Typical problems encountered

Problems we encounter when assisting financial institutions to set up ESMS are very similar among our clients, no matter where they are and irrespective of their concrete business model. The following list shows a series of these problems. Addressing these problems with our clients is almost always successful. Reasons for failure become success factors.

Typical problems encountered in financial institutions when implementing an ESMS

  • No REAL interest
  • Sponsoring of a soccer club understood as CSR
  • Missing willingness to provide resources
  • E&S officer just on paper
  • E&S officer not independent
  • E&S officer overloaded with other work
  • E&S officer not sufficiently qualified
  • No sufficient support to E&S officer
  • E&S Policy and procedures non existant or vague
  • E&S Policy not signed or published
  • Procedures not available in writing
  • Procedures not integrated in overall process
  • Procedures not in a position to assure compliance with lenders requirements
  • IFC PS not fully understood

Wrong perception of purpose of ESMS – The purpose of the ESMS is NOT…

  • To transform investment managers into environmental and social experts. Whenever serious environmental or social problems come up, “real” experts will need to be involved.
  • To “offload” work from the local authorities to the managers. Obviously, the local authorities’ roles and responsibilities remain unchanged.
  • To unnecessarily “increase” the workload for credit officers. The additional workload will actually be marginal and allow for a much deeper understanding of the investment project thereby reducing risks.
  • To create more “bureaucratic hurdles” for the companies in need of credits thereby reducing competitive situation.