High Environmental, Social and Governance standards are prerequisites for succeeding in delivering on Norfund’s mandate.
Appropriate Environmental, Social and Governance (ESG) measures reduce risk to workers, the environment, local communities and other stakeholders and provide business benefits which increase our impact. The management of environmental and social risks is therefore an integral part of Norfund’s investment process.
New ESG Policy
A new ESG policy was approved by Norfund’s Board of Directors in 2020. The policy describes our sustainability commitments and outlines the main standards we use in our work.
The new policy has a more detailed description of the following two components: how we work to identify, assess and manage the environmental and social risks associated with the operations of our clients, and the cross-cutting issues that guide our work.
Integrating ESG into the project cycle
Environmental and social risk management is an integrated part of Norfund’s project cycle. The ESG policy explains how we work to:
- incorporate appraisal of environmental and social risks into our analysis and decision-making processes
- require the companies we invest in to adhere to high standards
- monitor and promote environmental and social performance throughout our investment period
- improve capacity and competence
- promote transparency and disclosure of performance
One of the ways Norfund helps firms to achieve best practice standards is through our ESG workshop programme, which provides hands-on support and practical advice.
The standards we use:
The IFC Performance Standards for Environmental and Social Sustainability and the World Bank Environmental, Health and Safety Guidelines are the main standards for operationalising Norfund’s sustainability commitments. These standards are globally recognised benchmarks for environmental and social risk management in the private sector. The standards are used by development finance institutions, commercial banks and other similar institutions.
Norfund is a signatory to the UN Principles for Responsible Investment.1 Norfund is further committed to:
- The Harmonized EDFI Exclusion List2
- EDFI Principles for Responsible Financing3
- The Corporate Governance Development Framework4
IFC PERFORMANCE STANDARDS
The eight Performance Standards define clients’ responsibilities for managing their environmental and social risks. The following aspects are included:
1: Assessment and Management of Environmental and Social Risks and Impacts
2: Labour and Working Conditions
3: Resource Efficiency and Pollution Prevention
4: Community Health, Safety and Security
5: Land Acquisition and Involuntary Resettlement
6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
7: Indigenous Peoples
8: Cultural Heritage