ik-header6

Environmental and Social Risk Management System

To develop and implement an Environmental and Social Risk Management System together with our financial institution clients is one of our key services / products. Our experiences with more than 40 FI clients worldwide allow us to compare results achieved, to build upon already existing tools, checklists, ideas (no re-inventing the wheel) and to offer very competitive prices.

We can set up an Environmental and Social Risk Management System in your Financial Institution / Investment Fund with the help of the following activities:

  • Top management motivation
  • Reviewing current portfolio with regard to E&S risks
  • Suggesting E&S procedures / tools / policies
  • Integration of E&S procedures into credit procedures
  • Coaching of E&S officers – including field visits
  • Providing training on latest E&S management practices including IFC Performance Standards
  • Monitoring success of E&S management system based on performance indicators
  • Integration of corporate governance, environmental and social issues into one single management process
  • E-learning on Sustainable Finance

Very often we offer this product in the framework of a technical assistance project financed by a development financing institution (e.g. IFC, KfW, DEG, FMO, CDC, AFD, Proparco, OeEB).

Purpose of a technical assistance project

The purpose of a technical assistance project is to set up an Environmental and Social Management System (ESMS) in order to systematically assess and manage E&S risks, including:

  • E&S policy
  • E&S procedures (guideline, checklist, responsibilities…)
  • E&S basic know how (training)
  • E&S responsibilities (E&S officer, buy-in)

A typical technical assistance project offered by us includes:

Phase 1: Assessment and action plan
Phase 2: Development of procedures / tools as per action plan
Phase 3: (Regional) training, start of trial testing, assistance for 2 projects
Phase 4: Evaluation of pilot phase
Phase 5: Fine tuning, final evaluation

What are we doing in phase 1?

Phase 1: Assessment and action plan

  • Understanding the credit process and setup
  • Understand shortcomings of existing E&S management system
  • Reviewing the portfolio (E&S risks)
  • Development of an ESMS structure
  • Preparation of a detailed action plan on how to proceed
  • Feedback by Top-Management
  • Getting “buy-in” from key people (change agents)
1

Phase

What are we doing in phase 2?

Phase 2: Development of procedures / tools as per action plan

  • Developing the documents identified in the Action Plan as necessary to develop an ESMS and E&S risk management capacity
  • E&S Policy
  • E&S Procedures
  • Supporting tools such as checklists and guidelines reflecting the company’s investment focus
2

Phase

What are we doing in phase 3?

Phase 3: (Regional) training, start of trial testing, assistance for 2 projects

  • Providing training in the application of the company’s E&S procedures
  • A pilot to test the ability of staff to implement the ESMS on pipeline deals
  • A site visit to one pipeline investment to provide relevant E&S Due Diligence input and to demonstrate best practice E&S Review
3

Phase

What are we doing in phase 4?

Phase 4: Evaluation of pilot phase

  • Evaluation of the pilot efforts
4

Phase

What are we doing in phase 5?

Phase 5: Fine tuning, final evaluation

  • On-going support to the company
  • Final evaluation of the effectiveness of its ESMS
5

Phase

Sample: Putting Principles for Responsible Insurance (PSI) into practice: An investor’s perspective

See details

Our other consulting services

Link to: Environmental and Social Due Diligence
Link to: E&S Risk Categorization
Link to: Tailor-made Consulting Services