Why is environmental due diligence included in project appraisal?

• A. To avoid any environmental assessment.
• B. To assess potential environmental and social impacts and ensure compliance.
• C. To artificially inflate costs.
• D. To only consider financial metrics.

Answer: (B)

Environmental due diligence in project appraisal exists to systematically identify environmental and social risks and to verify that the project will meet applicable laws, permits, and standards. This helps decision-makers understand potential impacts, estimate mitigation or remediation costs, avoid legal or financial liabilities, and shape the project design to minimize harm while sustaining long‑term viability. That’s why the best choice describes both assessing environmental and social impacts and ensuring compliance with regulations and standards. For example, it involves checking for pollution, resource use, habitat effects, community impacts, and permit requirements so the project can proceed responsibly. The other options miss the core purpose: avoiding environmental assessment is the opposite of due diligence, inflating costs isn’t the goal, and focusing only on financial metrics ignores environmental and social dimensions essential to sound appraisal.