The Social Dimensions of Development Bankingeosd.org/en/gsfc2015/day2/Patricia_Richter_ILO.pdf ·...

The Social Dimensions of

Development Banking Evidence from Africa and Asia & the Pacific.

Global Sustainable Finance Conference

Karlsruhe, Germany

Patricia Richter

June 12, 2015

Overview

• Background ILO and its mandate

• How did the study come about?

• Analytical approach and methodology

• Survey results

• Way forward

The ILO…

Established in 1919

(First) Specialised UN agency that seeks

“the promotion of social justice and

internationally recognised human and labour

rights”

“It is the responsibility of the ILO to examine and

consider all international economic and financial

policies and measures in the light of social justice.”

- ILO Constitution -

…and its mandate in Social Finance

ILO Social Finance Programme

• Support the development and adoption of financial services and policies for social justice

Mission

• Create jobs and improve the quality of employment, particularly for workers in the informal economy, through innovative financial services and conducive policies

Better employment

• Reduce the vulnerability of the working poor through improved access to appropriate risk-managing financial services, including savings, insurance, emergency loans and remittances

Less vulnerability

Constituents

• Workers

• Employers

• Governments

Office

• Social Finance Network

• Focal Point function

External partners

• Financial sector players

• Networks, associations

• Donors

Wh

at?

W

ith

wh

om

?

1) Innovate, experiment, test

2) Analyze, document and

develop tools 3) Disseminate

4) Promote: a) policy dialogue, and b) capacity

building Ho

w?

How did the study come about (1)?

Substance background…

"Sustainable development is development that meets the needs

of the present without compromising the ability of future

generations to meet their own needs”. (Brundtland, 1987)

Financing sustainable development creates financial returns while managing social and environmental risks and impact and

seeking to realise development opportunities

Environment

Economic Social

Observation:

social dimension

lagging behind

How did the study come about (2)?

“Sustainable encounters”…

• Exchanges with ADFIAP, AADFI and ILO at Global

Sustainable Finance Conference

• ILO presentation at Joint CEO Forum Nov 2014

• Launch of a study to investigate to what extent

DFIs in Africa and Asia & the Pacific have

implemented formal Social and Environmental

Management System (SEMS)

19 DFIs participated in the study

AFRICA

• Agricultural DB, Ghana

• African Export-Import Bank, Egypt

• Banque de l’habitat de Côte d’Ivoire

• West African DB, Togo

• DB of Rwanda

• DB of the Seychelles

• DB of Southern Africa

• East African DB, Uganda

• Fonds de Promotion de l’Industrie, DRC

• African Solidarity Fund, Niger

• IDB Capital Limited, Kenya

• Kenya Tourist Development Corporation,

Kenya

• TIB Development Bank, Tanzania

ASIA & PACIFIC

• DB of the Philippines

• DFCC Bank Sri Lanka

• LANDBANK Philippines

• DB of the Cook Islands

• DB of Samoa

• Tonga DB

Social and Environmental Management

system (SEMS)

Policy

Safeguards/ standards

Procedures

Responsibilities

Training

Reporting

Analytical approach and methodology (1)

0

20

40

60

80

100

Overall

S&E Policy

S&E Standards

S&E ProceduresS&E Responsibility

S&E Training

S&E Reporting

Analytical approach and methodology (2)

Results: Overview of DFI Clusters

Cluster Description Range of

Scores

#

DFIs

Av.

Score

Advanced

& balanced

SEMS

76 - 100

Advanced

SEMS with

bias

65 - 75

Early stage

SEMS

50 - 64

S&E Policy

only

21 - 49

No SEMS 0 - 20


Scores

#

DFIs

Av.

Score

Advanced

& balanced

SEMS

SEMS is formal, comprehensive,

advanced, and balanced towards

social and environmental issues

76 - 100

Advanced

SEMS with

bias

Advanced, formal SEMS with a

bias towards either social or

environmental concerns

65 - 75

Early stage

SEMS

Less advanced, though formal

SEMS, significant opportunities for

improvement in social and

environmental dimensions

50 - 64

S&E Policy

only

S&E Policy without SEMS, yet to

formally implement the policy

21 - 49

No SEMS No formal SEMS, elements may

exist informally

0 - 20

Results: Overview of DFI Clusters


Scores

#

DFIs

Av.

Score

Advanced

& balanced

SEMS

SEMS is formal, comprehensive,

advanced, and balanced towards

social and environmental issues

76 - 100 4

(21%)

84.3

Advanced

SEMS with

bias

Advanced, formal SEMS with a

bias towards either social or

environmental concerns

65 - 75 2

(11%)

67.5

Early stage

SEMS

Less advanced, though formal

SEMS, significant opportunities for

improvement in social and

environmental dimensions

50 - 64 3

(16%)

56.5

S&E Policy

only

S&E Policy without SEMS, yet to

formally implement the policy

21 - 49 4

(21%)

33.3

No SEMS No formal SEMS, elements may

exist informally

0 - 20 6

(32%)

4.63

0

20

40

60

80

100

Overall

S&E Policy

S&E Standards


S&E Training

S&E Reporting

Visual of clusters

Cluster “Advanced & balanced SEMS“:

Results

• 4 DFIs based in Africa

• Average score: 84.3/100

• 4/6 SEMS building blocks scored above 76 %

=> Characteristic: Formal and advanced SEMS, which is mostly

equally addressing social and environmental issues

0

20

40

60

80

100Overall

S&E Policy

S&E Standards


S&E Training

S&E Reporting

Advanced and balanced SEMS

Advanced SEMS with bias

Early stage SEMS

S&E Policy only

No SEMS

Average Score in %

Cluster “Advanced SEMS with bias“: Results

0

20

40

60

80

100Overall

S&E Policy

S&E Standards


S&E Training

S&E Reporting

Advanced Balanced SEMS

Advanced SEMS with Bias

Early Stage SEMS

S&E Policy

No SEMS

Average Score in %

• 2 DFIs based in Asia & Pacific


• 5/6 SEMS building blocks scored between 65 % and 75 %

=> Characteristic: Formal and advanced SEMS, which is however

biased (towards environmental considerations)

Cluster “Early stage SEMS“: Results

• 3 DFIs based in Africa and Asia & Pacific


• Scores of building blocks cover three different clusters!

Variation among the DFIs.

Characteristic: Formal SEMS, however, building blocks have

significant room for improvement in terms of assessing S&E

risks, impacts, and opportunities

0

20

40

60

80

100Overall

S&E Policy

S&E Standards


S&E Training

S&E Reporting Advanced and balanced SEMS


Early stage SEMS

S&E Policy only

No SEMS

Average Score in %

Cluster “S&E Policy only“: Results

• 4 DFIs based in Africa


• All building blocks score between 20 % and 50 %.

Characteristic: Adoption or development of an S&E policy,

without having a formal system to implement the policy. DFIs

have to a greater or lesser extent informally implemented

selective elements of the building blocks.

0

20

40

60

80

100Overall

S&E Policy

S&E Standards


S&E Training

S&E Reporting

Advanced and balanced SEMS


Early stage SEMS

S&E Policy only

No SEMS

Average Score in %

Cluster “No SEMS“: Results

Characteristics:


• No formal SEMS, but a number of informal SEMS elements

• 6 DFIs based in Africa and Asia / Pacific belong to this cluster

Informal SEMS elements:

• S&E Policy: Whereas all DFIs target specific sectors to foster socio-economic

development, 2 DFIs mentioned to have specific arrangements for supporting

women, NGOs and low-income households.

• S&E Procedures

– Ad-hoc requirements (approvals from ministries, requesting feasibility

studies, brief site visits)

– 1/2 DFIs: inclusion of S&E issues in credit reports & loan agreements at

times

• S&E Skills and Training

1 DFI sent lending staff to technical S&E training, provided by MoE

1 DFI worked in close collaboration with relevant ministries and agencies

Addition: The cluster has interest in developing a SEMS, without having taken

concrete steps yet (e.g. developing action plan).

Comparative results across clusters:

Results

Common challenges: Capacity gaps, clients‘ S&E financing

needs, weak regulation, lack of S&E banking regulation

0

20

40

60

80

100Overall

S&E Policy

S&E Standards


S&E Training

S&E ReportingAdvanced and balanced SEMS


Early stage SEMS

S&E Policy only

No SEMS

Average Score in %

WAY FORWARD

Current planning...

• Publication of results

• Application of the ILO SEMS Assessment Tool

• Capacity building

– Awareness raising / Sensitisation

– Training

– Mentoring

– Consulting

– Helpdesk platform

• Research

A big thank you to...

...all DFIs that participated in the study,

...ADFIAP and AADFI for facilitating the process,

...YOU for listening

www.ilo.org/socialfinance

[email protected]

http://www.ilo.org/socialfinance

mailto:[email protected]

The Social Dimensions of Development Bankingeosd.org/en/gsfc2015/day2/Patricia_Richter_ILO.pdf ·...

Documents

Transcript of The Social Dimensions of Development Bankingeosd.org/en/gsfc2015/day2/Patricia_Richter_ILO.pdf ·...