In Association with Eurosif, CGAP Names Oikocredit, Triodos, Incofin Winners of 2010 Awards AMSTERDAM
October 12, 2010—Microfinance investors have quietly become important allies for the poor globally, providing billions of dollars to back the micro loans that are making a difference for millions of people globally. Today, CGAP recognized three microfinance asset managers as being “best in class” for their commitment to environmental, social, and governance (ESG) issues in their investment decisions.
To highlight exemplary microfinance investment vehicles (MIVs) that exhibit the strongest commitment to ESG factors, CGAP partnered with the United Nations’ Principles for Responsible Investment initiative (UN PRI), LuxFLAG of Luxembourg, and the European Social Investment Forum (Eurosif) to create the CGAP MIV ESG Awards. During the Eurosif annual meeting in Amsterdam, CGAP announced that the inaugural winners of the Awards were Oikocredit and Triodos Investment Management BV of The Netherlands, and the Rural Impulse Fund I managed by Belgium’s Incofin. CGAP received applications from more than one-third of the 90 MIVs that together manage more than US$7 billion, a vital pool of financing that supports microfinance institutions around the world.
A review board comprising representatives from CGAP, UN PRI, and LuxFLAG considered the applications and judged them against four criteria: transparency of ESG reporting; integration and enforcement of ESG principles; comprehensiveness of the ESG framework; and engagement and innovation.
“The MIV ESG Award process has been a great learning experience for all of us, not just the MIVs aiming to achieve recognition for their commitment to social goals, but the broader microfinance community,”
said Xavier Reille, CGAP manager responsible for the Awards. “We were impressed not only by the degree of commitment of investors to key environmental, social, and governance principles but also by the innovation in their approaches that these Awards will showcase for other microfinance investors.” Although the motivations and return expectations of MIVs differ, the majority portray themselves as socially responsible investors, drawn to microfinance for its potential to deliver both financial and social returns.
Microfinance asset managers are committed to improving their transparency on environmental, social and governance (ESG) practices and almost 70% of MIVs are already including microfinance ESG indicators in their reports to their own investors. Accordingly CGAP’s 2010 MIV Survey, a growing number of MIVs are committing to incorporating ESG concerns in their investment decisions, even at a time when tough market conditions have reduced returns and growth rates, leading many asset managers to reassess their strategies.
“With each one of these Award winners, we are also recognizing their own distinctive efforts to innovate and take that extra step,” Reille said. “Oikocredit was notable for its innovation and engagement with its own investees; Triodos set a high standard for integrating ESG issues in their strategy and enforcing these principles, and Incofin was a leader in reporting and transparency.”
Ultimately, Reille said, CGAP’s 2010 MIV ESG Awards aim to further encourage microfinance asset managers to set ever higher standards for themselves in considering ESG factors, as it will be the people of developing countries and their communities who will benefit from MIVs’ consideration of these critical issues.
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