We are the first commercial bank globally to become accredited to act as an implementing entity for the Green Climate Fund, established by the UN Framework Convention on Climate Change’s Conference of the Parties as the central global investment vehicle to combat climate change and its effects. Total pledges made to the Fund amounted to US $10.3 billion as of November 2016.
In October 2016, the Fund approved an initial US $78.4 million (€74.4 million) investment in a new Deutsche Asset Management fund for renewable energy access in Africa: the Universal Green Energy Access Programme. This anchor investment will allow us to raise a total of US $300 million in capital and contribute to SDG 7 (Sustainable Energy for All). The fund will work with and through local financial institutions in an innovative structure to enable local banks to extend medium and long-term loans in the local currency or US dollars for businesses that provide clean electricity solutions. The proposal has been endorsed by the governments of Benin, Kenya, Namibia, Nigeria, and Tanzania. The Programme aims to expand to other African countries, reaching a total target fund volume of US $500 million.
We are also developing new ways to create ESG investment opportunities for institutional investors, in particular in the areas of clean energy, environment, and microfinance.
A best practice approach to sustainable investment funds
We manage our sustainable and impact funds in line with ESG best practices, including incorporating social and environmental guidelines and performance indicators into the fund investment process. We look to the International Finance Corporation’s Performance Standards and the European Investment Bank’s Statement on Environmental and Social Principles and Standards. We adhere to international standards to assess energy consumption and carbon emissions of our European Energy Efficiency Fund (EEEF), including the International Performance Measurement and Verification Protocol (IPMVP®) and ISO 14064-2, and work with partner companies or projects to establish and apply all those standards. As a further measure for certain funds, we also partner with the UN International Labour Organization (ILO), the UN Environment Programme (UNEP), and the Common Fund for Commodities (CFC) as well as with research organizations.
Our EEEF also tracks carbon and primary energy reduction across its portfolio. Calculating savings is completed using our proprietary, Web-based monitoring, verifying, and reporting tool greenstem™. greenstem™ has built-in calculation models that follow international standards to assess energy consumption and carbon emissions. These include the International Performance Measurement and Verification Protocol (energy) and ISO 14064-2: International Standard for project level quantification, monitoring and reporting of greenhouse gas emissions (carbon).
In the area of microfinance, we promote the Smart Campaign, a set of consumer protection principles for microfinance borrowers and endorsed by thousands of investors, practitioners, networks, associations, and individuals. We have promoted tools, including the Microfinance Index of Market Outreach and Saturation (MIMOSA), which is seeking to establish a standard framework for measuring credit saturation to provide information that can be used to avoid over-indebting microfinance borrowers, and the Voice of the Client project, which is an initiative that is seeking to leverage mobile technologies to analyze the level of microfinance client satisfaction and search out potential client protection abuses.
We also support the Social Performance Task Force (SPTF), a non-profit membership organization working to define clear standards for social performance management and measurement in microfinance. Finally, we have also promoted industry tools and research through a technical assistance facility that is funded by the Swedish International Cooperation Development Agency (Sida). In March 2016, we hosted the biannual meeting of the SPTF’s social investor working group, a two-day workshop attended by approximately 70 investors to discuss industry initiatives and concerns.