Responsible finance –
EFSE’s approach at the partner lending institution level

Social Performance Assessment

In addition to assessing the financial strength of every partner lending institution, the European Fund for Southeast Europe also assesses the scope and quality of corporate values and business practices employed by its partners. The so-called Social Responsibility Assessment covers the following areas: Mission, Client Protection Principles, the outreach of microfinance institutions and with banks their responsibility towards staff, community and environmental issues. The Social Responsibility Assessment is prepared for every new partner institution as part of the due diligence process. This is then followed by an annually updated rating.

Promoting sound social and environmental management systems

The Fund promotes the implementation of sound social and environmental policies and management systems in partner lending institutions. As a minimum standard, EFSE requires each partner lending institution to refrain from financing activities listed in a social and environmental exclusion list. Furthermore, the Fund proactively offers training in this area. It prepares an annual monitoring report on the status quo and progress made at the partner lending institution level.

The social dimension of the Fund's responsibility include

• labour standards,
• working conditions, and
• community impacts (i.e. promotion of public health, protection of cultural heritage, promotion of safety and security, respect of gender equality, anti-discriminatory practices).

The environmental dimension primarily covers impacts on:

• natural and environmental resources,
• biodiversity, and
• communities, where access to water and unpolluted air are ensured.

The Fund and its partner institutions strictly adhere to this social and environmental policy.