident investigations, and integration of road safety data into the monthly E&S dashboard (ESAP?#8).
Battery Safety: Swap cabinets are equipped with temperature sensors, automatic lockouts, ventilation, and localized fire suppression, and faulty batteries are isolated until collected by the maintenance team. The remaining gap is the lack of standardized on site safety communication and consistent procedures for managing alarms and cabinet shutdowns. Arc Ride is required to introduce uniform risk-communication measures at hubs and cabinets, apply standard procedures for thermal alarm response, and record thermal lockout events to inform cabinet placement and ventilation improvements.
Fire, Electrical, and Site Safety: Fire safety systems are in place at warehouses and hubs, including extinguishers and alarms. However, documentation, inspections, and electrical-safety checks are not yet consistently standardized across all facilities. To meet PS4 and PS2, Arc Ride is required to adopt a standardized Life & Fire Safety evidence including monthly fire equipment inspections, evacuation maps, drill records, maintenance logs, and annual electrical reviews for higher load areas.
Security Personnel Management: Security services are generally provided by landlords and vary by location. There is currently no unified approach to assessing security risks or ensuring that contracted guards follow IFC PS4 requirements. Arc Ride is required to implement a site wide security management approach, including basic risk assessments, due diligence checks, codes of conduct aligned with proportionality and non discrimination, and channels for reporting complaints through the GRM.
Emergency Preparedness at Sites: While Arc Ride coordinates with landlords on site safety, formal procedures for communicating site based emergencies to nearby businesses or authorities are not yet fully developed. Arc Ride is required to adopt a site-level emergency communication protocol, including updated contact lists and templates for rapid notification at locations with higher operational risks.
