measure the outcome

    Measuring development effects

    How we measure the impact of our work

    DEG has committed to boost the contributions made by its customers to economic, social, and environmental goals in line with the Sustainable Development Goals (SDGs) of the United Nations and to continuously improve the positive impact of its investments.

    To achieve this, we use the Development Effectiveness Rating (DERa), which was updated in 2024. This assessment system is aligned with the United Nations’ sustainability goals and evaluates the development contributions of each customer in five categories. New to this system is the consideration of a net perspective, which encompasses both positive and potentially negative effects of an investment. In addition to the development impacts, the enhanced DERa now also captures contributions to transformation.

    The updated DERa 2.0 consists of two pillars: one reflects the impact contribution of DEG customers, and the other captures the transformation processes of the co-financed enterprises supported by DEG. Both pillars consist of various categories and assessment mechanisms, which are weighted and aggregated.

    DERa Pillar I: Impacts of our customers

    Guided by the SDGs, in the first pillar the development contributions of each customer are assessed across five renowned impact categories. The development effects of investments made by DEG’s customers and their contribution to the SDGs are presented along these five categories. The indicators used are internationally harmonized and known asHarmonized Indicators for Private Sector Operations and IRIS+.

    The impact categories we consider are:

    • Decent jobs
    • Local income
    • Market and sector development
    • Environmental stewardship
    • Community effects

    As part of the 2024 revision, possible positive and negative effects of projects were included in DERa to observe and measure impacts based on a ‘net perspective’. Additionally, topics such as gender equity and climate action, which have gained increasing relevance, are now better reflected.

    DERa Pillar II: Transformation promoted by DEG

    The second pillar captures DEG's work with its customers to mitigate potential risks and enhance impact results. This pillar primarily considers DEG's role in supporting customers through their transformation processes, which may be economic, social, or environmental.

    Impetus for managing and increasing development impact

    The DERa allows DEG to manage the overall development quality of its portfolio and provide its customers with useful impetus for improvements. We use the DERa to determine the current and expected impact of a potential customer as early as in the acquisition phase. The results are included into our investment decision.

    Based on their DERa results, our customers receive recommendations for action and tailored advisory services to help them exploit their development potential. In the annual monitoring, we evaluate the development effects of each customer and show whether or how the customer has achieved its development objectives and where further action is needed.

    Development Effectiveness Rating (DERa)

    We evaluate our work

    Internally and externally executed topic-based evaluations are important tools which we can harness to make DEG's work even more effective.

    Measurable Impact – Development Report

    Despite political uncertainties and market volatility, DEG investments in 2023 were not only financially successful, but also had a significant positive impact.