environmental and social characterization of individual clients and total portfolio, using...
DESCRIPTION
Anton Van Elteren, Senior Environmental Specialist - FMO - The NetherlandsTRANSCRIPT
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"Environmental and social characterization of individual clients and total portfolio, using integrated scorecards."
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Vision FMO
The Netherlands Development Finance Company (FMO) invests risk
capital in companies and financial institutions in developing
countries.
Goal is to create flourishing enterprises which can serve as engines
of sustainable growth in their countries.
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> Investing in entrepreneurship includes managing and mitigating
negative social and environmental impacts.
> Environmental & social standards & criteria:
World Bank / IFC & ILO.
> Experience shows: ‘Contribution to economic growth’ and ‘social and
environmental development impact’ are interrelated.
> Integrated approach of economic prosperity, social development and
environmental preservation.
Commitment to sustainable development
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> One integrated scorecard for each client
> Sections of the scorecard:- Risks
- Development Impact
- Added Value and Role FMO
> In each section:- Financial / economic
- Social
- Environmental
> Scorecard Manual with defined criteria for each indicator (unsatisfactory / partly (un)satisfactory / good / excellent).
Integrated approach in practice: using the FMO scorecard
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Social & environmental indicators – Risk (CF/FI *)
Social> Social policies (CF/FI)
> Core labor standards (CF/FI)
> Primary labor conditions
(CF/FI)
> Direct social impacts (CF)
> Specific social liabilities (CF)
> Social management system
(FI)
Environmental> Environmental policy (CF/FI)
> Environmental management
(CF/FI)
> Direct environmental impacts
and safety performance (CF)
> Specific environmental
liabilities (CF)
* CF = Company Finance FI = Financial Institution
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Social and environmental indicators – Development impact (CF/FI)
Social> Labor relations (CF)
> Community development
(CF)
> Stakeholder participations
(CF)
> Social performance of
clients (FI)
> Specific social investments
(FI)
Environmental> Exploitation / conservation of
non-renewable resources
(CF)
> Chain stewardship (CF)
> Eco efficiency (CF)
> Environmental performance
of clients (FI)
> Specific environmental
investments (FI)
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Results (Example from FMO Sustainability Report 2005)
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> Integrated financial/economic, social and environmental evaluation
part and parcel of FMO approach to financing.
> Most clients see added value.
> This approach goes well beyond the GRI guidelines and the FI sector
supplements to that.
> Please refer to FMO Sustainability Reports 2004 and 2005 for more
detailed information & results (www.fmo.nl).
> Looking forward to your comments.
Conclusions