ESG Toolkit

The tools below are specifically targeted at private equity investment funds and microfinance institutions (MFIs) and small and medium enterprise (SME) banks.

(1) ESG risk management tool for Private Equity Investment

This ESG Toolkit is based on the IFC Performance Standards. Experience has shown that a significant discrepancy exists between the high-level nature of environmental and social requirements and their implementation within private equity (PE) Funds. One of the main hurdles is the design and implementation of the so-called environmental and social management system (ESMS).

It is FMO’s experience that a well-functioning ESMS can help an investment fund to enhance the business performance of its investments and in finding better deal exit possibilities. To assist its clients in private equity with the implementation of an ESMS, FMO has together with Steward Redqueen designed an Environmental, Social and Governance (ESG) toolkit aiming specifically at PE Funds. The tool is currently maintained and implemented worldwide in PE Funds by Steward Redqueen.

The three main categories of the ESG Toolkit are (1) risk, (2) risk management and (3) opportunities. Based on a number of characteristics of investments, the tool provides an overview of the most relevant ESG risks, a score for the effectiveness of ESG risk management and the main ESG opportunities.

The three above-mentioned outputs are delivered at the level of individual investments and at the level of the portfolio. At the level of individual investments, the tool enables a structured approach to ESG due diligence and ESG management reviews. At the level of the portfolio the tool provides graphical overviews of the aggregated ESG situation of the entire investment fund. This overview can also be used for (FMO) reporting purposes.

The ESG Toolkit is an Excel spreadsheet. The tool can be used by anybody who has Excel Office version 2003 or later.

Click here to download the tool (winzip v2.0)

(2) Corporate Governance Toolkit for Banks, NBFIs and MFIs

This toolkit provides the instruments for the assessment of Corporate Governance risks in banks, NBFIs and MFIs during the investment phase. This toolkit is meant for such institutions in a basic, emerging and developed stage, considering the regulated environment they are operating in.

Click here to download the tool 

For further explanation, see the Manual for Corporate Governance Toolkit for FI's.

(3) Corporate Governance Toolkit for Corporates (including Family-owned Businesses)

This toolkit provides the instruments for the assessment of Corporate Governance risks in (family-owned) corporates during the investment phase. This toolkit is meant for enterprises in a basic, emerging an development stage.

Click here to download the tool.

For further explanation, see the Manual for Corporate Governance Toolkit for Corporates

(4) MFI and SME sustainability guidance e-learning tool

This sustainability e-learning tool supports microfinance institutions (MFIs) and banks that finance small and medium enterprises (SME banks) that wish to reduce the environmental and social (E&S) risks in their portfolio.

Once downloaded and installed, the e-learning tool covers:

• Step I: Getting prepared. This is an introduction to ‘What are E&S risks’ and ‘Why are E&S risks relevant’, all within the specific context of MFIs and SME banks.
• Step II: Proceed to action helps the MFI or SME bank to organize a pilot and to define the boundaries of the project.
• Step III: Successful implementation that helps the MFI or SME bank to formulate its own sustainability policy, taking into account the sustainability ambitions of the organization.

Free use

We encourage further dissemination of this tool to other MFI's or SME banks.

The office guide explains how to implement E&S evaluations and follow-up processes in alignment with the MFI's or SME bank’s regular credit evaluation, approval and monitoring and reporting processes. The field guide offers the MFI/SME bank loan officer practical guidance to address environmental and social themes in the contact with their clients.

Click here to download the tool (winzip v2.0)