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E-Toolkit for Environmental and Social Risk Management

Increasing MFIs' ability to manage social and environmental risk


YEARS

2008-2009

CLIENT DESCRIPTION

FMO is the Dutch development bank that supports sustainable private sector growth in developing and emerging markets by investing in ambitious companies.

CLIENT'S OBJECTIVE

Develop a toolkit that helps MFIs recognise and manage the environmental and social risks that could arise from their client portfolio.

Results

BUSINESS RESULTS

FMO now offers to its MFI clients a customised, hands-on and practical guide to addressing social and environmental issues within their portfolios in a manner consistent with FMO’s environmental and social policy.

MFI investment officers are empowered to assess and monitor potential environmental and social risks within their portfolios and to ensure that those risks are pro-actively addressed in the due diligence and monitoring phase of the loan cycle. The toolkit provides overview fact sheets with environmental and social-related risks for 40 different sectors.

SOCIAL & ENVIRONMENTAL OUTCOMES:

MFIs are able to anticipate and support their clients in pro-actively addressing environmental or social related risks.

Clients of MFIs using this toolkit now have a standard way to raise environmental and social concerns since the MFIs actively engage them in discussions about mitigating those concerns.

Activities

Conducted needs assessments for 10 MFIs worldwide.

Developed an interactive E-Toolkit consisting of exercises, tools and case studies that directly address the needs identified in the assessments.

Piloted the toolkit with selected MFIs worldwide and refined it based on the field findings and feedback. The pilot was a three day training on environmental and social risk management for investment officers.

Finalised and disseminated the toolkit, now available at http://www.fmo.nl/esg-tools

LEARNINGS

Supporting investors and MFIs in their effort to demonstrate responsible social and environmental performance cannot be a stand-alone activity. Greater success is achieved when it is aligned with other sector initiatives and includes a special focus on building local consulting capacity.