Measuring & Managing Impact: our ESG System
– AN ADVANCED SYSTEM TO FULLY
INTEGRATE IMPACT IN OUR ACTIVITIES
Being an impact driven investor means also applying to ourselves our ESG approach and tools. Our ESG system has been developed in order to assess, monitor and report on non-financial performance of our clients. It is based on the best global practices for inclusive finance to measure, analyze, follow-up and score economic, social and environmental impact.
CoopEst tracks the social and environmental impact of every investment. This is a multistakeholders approach that aims to achieve big measurable impact on Environment, Social (with SDGs), Governance and Gender.
We are aligned with the Universal Standards of the Social Performance (USSPM) Task Force, the Global Investing Network (GIIN-IRIS) guidelines and the Smart Campaign for client protection principles.
We evaluate our environmental performance in line with the CERISE SPI4 Green Index and assess the effects of climate change on investees portfolios. Additionally, women empowerment is analyzed more in-depth through the benchmarks used by 2xChallenge initiative. Good governance control is heavily inspired by the European Code of Good Conduct for Microcredit provision.
– PROCESS AND FUNCTIONING
OF THE ESG SYSTEM
The system collects client information through the ESG Smartsheet, a matrix of quantitative and qualitative indicators over eight dimensions:
1. Mission
2. Environmental Performance
3. SPM Practices
4. Products & Services
5.Outreach
6. Client Treatment
7. Staff Treatment
8. Governance.
Data are verified to ensure quality and coherence and then are integrated to our MIS. The analysis and scoring of the data results in final outputs, which are used for both internal and external purposes.
An ESG Scorecard is issued for every new investment to rate and benchmark the non-financial performance of a potential investee over four key elements (SDGs, Environment, Gender, and Governance).
The following impact indicators are referring only to the portfolio invested in MFIs and Credit Unions over the period 2008-2022.
Gender Impact Analysis
Through a set of indicators reported by the CoopEst investees, and in line with the 2XChallenge, we were able to measure our contribution to close the gender gap through our investments and track the progress over the long run.
1. Women entrepreneurship
Business founded/maintained by women
48,2%
Business loans to women
187.353
2. Women entrepreneurship
Women on the Board of Directors
29,7%
Women in senior management position
56,9%
3. Women in the workforce
Number of employees
8.894
Women in the staff
54,4%
Investees with policies including gender non-discrimination in the workplace
87,9%
4. Women entrepreneurship
Women clients
47,3%
Loans for unbanked women clients
67.996
Portfolio dedicated to women
42,6%
Environmental Performance Analysis
Under these considerations of commitment and challenges, our ESG system includes an environmental dimension composed of 5 standards and 17 quantitative and qualitative indicators. Four of these standards are aligned with the Green Index 2.0 and the fifth standard, developed in-house, corresponds to our investees’ perception of the effects of climate change on their clients and portfolio.
1. Strategy, direction and communication of environmental management
Investees with environmental goals, targets and/or indicators
62,5%
Investees with a specific person/committee to manage environmental performance
31,9%
Investees reporting on environmental performance
37,5%
2. Internal environmental risk management
Investees implementing actions to monitor and reduce its internal environmental risk
43,1%
3. External environmental risk management
Investees assessing external environmental risk
22,2%
Investees with explicit policy or exclusionary list to avoid environmental adverse effects
83,4%
4. Green financial and non-financial products
Green loans (green housing, green agriculture, environmental products and RE/EE)
23.489
Average amount of disbursed green loans
2.337
Investees offering agricultural or climatic micro-insurance products for climate resilence
15,3%
SDGs Impact Analysis
We apply the UN SDGs as the key language to show our involvement to global sustainable development: we measure and score the level of SDG achievement of our CoopEst investees.
The findings show that CoopEst has contributed to the generation of positive social impact for five SDGs:
- 1: No Poverty
- 2: Zero Hunger
- 5: Gender equality
- 8: Decent Work and Economic Growth
- 10: Reduced inequalities
- Climate Action
Active clients
902.822
BoP (loans< GNI per capita)
86,2%
Average outstanding loan size as % of GNI per capita*
44,6%
Rural loans
508.858
Loans for agriculture/livestock
253.946
Portfolio allocated to micro-enterprises in agriculture
31,2%
Loans to women clients
415.138
Loans to women for business development
48,2%
Women in senior management positions
56,9%
Women in the workforce
54,4%
Jobs created/maintained
603.803
Business created/matained
165.931
Micro-enterprises financed
54,2%
Portfolio for income generating activities
75,2%
Investees carring out projects to develop green financial products
27,9%
Investees with environmental exclusion list
83,4%
Investees monitoring internal ecological footprint
41,2%
Governance Analysis
In line with the development of the ESG System, CoopEst conducted an in-depth evaluation of governance performance of its investees. The evaluation considered 24 indicators (quantitative and qualitative) across four key dimensions: 1. Business Planning, 2. Board
Effectiveness & Independence, 3. Management, HR & Operational Manuals, and, 4. External Accountability.
1. Business Planning
Investees with strategic documents (e.g. business plan, strategy, operational plan)
100%
Investees with social goals and targets included in business plan or operational plan
97,0%
Investees with environmental goals in a formal environmental policy or business plan
49,4%
2. Board Effectivness & Independence
Investees with board of directors or equivalent body
100,0%
Investees that have put in place an audit/internal control committee
87,5%
Board of directors using social performance data to provide strategic direction
94,4%
Board of directors using environmental performance data to provide strategic direction
38,9%
3. Management, HR & Operational manuels
Investees with succession plan for executive management
70,8%
Investees with an HR policies including gender non-discrimination and prevention of gender-based violence in the workplace
90,3%
Employees receiving skills training/development
81,5%
Investees with an internal code of conduct
99,2%
4. External Accountability
Investees audited by an external auditor on annual basis
100%
Investees publish the auditor's report on annual basis
77,8%
Investees carring out internal control processes that consider social performance aspects
93,1%
Other indicators
Final beneficiaries using Mobile Money Services
624.761
Investees with an internal tool to control indebtedness
100,0%
Investees with a policy and/or system to protect the clients data confidentiality/security
100,0%
CoopEst European leader in long-term inclusive finance
