Press Release from 2022-06-22 / DEG
Responsible business practices: DEG presents its Development Report 2021
DEG investments have development policy impact during coronavirus pandemic too
In 2021, the COVID-19 pandemic and the economic and social challenges that this entails continued to overshadow the situation in many developing and emerging-market countries. As a development finance provider, DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH was once again in demand among private companies seeking finance and expert advice. In 2021, it continued to support its customers with COVID-19 response services and liquidity support.
Customers generate EUR 147 billion in local income in 2021
The newly submitted Development Report 2021 shows the impact of DEG’s work. The companies that were co-financed by DEG last year employed an estimated 2.8 million people, generating local income of EUR 147 billion. As CEO Roland Siller explains: “In the second year of the pandemic, most of our 700 or so existing customers proved to be resilient. The companies remained commercially successful and it was possible to safeguard and in some cases even improve the developmental impacts.”
During the COVID-19 pandemic, DEG customers are also turning to innovative adaptation strategies to safeguard their success. For instance, an agricultural business in Latin America introduced sustainable production processes that cut down on costs and resources while maximising the company’s potential for reusing and recycling waste. For example, it has a power station that uses rice husks produced as “waste” during processing to generate electricity – and even produces more energy than the site itself needs.
High contributions to global Sustainable Development Goals
DEG sees the development impact of its investments as being a central control instrument. Since 2017, it has used the Development Effectiveness Rating (DERa) to gauge the success of its activities. Every year, the DERa collects quantitative and qualitative indicators for each customer for the purpose of measuring development. An analysis of DEG’s portfolio in 2021 shows that 72% of co-financed companies are investing in innovative technologies, products or processes. Some 86% of DEG customers are also engaged in local charity work and, for example, invest in education and local infrastructure. 78% of companies introduced a complaints management system.
The DERa also allows DEG to record and analyse the contributions being made by its customers to the global Sustainable Development Goals (SDGs). For example, 90% of the companies financed by DEG play their part in attaining SDG 8 (Decent work and economic growth) by generating local income and creating new, fair jobs. By the same token, the energy providers co-financed by DEG produce some 42 terawatt hours (TWh) of electricity from renewable energy (SDG 7) and are currently meeting the needs of over 38 million people with it. A total of 16 million tonnes of CO2 emissions are also being prevented.
Roland Siller: “In times of global challenges such as climate change, private entrepreneurs in particular are helping to develop innovative approaches and drive them forward. This is also where our intensified business strategy comes in: we will be deliberately focusing even more on high-impact and climate-friendly investments with resilient business models to enable sustainable development.”
You can find out more about DEG’s Development Report here: