DEG Guideline for environmental and social sustainability

We consider the protection of our environment, the sustainable use of natural resources as well as introduction of and compliance with appropriate social standards to be fundamental factors in the process of an ecological, economic and social development for the benefit of the people. We regard the promotion of such a long-term development to be our social responsibility. It thus forms a keystone of our mandate.

Fundamental elements of our activities are the preservation of resources and quality of life for future generations as well as the advancement of self-supporting economic systems. The ecological and social aspects of our work are therefore of particular significance to us. Based on the Environmental and Social Guideline "Responsibility in Society of KfW Bankengruppe, these Standards define the basis for the environmental and social sustainability of DEG's business activities.

As member of KfW Bankengruppe we endorsed the United Nations Environment Programme's (UNEP) Initiative on Financial Institutions on the Environment and Sustainable Development and we take part in this and other forums striving for the further development of international Environmental and Social Standards. We consider the harmonised high requirements of EDFI (European Development Finance Institutions) to be a basis of our environmental and social due diligence thereby also taking into account the substance of the Equator Principles.

DEG is guided by the following principles:

1. Environmental and social sustainability encompasses the protection of people's lives and health, the economic basis of their livelihood and their ecological, social and cultural environment as well as the sustainable use of natural resources. The consideration of these aspects is an indispensable principle of sustainable development for DEG.

We finance, advise and promote only such companies and institutions which share this conviction. We are convinced that economic success is essentially based by environmental and social responsibility. We require our project companies to ensure the environmental and social sustainability of their plants and equipment, processes, products and services and monitor the compliance with these requirements, where necessary setting specific contractual covenants. The social or environmental impact of projects co-financed by DEG must not exceed admissible limits.

2. Attention to environmental protection and sustainable use of resources as well as adherence to social principles all make a vital contribution to the future viability of any enterprise.

We therefore convince our clients that it is also in their company's best interest to adhere to these principles. We particularly promote projects with positive effects on environmental and social conditions. With respect to the environment, we particularly focus on the sustainable utilisation of natural resources and climate protection. Furthermore, we feel that fair working conditions and the appropriate consideration of residents' interests are a core element of sustainable development. Long-term income and job creation is one of DEG's primary aims.

3. Compliance with international environmental and social standards as well as environmentally relevant safety, health and technical standards in production and products is a major contribution towards integrating our partner countries into the global economy, which is what we wish to promote.

We exert our influence over our project companies and support them to achieve compliance with the relevant international standards. Besides the national environmental and social regulations of our partner countries as well as international conventions, our benchmarks are the Environmental and Social Standards of the EDFI, which encompass the IFC Performance Standards and the material stipulations of the Environmental, Health and Safety Guidelines of the World Bank Group in its latest version, which serve as their interpretation, and the Conventions of the International Labour Organisation (ILO). In addition, standards of the environmental law of the European Union can potentially serve as reference.

4. DEG supports the implementation and advancement of environmental protection and international social standards in its partner countries.

As part of our work, we ensure that national and, beyond that, international environmental and social standards are enforced. By providing our know-how we also help to raise environmental and social awareness in our partner countries.

5. Project assessment must always take into consideration the ecological and social interests of people affected by the impact of projects co-financed by DEG.

We integrate this aspect into our work and, also in this context, become actively involved in any public debate regarding our projects. We expect our project partners to thoroughly analyse the ecological and social impacts of the co-financed projects, ensure measures to mitigate any adverse effects and provide adequate information and consultation of the affected people throughout the full project term. Our commitment aims at making a long-lasting contribution to a positive development in our partner countries.

6. These principles are also a benchmark for DEG itself and it applies high ecological and social standards to its own organisation and business activities.

Within the scope of our environmental management system, we set ourselves regularly updated challenging aims to ensure an economical utilisation of natural resources and an avoidance of environmental impacts related to our own business activities as far as viably possible. We attach particular importance to climate protection and neutralize all unavoidable CO2 emissions. The concerns of our employees are of high importance to us. We are especially committed to the compatibility of family and work life. We annually give account on the results of our environmentally and socially relevant work and the compliance with the relevant guidelines.