Deutsche Bank

Corporate Responsibility
Report 2016

Sustainable investment funds

Investor interest is growing rapidly in sustainable and impact funds that contribute to the UN Sustainable Development Goals (SDGs). According to the 2016 Global Impact Investing Network survey, sustainable and impact funds under management are expected to grow.

Our extensive investment universe of sustainable and impact funds covers energy (clean energy, energy storage, energy usage), environment (food/agriculture, waste, water), microfinance, employment/education, and housing. These funds achieve a “triple bottom line” in which financial returns are delivered alongside positive environmental and social outcomes. In 2016, we managed eight sustainable and impact funds with a combined volume of over €1.63 billion.

Sustainable Investment funds and their contribution to the SDGs

Fund

Mission

Launch

Vol. €m

Role

*

IM: Investment Manager

**

FM: Fund Manager

Africa Agriculture and Trade Investment Fund (AATIF)

SDGs: 1, 2, 8, 9, 13, 14, 15

Improve food security and end poverty through sustainable investment along the entire agricultural value chain in Africa

2011

116

IM*

Clean Cooking Working Capital Fund

SDGs: 3, 7, 13

Financing of clean cookstove companies in the developing world

2015

0.7

IM

Essential Capital Consortium

SDGs: 4, 7, 10

Debt financing to health, energy, and financial service providers in low-income communities in the developing world

2014

37

IM

European Energy Efficiency Fund (EEEF)

SDGs: 11, 13

Energy efficiency and renewable energy in the public sector in Europe

2011

112

IM

European Fund for Southeast Europe (EFSE)

SDGs: 8

Foster economic development and prosperity in southeast Europe and in the European Neighborhood East region through the sustainable provision of additional development finance, notably to micro and small enterprises (MSEs) and to private households, via qualified financial institutions

2005

919

FM**

Green Growth Fund (GGF)

SDGs: 7, 11, 13

Energy efficiency and renewable energy via local banks in southeast Europe, including Turkey and the European Neighborhood East region

2009

363

FM

Microfinance funds

SDGs: 1, 5, 8

Senior and subordinated debt financing for microfinance institutions and banks in the developing world, to increase access to high quality financial services

 

 

 

Global Commercial Microfinance Consortium II

2012

82

IM

Microcredit Development Fund

1997

3.6

IM

Total

 

 

1.634

 

Governments around the world adopted the SDGs in September 2015 to guide international cooperation towards a set of ambitious quantitative goals for all countries, not just developing countries. While governments have the main responsibilities for leading efforts, UN-supported research estimates that US $5-7 trillion of investment a year will be needed over the next 15 years and this will require new flows of private capital. Each fund addresses a specific set of SDGs.

We cover four continents with our sustainable and impact funds, including over 30 developing countries, covering low and lower-middle income countries such as Armenia, Cambodia, Côte d’Ivoire, Democratic Republic of Congo, El Salvador, Honduras, India, Kyrgyzstan, Nicaragua, Nigeria, and Tajikistan. We track and report on how the funds deliver positive environmental and social outcomes. Some of the funds (AATIF, EEEF, EFSE and GGF) have dedicated websites where more extensive reporting is available.

Fund

Positive environmental or social outcomes

Africa Agriculture and Trade Investment Fund

As of 3Q 2016, US $140m disbursed to companies and financial institutions to help improve Africa’s agricultural sector and benefit the poor. One investee expanded to include 628 small-holder rice farmers (28% women) who received training in Good Agricultural Practices, and financial support for irrigation charges. A loan from one of AATIF’s local bank investees supported 1,628 smallholder tea farmers in Zimbabwe to buy new agricultural equipment and expand cultivation of coffee, avocadoes and macadamia nuts.

European Energy Efficiency Fund

As of 4Q 2016, EEEF has invested €112 m across eleven projects in seven countries that are producing cumulative primary energy savings of 18,553 MWh and cumulative CO2e savings of 248,975 tonnes of CO2e.

Finca Microfinance Fund
(fund finished its seven years of operation in 2016)

The Finca fund has supported seven microfinance institutions (MFIs) in seven countries. From 2009 to 2Q 2016, the number of borrowers served increased by 33% representing 143,251 new clients (71% are rural borrowers). Over the past seven years of the fund, MFIs’ assets more than doubled to US $583m and 2,503 jobs were added in the MFIs. Four of the MFIs now provide savings products (up from one in 2009) allowing 400,000 new low-income clients to use the MFIs to save capital.

Global Commercial Microfinance Consortium II

As of September 2016, the fund’s US $88.6m portfolio across 15 countries and 32 investees was primarily concentrated on microfinance, with three social enterprise loans to an energy company and two alternative financial services companies. Of the nearly 8m underlying borrowers, 83% were women.

Essential Capital Consortium

As of September 2016, the fund’s US $34.6m portfolio across 10 countries and 14 borrowers was 14% focused on energy, 21% on health, 23% on microfinance and 42% on other financial services.

Most of the funds have been in the form of “blended finance” through public–private partnerships, which provide opportunities to attract private investments through catalytic public-sector investments in the form of first-loss capital or guarantees.