Development quality reaffirmed
DEG regularly rates the development quality and effectiveness of its projects with its corporate policy project rating tool (GPR). An average rating of 2.2 resulted from the assessment of 2016 new business, maintaining the high development quality of the previous year.
In addition, many of the companies co-financed by DEG also assume greater corporate social responsibility. For example, they pay above-average wages, offer pension and health insurance benefits, and operate healthcare facilities, kindergartens and schools.
In 2016, DEG further developed its development policy rating system, taking into account the 2030 Agenda for Sustainable Development adopted in 2015. Effective 1 January 2017, DEG replaced its GPR system with a new improved rating and management tool, the Development Effectiveness Rating (DERa).
International standards a prerequisite
DEG's commitments must be both environmentally and socially sound. Certain business activities do not qualify for financing from the outset; they are defined in a published exclusion list. New coal-fired power stations have also been excluded from DEG funding since April 2015.
As in previous years, for all projects that DEG committed financing to in 2016, the companies were obliged to comply with international environmental and social standards as well as national requirements.
These include the environmental, social and human rights Performance Standards of the International Finance Corporation (IFC) as revised in 2012 in collaboration with DEG, and the core labour standards of the International Labour Organization (ILO).
By agreeing environmental and social action plans, DEG once again helped in 2016 to further improve the conditions for co-financed companies in projects with potentially higher environmental and social risks. DEG supports the businesses closely for the duration of the project, and ensures that action plans are implemented. Solutions to any issues are worked out together.
DEG continued to support sustainability initiatives in relevant sectors and regions in 2016. For instance, in the context of developing renewable energy sources to supply power in Guatemala, we cooperated with the Guatemalan association of renewable energy generators (AGER) in training programmes for association members to promote comprehension of the concepts of community engagement, corporate social responsibility and dealing responsibly with the rights of indigenous peoples.
At DEG we also conduct our own operations in an environmentally responsible manner. Besides the safety and health of our employees, we focus on efficient management of resources. All carbon emissions resulting from building operations and business trips are neutralised through the purchase and retirement of emission certificates, in line with KfW’s climate neutral status.
The information contained in this online Annual Report 2016 is based on KfW’s Financial Report 2016, which you can download Should this online Annual Report 2016, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2016 takes priority.