An ESG-Centered Evaluation Scheme for ODA Projects

This study proposes an ESG-centered evaluation scheme for ODA projects. As of 2022, KOICA’s ODA evaluation indicators determine the success of the ODA project in terms of the donor country’s perspective. This implies a need to reorganize the evaluation indicators to include the recipient country’s perspective. In other words, the process and results of the ODA project should also be evaluated in terms of the recipient country’s environmental, social, and governance (ESG) conditions. As illustrated by the cases of the UN, Denmark, and Sweden, it is confirmed that it is necessary to convert the evaluation scheme of ODA projects to an ESG-centered evaluation plan. Furthermore, this study discusses three basic directions in establishing ESG-centered ODA evaluation indicators: reclassification of existing evaluation indicators into ESG, participation of various stakeholders, and evaluation of the planning-process-results of ODA projects according to the value chain approach. According to the discussions above, the ESG-centered evaluation plan for ODA projects consists of three parts, including considerations at the business planning stage, considerations at the project progress stage, and considerations at the project completion stage. Furthermore, indicators that should be considered in the evaluation at each stage are divided into G (governance), E (environmental), and S (social). Although many items are reclassified from existing evaluation schemes, it is emphasized that especially concerning governance, new indicators that can reflect the opinions of diverse stakeholders, such as the government of the recipient country, local citizens of the recipient country, and private companies in the donor country, should be additionally considered.