Posted by: Taea Calcut
In a world where development discourse is increasingly peppered with terms such as "sustainability" and "green," what initiatives have socially-conscious microfinance institutions assumed to lessen the environment impact wrought by their clients as well as their own operations? Data from MIX Social Performance reports, which feature a "Social Responsibility to the Environment" (SRE) section regarding MFIs' environmental policies and activities, can help us to begin answering this question.
Graph 1: MFIs with SRE Policies Directed at Supported Enterprises (n=163)
First, what percentage of MFIs report having SRE policies directed at clients and client-owned enterprises? As seen in Graph 1, 81 or about 50% of 163 reporting MFIs claim to have written or informal policies, while another 11 or 7% are in the process of developing written policies.
Selecting one or more options from a list of potential areas of focus, the 81 MFIs with written or informal policies report that policies are most likely to emphasize raising client awareness about environment impacts (57%). Other areas of focus covered by policies, listed in order of popularity, include:
- Identifying enterprises with environmental risks (49%);
- Including specific clauses in loan contracts to mitigate specific social/environmental risks (35%);
- Training and/or educating clients about environmental improvements (31%); and
- Linking lend lines to alternative energies (14%)
Another 3 or 4% of MFIs reported “Other” policies, including an emphasis on environmental conferences and events as well as the promotion of environmentally-friendly technology (ex. providing loans to clients for hand-operated rather than motor-operated water pumps).
Graph 2: MFIs with SRE Directed at Internal Operations (n=163)
Second, what percentage of MFIs report having SRE policies directed at their internal operations? As illustrated by Graph 2, 82 or again about 50% of 163 reporting MFIs claim to have written or informal policies. Another 14 or 9% are in the process of developing written policies.
Among those 82 MFIs with written or informal internal SRE policies, an overwhelming majority (87%) stresses a reduction in paper use and promotes paper recycling. Policies also aim to minimize the use of conventional electricity (57%), water (40%), and conventional fuels (34%). An additional 15% of MFIs emphasize waste management and encourage planting trees and other flora in their business’ surrounds.
Now that we’ve presented an overview of the type and content of SRE policies adopted by MFIs around the world, we ask our readers: what measures, if any, has your institution taken (or does it plan to take) to address the environment impact of its operations and clients’ businesses?
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