Financial transactions have real-world impacts on the environment, society and the economy. Taking these into account with a triple bottom line approach can be a powerful driver of more positive outcomes beyond the economic, and even beyond the direct borrower or customer. MFIs’ clients are among the most affected by climate change and environmental degradation, and indeed, so are the MFIs’ portfolios. At the same time, clients’ activities can pollute the environment and endanger the health of employees and local populations. Microfinance can contribute to transforming these threats into opportunities, providing financial and non-financial services which improve clients’ resiliency, foster sustainable rural development, offer access to good quality clean energy, and contribute to supporting social and environmental responsibility.
In this article Davide Forcella, Senior Consultant, Inclusive Finance & Energy Finance at Enclude and Geert Jan Schuite, Enclude’s Global Group Lead, Outcomes Management and Strategy, present the activities of e-MFP’s Action Group on Microfinance and the Environment, which they are leading.